Hazard Pay and You

I figured this was as good day as any to talk about the US rate structure and why the prices tend to be higher than most other markets.

Due to the tenuous political and legal situation (no matter who is in office), providers charge hazard pay. In markets where sex work is decriminalised the rates tends to be 30-50% lower because while there are still risks, many of them are negated + you have legal recourse when something like being robbed or raped happens. This lowers the amount of hazard pay and leads to lower rates across the board. As a personal example, if I were to work in Canada I would charge half of what I would in the US. That's still on the upper end of the market and would yield low volume. As I have other revenue streams, this would be fine. But if I needed a full-time income from providing, I'd have to lower my rate a bit more to achieve that.

I do not believe the lower pay in other markets is a sign of undervaluation. Rather a reflection of decreased risk, increased safety, and legitimate recourse to problems. Decriminalisation eliminates the need for a criminal risk premium, allowing prices to settle closer to the actual market demand without the added layer of hazard pay.

The beautiful thing here is that your hazard pay isn't market determined, and it's not some fixed number we've all psychically agreed on. It's a personal number determined by you based on how you assess your own legal and political situation alongside the hazards involved in your work. It's what makes it worth it for you to shoulder the burden of risks this job can bring.

If you feel the situation recently got more precarious, a raise in your hazard pay is a good response. As @AriaAuclair on twitter pointed out after the November 2024 election:

With people who partake in our services having such renewed optimism in the economy, I also don’t see why they wouldn’t be willing to pay, seeing as they anticipate their financial situation improving.

I agree with this mindset wholeheartedly. People were ramping up and getting ready to spend freely because they saw a good economy on the horizon — combine that with the possibility of more risk and uncertainty in this industry regarding policy and protection. It was an opportune time to raise your hazard pay accordingly. Obviously that optimism was misplaced and those people were fools, but that's an entirely different blog entry.

When an activity is criminalised, sellers face hazards — arrest, incarceration, violence — all of which increase the cost of doing business in some way. This criminal risk premium (or hazard pay) is passed on to consumers and reflected in the inflated bottom line price. If you buy some pot in Colorado at a legal store it's going to be 1/3 the price of the Tennessee black market. Part of that increased cost is the risk associated with transporting and selling an illegal product. In criminalised sectors, the added cost reflects the dangers associated with operating outside the law. This premium compensates for several specific risks:

Legal Risk: Arrest, prosecution, and incarceration are the most obvious risks. Those lead to long term consequences such as loss of income, unaffordable legal fees, future employment discrimination, and a potential criminal record. Sex work in the best of times is already a scarlet letter. The risk of these penalties drives up prices to make it worth the hazard involved. It could easily be argued that sex workers operating in criminalised markets charge more per client possibly to account for lost income during periods increased enforcement (see: Texas, Oklahoma, and North Carolina for an example of what I mean by 'increased enforcement').

Security Concerns: Criminalised operations in general lack formal protections (such as the ability to call law enforcement when assaulted or robbed) and people must rely on themselves. This isn't unique to us and is part of why there's a price discrepancy in legal cannabis in Colorado and black market cannabis in Tennessee. Even with the 30% taxes on the legal cannabis it is still only 1/3 the cost of the Tennessee product. The risk of violence in criminalised markets is higher, and violence is a hazard. The lack of legal safety nets creates a premium on privacy and discretion. To mitigate risk, some workers may screen clients more thoroughly or require a fee from those who do not wish to screen traditionally. I have seen a $500 privacy surcharge in lieu of screening. I don't know how you can argue that as anything other than hazard pay, personally.

Market Instability: Because criminalised markets operate entirely outside of regulations, they are inherently volatile. Changes in law enforcement priorities, shifts in local cultural climate, election outcomes, and new law proposals can lead to abrupt increases in risks, which workers need to account for in their pricing. SEE: FOSTA. The risk premium in voluntary sex work often fluctuates with local law enforcement patterns. During high-profile events or in areas with known crackdowns, prices tend to spike. Conversely in places with de facto decriminalisation, Nordic model, or years of low enforcement, the risk premium may be lower as workers feel safer operating more openly since they are not the ones criminalised. This may also be why clients demand a cheaper rate in those markets as they feel THEY are shouldering the legal risk portion of the hazard. I think because criminalised work inherently lacks stability, workers price services to offset both immediate and future losses. This is also akin to hazard pay in that it recognizes the possibility of abrupt income loss due to enforcement actions or abrupt legal changes, which are specific to criminalised occupations.

Shorter Career Duration: High risk (along with other factors like stigma and stress) can limit the length of time people can work in criminalized sectors. The average career in sex work is shorter than in most other industries, so workers charge a premium to compensate for a limited earning period and for the cumulative risks tied to criminalization — arrest, injury, burnout, death, et al. The “hazard pay” reflects the legal and physical dangers that could abruptly end a career. Since there’s no short-term disability, PTO, sick leave, or similar protections, this premium often serves as a “rainy day fund.” Workers charge higher rates to self-cover income gaps from illness, breaks, or enforcement disruptions, compensating for the financial risks they bear alone in place of standard job benefits.

The premium being charged isn’t just about making money quickly but is specifically tied to the risk of sudden career ending events — arrests, legal trouble, violence, death — directly related to criminalisation. This risk justifies higher rates as compensation for the legal and physical hazards that can shorten a worker’s viable career span. Even if workers are maximizing short-term earnings, this isn’t just “typical pricing strategy”. Rather, I feel it’s a recognition of the “occupational hazard” of criminalization — where increased rates account for the elevated danger and instability that criminalised work inherently carries.

Now we have all sorts of puritanical nonsense looming between the online creator laws for places like NC and Alabama, and the worldwide rush to 'age verification' instead of expecting parents to parent. I wouldn't blame anyone for wanting to bump up their rate here.

If you are wondering "how much" one should raise their pay in these situations, that's a good question. As I said before, it's a personal number. But let's talk about what hazard pay is typically awarded for and how hazard pay is determined in a traditional job to help you decide what number is right for you.

First, what do people normally get hazard pay for?

• Hazardous duties — physically demanding work, working around contagious illness, jobs that pose a hazard to your personal safety
• Tasks in dangerous locations
• Jobs with extreme emotional distress
• Jobs with extreme physical discomfort

We ring all the bells here. Other obvious jobs you can think of are things like mining, the military, steelworkers, logging. But during pandemics, jobs like grocery clerk and pharmacist also qualified. It's not a fixed definition or list because hazards themselves are always changing. Let's look at how civilian industries handle this:

How Much Hazard Pay Should You Expect?

The specific amount will vary based on the job and tasks involved. Many companies determine hazard pay by the years each employee has been doing the work.

The more years completed, the more hazardous situations the worker has exposed themselves to. For example:

• One to five years of service qualifies for $50 hazard pay
• Five to 10 years of service qualifies for $100 hazard pay
• Eleven to 20 years of service qualifies for $200 hazard pay

https://www.findlaw.com/employment/wages-and-benefits/hazard-pay--what-is-it-and-who-can-get-it-.html

Employees in positions eligible for HDP-P will receive the pay differential after completing six months of service with the company. Upon approval, the employee will receive five months of HDP-P in the first pay period following the initial six-month period. Thereafter, HDP-P will be paid one month in arrears in the last paycheck of the month. For example, the employee will receive HDP-P for January in the last paycheck in February.

HDP-P will be paid for all hours worked and for paid time off while in the position. HDP-P will not be paid when the employee is on an unpaid leave of absence.

HDP-P is paid based on years of service. See Table A for the current HDP-P allowance.

https://www.shrm.org/topics-tools/tools/policies/hazardous-duty-pay-policy-position-location

A template for companies to use along with a sample table of hazard pay based on years of service.

Hazard pay rates

There are many ways to calculate hazard pay rates. Sometimes, it is paid as a determined per diem amount, other times as a percentage of the worker’s pay. In certain cases, hazard pay even goes up according to a worker’s seniority and years of service. Each case is different, and there are no cookie-cutter solutions.

https://africa-hr.com/blog/how-to-manage-hazard-pay/

Many employers determine hazard pay using the number of years each employee has been performing the dangerous role or task, acknowledging that the risk of injury or illness increases with time.

During the COVID-19 pandemic, employers who offer hazard pay typically do so in per-hour increases or wage-percentage premiums. In Los Angeles, “Premium Hazard Pay” is an extra $5 per hour in addition to all other forms of compensation. Employers with salaried employees might raise wages by 10%.

Turns out here's actually not a set market value for this. Setting hazard pay for any non-military industry is a lot more personalised than you'd (or I honestly) would have probably though.

So, how can you determine the amount by which to increase your hazard pay? In a traditional job:

The specific amount will vary based on the job and tasks involved. Many companies determine hazard pay by the years each employee has been doing the work.

The more years completed, the more hazardous situations the worker has exposed themselves to.

This is a reason you may notice that companions age, but don't drop their rates. If anything, they raise them and/or their visit length minimums. Experience has a dollar value in and of itself — which is part of it — but another (I believe larger) part is also the increased duration of taking on risks. If you are looking to hit it and get out, you may not want to deal with the lower volume that a higher rate brings, as an example.

Law of averages says that you will eventually be raped, robbed, assaulted, or possibly killed in this job. Sure, every job doesn't have a cumulative risk. But each job holds the same probability of one of those things happening. I suppose we could call it a “survival bonus”? Criminal risk premium? The semantics of it to me don't really matter, I used the term hazard pay because it's what other industries use. If sex work is work, let's treat it like just another industry the best we can when we talk about it right?

If you are in it for the long haul doing everything possible to prevent burnout, you're going to set a different amount. The 10 year companion won't have the same hazard pay as the 3 year companion. What financial and career goals you have will come into play along with the other factors previously mentioned.

You've probably noticed by now I still haven't given you a 'number' and I'm not really going to. That wasn't at all the point of this. If that's what you were waiting for, you've missed the point of everything I've written. I am not your boss, advisor, mentor, or mom. I am not here to sell you a course, blow smoke up your ass, or do everything for youl. I am just here as your peer to start a discussion and give input. This is an entirely self-determined number. And we can all think about what that means for us personally — but I am not going to pretend to be some hot shit authority that tells you what your hazard pay should be. I don't know your situation, I don't know your goals, I don't know your needs, I don't know your plans. I am just laying out some guidelines so that you — the person with that information — can make a good self-determined number with community input.

Other relevant financial things we can discuss in future entries if desired:

• Taxes: How to get right if you're not already
• Future financial planning, financial planners, investment help, qualifying for and acquiring a USDA mortgage
• Whatever you want: Email me with topics, ideas, et al.