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COVID-19 Federal Assistance e311

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Premium & Hazard Pay

Can premium pay be offered as a one-time payment?

Current U.S. Department of the Treasury (“Treasury”) guidance does not restrict the number of premium pay payments. Treasury’s Final Rule on the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”), published on January 6, 2022, asserts that premium pay “should be in addition to compensation typically received.”[1] The Final Rule provides a definition of premium pay as follows:

Premium pay means an amount of up to $13 per hour that is paid to an eligible worker, in addition to wages or remuneration the eligible worker otherwise receives, for all work performed by the eligible worker during the COVID-19 public health emergency. Such amount may not exceed $25,000 in total over the period of performance with respect to any single eligible worker. Premium pay may be awarded to non-hourly and part-time eligible workers performing essential work. Premium pay will be considered to be in addition to wages or remuneration the eligible worker otherwise receives if, as measured on an hourly rate, the premium pay is:

  1. With regard to work that the eligible worker previously performed, pay and remuneration equal to the sum of all wages and remuneration previously received plus up to $13 per hour with no reduction, substitution, offset, or other diminishment of the eligible worker’s previous, current, or prospective wages or remuneration; or
  2. With regard to work that the eligible worker continues to perform, pay of up to $13 per hour that is in addition to the eligible worker’s regular rate of wages or remuneration, with no reduction, substitution, offset, or other diminishment of the worker’s current and prospective wages or remuneration.[2]

Treasury’s current guidelines have neither explicitly addressed whether premium pay can be distributed in the form of a one-time payment nor placed any express restrictions on such a payment. Recipients should consult Treasury’s forthcoming Frequently Asked Questions (“FAQs”) related to the Final Rule[3] to determine whether the Treasury provides any additional stipulations regarding the timing and frequency of premium pay to eligible workers.

Last Revised: March 11, 2022

[1] Treas. Reg. 31 CFR 35 at 231, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf.

[2] Id., at 410-411.

[3] Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions (as of January 2022) – at 1, available at: https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf.