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Premium & Hazard Pay

What are the guidelines regarding eligibility for premium pay?

The Interim Final Rule released by the U.S. Department of the Treasury (“Treasury”) states that municipalities may use Coronavirus Local Fiscal Recovery Funds (“CLFRF”) to provide premium pay for eligible workers performing eligible work.[1] These workers are defined as those who “have been and continue to be relied on to maintain continuity of operations of essential critical infrastructure sectors, including those who are critical to protecting the health and wellbeing of their communities.”[2] The Interim Final Rule goes on to give specific examples of such workers, such as:

  • staff at nursing homes, hospitals, and home care settings;
  • workers at farms, food production facilities, grocery stores, and restaurants;
  • janitors and sanitation workers;
  • truck drivers, transit staff, and warehouse workers;
  • public health and safety staff;
  • childcare workers, educators, and other school staff; and
  • social service and human services staff.[3]

A municipality has discretion to provide premium pay to sectors not mentioned in the Interim Final Rule as long as they are “deemed critical to protect the health and well-being of residents.”[4]

Premium pay under CLFRF is intended to compensate workers for the heightened risks they assume during the COVID-19 public health emergency.[5] As such, it is hard to imagine a circumstance where premium pay is an allowable use of CLFRF for any worker teleworking from a residence.[6]

The fact that a worker had the option to work remotely, but did not, is not cited in the Interim Final Rule or any other CLFRF guidance released by Treasury as a reason that would disqualify that worker for premium pay if that worker was in a critical role to protect the health and wellbeing of their community and assumed heightened risks in performing essential work. Essential work is defined by the Interim Final Rule as “work involving regular in-person interactions or regular physical handling of items that were also handled by others.”[7] That is the burden that must be met for premium pay. For example, an educator might have been given the option to work remotely from home. If the educator instead worked in-person interacting with others, premium pay for that educator would be arguably a justified use of CLFRF.

Last Updated: June 7, 2021

 

[1] U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule, 31 CFR

Part 35 RIN 1505-AC77, at 45,  https://home.treasury.gov/system/files/136/FRF-Interim-Final-Rule.pdf.

[2] Id.

[3] Id. at 46.

[4] Id. at 48.

[5] Id. at 50.

[6] Id. at 47.

[7] Id.