Force Account Labor & Equipment Costs, Immediate Threat

Appeal Brief

Summary Paragraph

In response to the coronavirus (COVID-19) pandemic, the City of Atlanta (Applicant), a local government entity, requested Public Assistance (PA) reimbursement for force account labor (FAL) hazard pay incurred between April 1, 2020, through June 9, 2021. The Applicant claimed it incurred hazard pay costs for front-line employees who worked to eliminate or reduce an immediate threat and were at risk of exposure to COVID-19. On August 29, 2022, FEMA denied the entire project, finding that the hazard pay policy applied by the Applicant did not come into effect until after the disaster declaration, the policy was unclear regarding what positions were eligible for hazard pay, and the Applicant failed to sufficiently document the eligibility of the work. The Applicant appealed, arguing that the hazard pay policy predated the disaster, but needed post-disaster declaration changes due to its inconsistency with broader changes to the Applicant’s civil service laws. In a letter dated October 24, 2023, the FEMA Region 4 Regional Administrator denied the Applicant’s first appeal. FEMA found the Applicant did not demonstrate the FAL hazard pay costs were associated with eligible work performed by essential employees called back to work during administrative leave to perform eligible emergency work. The Applicant filed a second appeal, requesting $18,895,579.98, reiterating first appeal arguments and asserting that its hazard pay costs were aligned with FEMA policy requirements. 
 

Authorities

• Stafford Act § 403(a)(3).
• 44 C.F.R §§ 206.206(a), 206.225(a).
• PAPPG, at 19, 21, 23-25, 57-58, 65, 73, 133.
• O&O Policy, at 5; Work Eligible for Public Assistance Policy, at 3-5; FEMA Fact Sheet, Eligible Emergency Protective Measures at 1-2.
   

Headnotes

• To be eligible, costs must be directly tied to the performance of eligible work. 
  • The Applicant has not demonstrated the requested costs directly tie to the performance of eligible work.
• FEMA may reimburse extraordinary costs (such as hazardous duty pay) for essential employees who are called back to duty during administrative leave to perform eligible emergency work if the costs are paid in accordance with a labor policy that meets certain criteria.
  • The claimed costs are not associated with eligible extraordinary costs for eligible emergency work. Additionally, the applicable hazard pay policy does not meet FEMA policy requirements.

Conclusion

FEMA finds that the Applicant has not demonstrated the claimed FAL hazard pay costs were directly tied to the performance of eligible work, provided under a labor policy that meets FEMA policy requirements, or associated with eligible overtime labor costs or eligible extraordinary costs for essential employees called back during administrative leave to perform eligible emergency work. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Georgia on March 29, 2020, with an incident period from January 20, 2020, to May 11, 2023. The City of Atlanta (Applicant), a local government entity, requested $22,912,547.67 in Public Assistance (PA) reimbursement for force account labor (FAL) hazard pay incurred from April 1, 2020 through June 9, 2021. The Applicant stated it incurred hazard pay costs for front-line employees who worked to eliminate or reduce an immediate threat and were at risk of exposure to COVID-19. The Applicant provided its employees $500.00 monthly payments as hazard pay for work during the period claimed. This hazard pay process was implemented by the Applicant via administrative order issued by the Mayor on March 30, 2020. The Applicant submitted a spreadsheet listing employee names, dates of work performed, claimed costs, and the respective departments of the employees. In addition, the Applicant provided its hazard pay policy, multiple executive orders and ordinances implemented to extend the terms of hazard pay, and an explanation of the policy and how it was implemented during the COVID-19 pandemic. 

On August 29, 2022, FEMA denied the requested funding, finding that the applicable hazard pay policy did not come into effect until after the disaster declaration, the policy was unclear regarding what positions were eligible for hazard pay, and the Applicant failed to sufficiently document the eligibility of the work associated with the claimed costs.

First Appeal 

In a letter dated October 27, 2022, the Applicant filed a first appeal, reiterating its request for $22,912,547.67 in FAL hazard pay. First, the Applicant stated it incurred hazard pay for employees providing emergency work in response to COVID-19. The Applicant provided a list of 25 eligible emergency protective measures that it stated were relevant to the appeal, such as safety inspections, security and law enforcement, emergency medical transport, disinfection of eligible public facilities, and the purchase and distribution of personal protective equipment (PPE).[1] Second, the Applicant stated the applicable hazard pay policy was consistent with a policy in place before the disaster which complied with FEMA’s requirements. The Applicant

explained that the hazard pay policy was enacted in 2005, predating the disaster. However, due to payroll system changes in 2007, the policy became infeasible to implement as originally written. Specifically, the 2007 payroll changes removed step increases, upon which the 2005 hazard policy-based payment amounts relied. Therefore, the Applicant’s Mayor signed an administrative order in response to the COVID-19 pandemic, to facilitate the provision of temporary salary increases. In response to the administrative order, certain Applicant-officials recommended that in lieu of a step increase, the Applicant provide a $500.00 per month rate of hazard pay for front-line Applicant-employees whose work could expose them to the coronavirus. The Applicant’s Mayor agreed with the fixed amount per employee, in order to achieve a uniform application of the policy and avoid discretion in the amount employees received. The Applicant’s Mayor signed an administrative order reflecting the $500.00 per month hazard pay. The Applicant acknowledged that the applicable hazard pay at issue was “made with a COVID-19 specific modification, but that occurred because of pre-COVID changes to the [Applicant’s] pay procedures that made it impossible to implement the policy as written.”[2] Additionally, the Applicant argued that hazard pay was an unbudgeted cost, similar to overtime. 

In a letter dated November 21, 2022, the Georgia Emergency Management and Homeland Security Agency (Recipient) transmitted the first appeal to FEMA.  In a letter dated October 24, 2023, the FEMA Region 4 Regional Administrator denied the Applicant’s first appeal. FEMA found that the FAL hazard pay costs were not associated with eligible extraordinary costs for essential employees called back to work during administrative leave to perform eligible emergency work. Specifically, FEMA found that the Applicant did not provide documentation, such as activity logs or reports, to substantiate that the FAL hazard pay was for employees performing eligible emergency work under COVID-19. Rather, FEMA found that documentation showed employees were performing regular duties and, per the Applicant’s first appeal letter, received hazard pay because of their “willingness to subject themselves to the virus for the good of the City.”[3] Additionally, FEMA noted that its policy stipulates hazard pay may be eligible if employees are called back from administrative leave for eligible emergency work. FEMA stated absent this, and other limited exceptions, only overtime costs are eligible for budgeted employees performing eligible emergency work.

Second Appeal

In a letter dated December 22, 2023, the Applicant filed a second appeal requesting $18,895,579.98.[4] First, the Applicant argues that work performed by essential personnel who earned hazard pay was tracked and documented, and specifically related to eligible emergency actions to save lives or protect public health and safety or improved property.[5] In support of its claim, the Applicant provides summary spreadsheets of activities conducted by all departments, which include employee names, dates worked, and, in some cases, descriptions of the work performed. Second the Applicant reiterates its previously raised arguments that the applicable hazard pay policy was a predisaster labor policy that meets all of the FEMA policy requirements. Third, the Applicant asserts that even if the Applicant did not place its essential employees on administrative leave, its hazard pay is eligible under section 403 of the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act because it states that FEMA may reimburse an applicant for “hazardous duty compensation for permanent employees of the [applicant] conducting emergency protective measures.”[6] Additionally, the Applicant argues that FEMA policy does not explicitly require an applicant to first place essential employees on administrative leave for hazard pay costs to be eligible. The Applicant asserts, instead, that FEMA policy merely confirms that extraordinary costs for essential employees called back to duty during administrative leave to perform eligible emergency protective measures are eligible. Lastly, the Applicant states that if FEMA determines the costs are ineligible under policy, it requests a policy waiver. The Recipient, in a letter dated February 16, 2024, forwarded the Applicant’s appeal to FEMA.

Discussion

FEMA is authorized to provide assistance for emergency protective measures to save lives and protect public health and safety.[7] For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[8] In response to COVID-19, eligible emergency work may include safety inspections, security and law enforcement, emergency medical transport, cleaning and disinfecting eligible facilities, and the purchase and distribution of PPE.[9]  

FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on the Applicant’s predisaster written labor policy, provided the policy: (1) does not include a contingency clause that payment is subject to Federal funding; (2) is applied uniformly regardless of a Presidential declaration; and (3) has set non-discretionary criteria for when the Applicant activates various pay types.[10] If these requirements are not met, FEMA limits PA funding to the Applicant’s non-discretionary, uniformly applied pay rates.[11] For emergency work, generally only overtime labor is eligible for budgeted employees; except in limited circumstances, the straight time of an applicant’s budgeted employees performing emergency work is ineligible.[12] Extraordinary costs (such as hazardous duty pay) for essential employees who are called back to duty during administrative leave to perform eligible emergency work are eligible if the costs are paid in accordance with a labor policy that meets the above criteria.[13] To be eligible, costs must be directly tied to the performance of eligible work.[14] It is the applicant’s responsibility to provide documentation to substantiate its claim as eligible and to clearly explain how those records support its appeal.[15]

First, the Applicant requests reimbursement for hazard pay for $500.00 monthly payments made to its employees for working during the pandemic. In support, the Applicant provided various summary spreadsheets from multiple departments. However, these summaries contain many tasks that are general in nature, lack specificity, or are not filled out which prevents FEMA from determining if any work is eligible. For example, the Department of City Planning spreadsheet only lists “Safety Inspections,” the Atlanta Police Department spreadsheet contains no descriptions for COVID-19-specific security and law enforcement tasks, and the Parks and Recreation spreadsheet lists disinfecting eligible facilities but does not specify what facilities are disinfected to determine eligibility.[16] Additionally, the fire department lists several entries for firefighting with no additional context and other entries include general descriptions of delivering or managing supplies and commodities and emergency medical transport. Although some tasks are labeled with COVID-19, the Applicant does not provide specific task descriptions to demonstrate the activities were in response to COVID-19. Therefore, based on the above, the Applicant has not demonstrated the requested costs directly tie to the performance of eligible work. 

Second, the Applicant asserts that the applicable hazard pay policy was in effect since 2005. However, the modifications made to its payroll policy in 2007 “obliterated the method by which the [Applicant] would calculate the amount of the hazard pay.”[17] Therefore, on March 16, 2020, the Applicant’s Mayor signed an administrative order that ordered certain city offices to “examine, establish, and promulgate a process by which the [Applicant] may provide for the creation of certain employee classification(s) which provide for temporary salary increases for certain employees experiencing increased burdens in their work responsibilities during times of emergency.”[18] This administrative order did not rely on or mention the 2005 hazard pay policy as a framework or authorization for the hazard pay presently claimed. Subsequent administrative orders and city ordinances the Applicant provides in support of its appeal likewise do not rely on or mention the 2005 hazard pay policy. On March 30, 2020, the Applicant’s Mayor signed an administrative order (No. 2020-8), that established the hazard pay policy of $500.00 per month. Consequently, the Applicant instituted the hazard pay policy after the start of the incident period, as well as the disaster’s declaration. The policy, therefore, is not predisaster.[19] Additionally, the administrative orders and city ordinances ratifying those orders which established the hazard pay policy contemplate hazard pay only in the context of, and in response to, this specific declared incident. Therefore, the applicable hazard pay policy does not meet the requirements outlined in FEMA policy. Moreover, the predisaster 2005 pay policy does not set non-discretionary, uniformly applied pay rates. Instead, the 2005 policy establishes a scheme by which city departments may request hazard pay authorization, and the Applicant’s Department of Human Resources will review the request and determine whether, how, and how much additional pay it will authorize.[20] 

Third, FEMA policy stipulates that extraordinary costs, including hazard pay, may be eligible if employees are called back to work during administrative leave to perform eligible emergency work. Here, the Applicant has not provided documentation demonstrating hazard pay was provided to employees who were called back from administrative leave to perform eligible work. Rather, the Applicant concedes that it did not place its essential employees on administrative leave.[21] Therefore, the claimed FAL hazard pay costs are not eligible as extraordinary costs.[22] Outside of hazard pay, FAL costs for overtime for emergency work may also be eligible. However, the Applicant has acknowledged that the costs claimed are not overtime.[23] 

Lastly, the Applicant has requested a waiver of FEMA policy to provide PA funding for the hazard pay costs claimed. However, the Applicant has not cited to any specific applicable authority to support its request that FEMA waive its policy requirements concerning the hazard pay in dispute.

Based on the above, the Applicant’s claimed FAL hazard pay costs are not eligible for PA funding.

Conclusion

The Applicant has not demonstrated the claimed FAL hazard pay costs were directly tied to the performance of eligible work, provided under a labor policy that meets FEMA policy requirements, or associated with eligible overtime labor costs or eligible extraordinary costs for essential employees called back during administrative leave to perform eligible emergency work. Therefore, this appeal is denied.