Immediate Threat, Force Account Labor & Equipment Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4480
Applicant	Child and Family Services of Erie County
Appeal Type	Second
PA ID#	029-UR64M-00
PW ID#	GMP 153522
Date Signed	2023-04-05T16:00:00

Summary Paragraph

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the State of New York on March 20, 2020, with an incident period of January 20, 2020 to May 11, 2023. Child and Family Services of Erie County (Applicant) requested reimbursement under the Federal Emergency Management Agency’s (FEMA) Public Assistance (PA) program for hazard pay for essential workers, and costs associated with personal protective equipment, thermometers, and disinfecting supplies, for a total of $460,071.68. FEMA issued a Determination Memorandum denying $439,726.66 associated with the hazard pay, concluding that such costs could not be tied to the performance of eligible emergency protective measures under the PA program nor were they consistent with the Applicant’s predisaster labor policy. The Applicant appealed, stating it authorized hazard pay to its employees because of the added risk due to exposure to COVID-19 and additional cleaning responsibility. In addition, the Applicant asserted that hazard pay was consistent with its predisaster pay policy. The New York State Division of Homeland Security and Emergency Services (Recipient) supported the Applicant’s appeal. The FEMA Region 2 Regional Administrator denied the appeal, finding that the Applicant did not demonstrate that costs were tied directly to eligible work, that its pay policy sets non-discretionary criteria for hazard pay, or that the pay policy was in effect at the time of disaster. The Applicant submitted its second appeal, reiterating prior arguments and provides additional documentation that it asserts supports its pay policy sets non-discretionary criteria for hazard pay and that it was in effect prior to the COVID-19 event. The Recipient supports the Applicant’s second appeal.

Authorities and Second Appeals

• Stafford Act § 403(a)(3)
• 44 C.F.R. §§ 206.225(a)(3)(i), 206.228(a)(2)(iii)
• PAPPG, at 21, 23-25, 133

Headnotes

• FEMA generally determines the eligibility of various types of pay, including hazard pay, 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. To be eligible, costs must be directly tied to the performance of eligible work and be adequately documented.
  • The Applicant did not demonstrate that its predisaster written labor policy sets non-discretionary criteria for when the Applicant activates hazard pay. In addition, the Applicant did not demonstrate that the hazard pay costs were directly tied to the performance of eligible work.

Conclusion

FEMA finds that the Applicant did not demonstrate that the claimed hazard pay costs are eligible for reimbursement under FEMA’s PA program. 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 New York on March 20, 2020, with an incident period of January 20, 2020 to May 11, 2023. Child and Family Services of Erie County (Applicant)[1] requested reimbursement under the Federal Emergency Management Agency’s (FEMA) Public Assistance (PA) program for hazard pay for essential workers, and costs associated with personal protective equipment, thermometers, and disinfecting supplies, for a total of $460,071.68.^[2] The Applicant explained in the project application that it took additional measures to keep its facilities open to continue services during the pandemic, and therefore, deemed it necessary to provide hazard premium pay to essential workers.[3] The Applicant provided documentation including payroll spreadsheets and a section of its 2020 Employee Handbook.

On March 9, 2022, FEMA issued a Determination Memorandum denying $439,726.66 for the hazard pay.[4] FEMA found that the work performed by the Applicant’s staff could not be tied to the performance of eligible emergency protective measures, nor was it listed as eligible work in FEMA’s Coronavirus (COVID-19) Pandemic: Safe Opening and Operation Work Eligible for Public Assistance policy.[5] Also, FEMA found that the hazard pay was not consistent with the Applicant’s predisaster labor policy. FEMA stated that the labor policy provided by the Applicant, contained in the 2020 Employee Handbook, neither specified an issuance date, nor authorized hazard pay compensation.

First Appeal   

On May 6, 2022, the Applicant appealed FEMA’s denial for reimbursement of hazard pay. The Applicant asserted that the hazard pay costs were associated with eligible emergency protective measures to protect public health from the ongoing declared emergency and were allowable based on its predisaster pay policy. The Applicant stated that it authorized hazard pay because of the added risk due to exposure to COVID-19 and additional responsibility of cleaning and disinfecting. In support, the Applicant provided documentation including a premium/hazard pay certified statement (Memo) signed on May 6, 2022, attesting that the hazard pay policy has been in effect since January 2017. This Memo stated that the rate of additional pay and applicable time period for premium/hazard pay is at the discretion of the Applicant.[6]

On June 29, 2022, the New York State Division of Homeland Security and Emergency Services (Recipient) recommended approval of the Applicant’s appeal. The Recipient stated that the Applicant demonstrated the hazard pay was implemented due to staff performing additional work as a direct result of the COVID-19 pandemic. The Recipient listed work that it asserted was performed by employees who received hazard pay but did not provide additional documentation aside from Centers for Disease Control and Prevention guidance.

On September 26, 2022, the FEMA Region 2 Regional Administrator denied the appeal, finding that the Applicant did not demonstrate that the hazard pay costs were tied directly to eligible work, that the Applicant’s pay policy sets non-discretionary criteria for hazard pay, or that it was in effect at the time of disaster. FEMA stated that although employees conducted some work that may be eligible, such as cleaning and disinfecting, the documentation submitted did not distinguish between time spent performing eligible work and the time spent performing regular duties. Further, FEMA asserted that even though the Applicant’s Memo described the practice of implementing premium/hazard pay, the language of the document indicated that the hazard pay was discretionary. Finally, FEMA noted that while the Applicant asserted hazard pay had been in effect since 2017, the Memo was signed on May 6, 2022.

Second Appeal

In a letter dated November 22, 2022, the Applicant submitted its second appeal, reiterating its prior argument that the costs were tied to eligible work because the hazard pay was paid to staff performing additional tasks mandated by its state public health authority. In addition, the Applicant provides correspondence between senior staff that it states supports its assertion the pay policy set non-discretionary criteria for hazard pay and was in effect prior to the COVID-19 event. The Applicant also identifies previous examples in which it applied its hazard pay rates consistently according to its pay policy. Finally, the Applicant states that the costs are eligible measures supported by a pre-existing premium/hazard pay policy with appropriate and consistent parameters. In a letter dated January 24, 2023, the Recipient supports the Applicant’s second appeal, reiterating its previous arguments and highlighting the Applicant’s pay policy documentation on appeal.

 

Discussion

FEMA may provide assistance for emergency protective measures that eliminate or lessen immediate threats to lives, public health, or safety.[7] Except in limited circumstances, the straight-time of an applicant’s budgeted employees performing emergency work is ineligible.[8] An applicant’s permanent employees or seasonal employees working during the normal season of employment are considered to be budgeted employees.[9] FEMA generally determines the eligibility of various types of pay, including hazard pay, 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] To be eligible, costs must be directly tied to the performance of eligible work and be adequately documented.[11] It is the applicant’s responsibility to substantiate its claim as eligible.[12]

Here, the Applicant is requesting reimbursement for hazard pay costs paid to its employees during the declared incident. However, the Applicant did not demonstrate that its predisaster written labor policy sets non-discretionary criteria for when the Applicant activates hazard pay. Although the Applicant’s Memo describes the practice of implementing premium/hazard pay, the Memo states that the rate of additional pay and applicable time period for premium/hazard pay is at the discretion of the agency.[13] In addition, the Applicant did not demonstrate that the hazard pay costs were directly tied to the performance of eligible work. While the Applicant has provided documentation, such as timesheets which show the hours claimed during the incident period, the documentation does not specify what the employees were doing during those hours. The Applicant did not provide documentation such as daily logs or activity reports that would permit FEMA to verify the claimed hours were directly tied to the performance of eligible emergency work. Therefore, the requested hazard pay is not eligible for PA funding.

 

Conclusion

FEMA finds that the Applicant did not demonstrate that the claimed hazard pay costs are eligible for reimbursement under FEMA’s PA program. Therefore, this appeal is denied.

 

 

[1] Child and Family Servs. of Erie Cnty. (Applicant) is a Private Nonprofit organization that operates a custodial care facility.

[2] The amount of $460,071.68 is the net cost for the project, after a deduction of $275,770.03 due to funds received by the Applicant from other sources. See Grants Manager, Project 153522, Child and Family Servs. of Erie Cnty., Version 0 (July 1, 2022), Attachment Force Account Labor Summary COVID Premium Paid Less Contributions Net Request.xlsx. 

[3] See Grants Manager, Project 153522, Child and Family Servs. of Erie Cnty., Version 0, Streamlined Project Application, at 1 (completed Nov. 3, 2020).

[4] FEMA approved $20,345.02 for personal protective equipment, thermometers, and disinfecting supplies.

[5] FEMA Policy 104-21-0003, Coronavirus (COVID-19) Pandemic: Safe Opening and Operation Work Eligible for Public Assistance (Interim) (Version 2) (Sept. 8, 2021).

[6] See Child & Family Servs., Child and Family Services Premium/ Hazard, at 1 (May 6, 2022) [hereinafter Memo].

[7] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 403(a)(3), Title 42, United States Code § 5170b(a)(3) (2018); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.225(a)(3)(i) (2019).

[8] See 44 C.F.R. § 206.228(a)(2)(iii) (stating that straight-time costs for permanently employed personnel that are associated with certain emergency protective measures are not eligible, except for those costs associated with host state evacuation and sheltering); Public Assistance Program and Policy Guide, FP 104-009-2, at 24 (Apr. 1, 2018) [hereinafter PAPPG] (stating that “[f]or emergency work, only overtime labor is eligible for budgeted employees”).

[9] PAPPG, at 24.

[10] Id. at 23, 25.

[11] Id. at 21.

[12] Id. at 133.

[13] See Memo, at 1 (indicating that “rate of additional pay and applicable time period for premium/hazard pay is at the discretion of the agency, but typically determined as premium pay at a rate of 1.5 or 2.0 times normal pay, depending on the severity of the event”).