Coronavirus State and Local Fiscal Recovery Funds
American Rescue Plan Act (ARPA) Local Fiscal Recovery Funds may be used to
provide premium pay to eligible workers performing essential work during the
COVID-19 public health emergency or to provide grants to third-party employers
with eligible workers performing essential work
These are workers 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.
Workers who are covered by premium pay include:
- 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.
In its Final Rule, which goes into effect on April 1, 2022, The U.S. Treasury Department has streamlined options to provide premium pay for essential workers, who bear the greatest health risks because of their service in critical sectors.
The Interim Final Rule defines essential work as work involving regular in-person interactions or regular physical handling of items that were also handled by others. A worker would not be engaged in essential work and, accordingly may not receive premium pay, for telework performed from a residence.
The definition of eligible worker is “those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each Governor of a State or territory, or each Tribal government, may designate as critical to protect the health and well-being of the residents of their State, territory, or Tribal government.”
Premium pay must be entirely additive to a worker’s regular rate of wages and other remuneration and may not be used to reduce or substitute for a worker’s normal earnings. The definition of premium pay also clarifies that premium pay may be provided retrospectively for work performed at any time since the start of the COVID-19 public health emergency, where those workers have yet to be compensated adequately for work previously performed.