While the correct answer is “it depends”, my more honest reaction to this question is, “Do you think that is the intention of this funding?”

Because, first and foremost, the funding is for the purpose of assisting your consumers — people with a significant disability who approach you for aid and are enrolled in services — with a direct response to the COVID-19 pandemic. Read the FAQ on this topic carefully. The funds “must be focused on responding to needs that are the result of the COVID-19 pandemic.” These new dollars are not intended as a way for you to pay for your wish list. I have no doubt that we all wish we could pay staff more, but we know that this is one-time money, intended to assist people in crisis, and won’t sustain raises all around.

So I have received questions about bonuses and hazard pay. Here is another quote from the FAQ: “CILs are encouraged to have policies in place that adequately support hazard pay decisions including ensuring policies are fair and equitable across the agency.” Typically you are required to have these policies in place before any incentive or bonus or other special pay is invoked. Spontaneous bonuses have never been allowed. Rather you are expected to have a plan in place that everyone is aware of, and staff may choose to meet the requirements for the extra pay or not. Here is what Uniform Guidance says:

45 CFR  75.430 Compensation—personal services. (f) Incentive compensation. Incentive compensation to employees based on cost reduction, or efficient performance, suggestion awards, safety awards, etc., is allowable to the extent that the overall compensation is determined to be reasonable and such costs are paid or accrued pursuant to an agreement entered into in good faith between the non-Federal entity and the employees before the services were rendered, or pursuant to an established plan followed by the non-Federal entity so consistently as to imply, in effect, an agreement to make such payment.

As you can see in (f) Incentive compensation may be allowable if it meets the test of reasonable and if there was an “agreement entered into in good faith” with the employees in advance, before the service was rendered. This agreement would not necessarily be in writing, although an approved policy and procedure would be the typical way to agree in advance to such an item. An “established plan” would also typically be in either the budget or in policy or in some other way documented IN ADVANCE of the expenditure being made.  Hazardous pay seems to fit this category. Let’s look at the FAQ again:

“Not all work being done during current stay-at-home orders is considered hazardous. Hazard pay means that employees are paid additional wages for performing hazardous duty or work involving physical hardship, including exposure and potential exposure to the COVID-19 virus. Work duty that requires this hardship that is not adequately alleviated by alternative stations or protective devices are deemed to impose a physical hardship. It is possible and likely that an employee may have some hours that are worked in a hazardous condition and others that are not.”

I suggest that you approach any additional pay to employees very, very carefully. If I were in your shoes, I don’t think I would feel right about giving or taking extra pay.

I suggest caution because, when these funds are audited, I personally think one big red flag will be how much of your CARES Act allotment was used to pay current staff.

Can I give staff more pay using CARES Act funds?

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