As many of you are aware by now, State and Local Governments across the country have split $150 billion in Federal aid under a provision of the Coronavirus Aid Relief and Economic Security (CARES) Act. The division of these dollars, made available through the new Coronavirus Relief Fund, is allocated to each State and governmental entity based on a specific mathematical formula that was created and made part and parcel to the legislation itself. It is important to note that Governmental use of CARES Act money is restricted to:
- “Necessary Expenditures” incurred as a result of the COVID-19 pandemic;
- The expenditures must not have been accounted for in the budget most recently approved as of the enactment of the CARES Act (March 27); and
- The necessary expenditures must be incurred between March and December of 2020.
Distribution of this money is based on population alone and each state is guaranteed at least $1.25 billion even if its population share would indicate a lesser amount. However, local governmental entities (in New Jersey County Governments) with populations of 500,000 or more were also eligible to apply for and in fact did receive aid directly from the Federal Government. When this aid was allocated to some of our Counties, those that qualified based on population were permitted to receive 45% of the amount allocated for their population, while the State of New Jersey retained the other 55% as it also “serves” that County’s particular population.
However, in addition to the foregoing, for Counties that have a population that is less than 500,000 the State of New Jersey has the ability to retain 100% of their share of the federal aid. Based on the foregoing and as of today, the Counties within the State of New Jersey that have less than 500,000 residents have not received direct funding of their “share” of the CARES Act money and a congressional delegation led by Congresswoman Mickie Sherill has been pressuring Governor Murphy to release a proportional share of CARES Act funds to each County with a population of less than 500,000 as a matter of fairness.
At this point in time many of you are probably asking yourselves “What does County and State CARES Act funding have to do with me and my employment as a First Responder?” The reason that we bring this to your attention is to make you aware that many of the Counties that have already received their portion of the CARES Act aid (Bergen, Camden, Essex, Hudson, Middlesex, Monmouth, Ocean, Passaic and Union) currently have plenty of funds available to provide First Responders with “Hazard Pay” that the Federal Government has deemed to be a “Necessary Expenditure” under the CARES Act. Furthermore, should Governor Murphy release CARES Act funds for the less populated Counties they too will have adequate money available for the authorization of Hazard Pay.
To determine if the CARES Act funding can be used for “Hazard Pay” one needs to look to the guidance that was published by the Federal Department of the Treasury on April 22nd, 2020. Within the body of the publication it states that “…funds that a governmental agency receives from the CARES Act may be used for “Payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID19 public health emergency”. However in an effort to provide definitive guidance on this statement, additional guidance was issued on May 4th, 2020 which state:
“How does a government determine whether payroll expenses for a given employee satisfy the “substantially dedicated” condition?
The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by the COVID-19 public health emergency. For this reason, and as a matter of administrative convenience in light of the emergency nature of this program, a State, territorial, local, or Tribal government may presume that payroll costs for public health and public safety employees are payments for services substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the chief executive (or equivalent) of the relevant government determines that specific circumstances indicate otherwise.
In addition to the foregoing, the April 22nd, 2020 publication provides a non-exhaustive list of examples of costs that would not be eligible expenditures of payments under the CARES Act. These expenditure examples are:
- Expenses for the State share of Medicaid.
- Damages covered by insurance.
- Payroll or benefits expenses for employees whose work duties are not substantially dedicated to mitigating or responding to the COVID-19 public health emergency.
- Expenses that have been or will be reimbursed under any federal program, such as the reimbursement by the federal government pursuant to the CARES Act of contributions by States to State unemployment funds.
- Reimbursement to donors for donated items or services.
- Workforce bonuses other than hazard pay or overtime.
- Severance pay.
- Legal settlements.
Finally, in an effort to define “hazard pay” the May 4th, 2020 Department of the Treasury FAQ’s provide a question and answer regarding the same. Within the document it states:
Is there a specific definition of “hazard pay”?
Hazard Pay means additional pay for performing hazardous duty or work involving physical hardship, in each case that is related to COVID-19.
Based on the foregoing, if there was ever a doubt as to whether Hazard Pay was an authorized expenditure under the CARES Act, the Federal Government has definitively answered this question in the affirmative. Therefore, if your County has already received its share of the CARES Act funding, the money is there and your Local should be seeking the hazard pay that you rightfully deserve. If you work and live within one of New Jersey’s smaller counties, you too should be seeking compensation for Hazard Pay and hopefully Federal CARES Act funding will be on the way.