American Rescue Plan Act of 2021: Allowable Costs and Cost Principles (Including Sample Policy and Implementation Tools)

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The Coronavirus State and Local Fiscal Recovery Funds program of the American Rescue Plan Act of 2021 (ARP/CSLFRF) provides funding to all NC counties and municipalities to address pandemic-related and essential infrastructure needs. One of the eligible expenditure categories of ARP/CSLFRF monies is to respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay. US Treasury’s Final Rule states that

A recipient may use funds to provide premium pay to eligible workers of the recipient who perform essential work … provided that any premium pay … must respond to eligible workers performing essential work during the COVID-19 public health emergency. A recipient uses premium pay …. to respond too eligible workers performing essential work during the COVID-19 public health emergency if: (1) The eligible worker’s total wages and remuneration, including the premium pay, is less than or equal to 150 percent of the greater of the eligible worker’s residing State’s or county’s average annual wage for all occupations as defined by the Bureau of Labor Statistics’ Occupational Employment and Wage Statistics; (2) The eligible worker is not exempt from the Fair Labor Standards Act overtime provisions (29 U.S.C. 207); or (3) The recipient has submitted to the Secretary [of US Treasury] a written justification that explains how providing premium pay to eligible worker is responsive to the eligible worker performing essential work during the COVID-19 public health emergency (such as a description of the eligible workers’ duties, health, or financial risks faced due to COVID-19, and why the recipient determined that the premium pay was responsive despite the worker’s higher income).

The following summarizes these parameters, identifies substant