Force Account Labor

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1292-DR
ApplicantEast Carolina University
Appeal TypeSecond
PA ID#000-UWX1O
PW ID#3377-1
Date Signed2001-05-31T04:00:00
Citation FEMA-1292-DR-NC, PA ID # 000-UWX1O-00, East Carolina University, PW 3377-1, Force Account Labor

Cross-reference Emergency Work Labor Costs, Overtime

Summary Following Hurricane Floyd, East Carolina University (ECU) closed for seven days and three hours. During this time, all employees were paid their normal salaries. Employees deemed critical were asked to perform emergency tasks and paid "premium pay" for straight time, in addition to overtime and their normal salaries. ECU claimed the costs of the premium pay, overtime and associated benefits as "overtime labor costs" and Project Worksheet (PW) 3377-0 was prepared for $585,834. Upon review, FEMA found that $42,457 for eligible overtime and benefits was approved in PW 2992. For this reason, PW 3377-1 was prepared to deobligate the $585,834. ECU appealed this decision, requesting $537,310 for premium pay and associated benefits. It claimed that the premium pay should be recognized as eligible overtime, was warranted due to the disaster, and was approved in accordance with the State's in-range salary adjustment policy. FEMA denied the appeal stating that ECU did not have a uniformly applied overtime policy in place at the time of the disaster. In its second appeal, ECU provided the State's policy on in-range salary adjustments and the University's procedures for implementing this policy, which were in place at the time of disaster. ECU states that it applied the policy uniformly and again asks that the premium pay be considered eligible overtime expenses.

Issues 1) Is straight- or regular-time pay for permanent employees performing emergency work eligible for reimbursement? 2) Did ECU have a written policy in place prior to the disaster, which provided for labor costs of essential employees performing disaster-related emergency work?

Findings 1) No, except in cases when employees are called back from administrative leave to perform disaster-related emergency work and these costs are provided for in a written policy prior to the disaster. 2) No.

Rationale 44 CFR  206.228(a)(4), Office of Management and Budget, Circular A-87, Attachment A, Section C (1)(e)

Appeal Letter

May 31, 2001

Charles J. Ellstrom
Deputy Chief of Operations
North Carolina Division of Emergency Management
Disaster Recovery Operations Center
4716 Mail Service Center
Raleigh, North Carolina 27699-4716

RE: Second Appeal - East Carolina University, Force Account Labor, FEMA-1292-DR-NC, PW 3377

Dear Mr. Ellstrom:

This is in response to the referenced appeal forwarded by your office on January 23, 2001. East Carolina University (ECU) is asking FEMA to recognize labor costs associated with "premium pay" as eligible overtime costs. It is requesting a total of $537,310.

Due to Hurricane Floyd, ECU closed from September 15-27, 1999. Critical employees were asked to work during this period and were compensated with premium pay and overtime, in addition to their regular salaries. The premium pay rate was 100 percent of the employee's regular hourly wage. ECU claimed "overtime labor costs" for 35,111 hours (32,200 regular hours and 2,911 overtime hours), at a total cost of $585,834. Project Worksheet (PW) 3377-0 was obligated for this amount. Upon further review, FEMA found that PW 2992 had been obligated for $42,457 to reimburse ECU for the actual overtime labor and allowable benefits. FEMA de-obligated PW 3377-0 because standard overtime had been reimbursed on another PW and special overtime rates were not available for regular time hours.

On June 19, 2000, ECU submitted its first appeal requesting $537,310 in "overtime costs associated with the premium pay for 32,200 regular hours" and fringe benefits. It claimed that the premium pay was warranted due to the emergency circumstances and was approved in accordance with the State's in-range salary adjustment policy. Your office did not support ECU's appeal request. FEMA denied the appeal on October 6, 2000, stating that ECU had not demonstrated it had a uniformly applied overtime policy in place at the time of the disaster.

ECU submitted its second appeal on December 4, 2000. It included the State's policy on in-range salary adjustments, which was implemented prior to the disaster. ECU explained that while the university was closed, essential employees who performed emergency work were provided with premium pay. It was provided in addition to their regular salary, but applied to regular hours worked. ECU states that it uniformly applied the premium pay scheme to all such employees. It claims that the fact that other state agencies did not use the premium pay scheme during Hurricane Floyd is of no consequence because agencies were impacted differently. Finally, ECU asks that these premium pay expenses be recognized as eligible overtime costs.

The State's in-range salary adjustment policy allows salary adjustments for permanent employees to "recognize permanent and significant job change, resolve bona fide inequitable salary relationships, and/or respond to unique labor market conditions." The policy only allows for a salary increase of up to 10 percent, and requires administrative documentation, such as a new position description. ECU acknowledged in the PW and in its first appeal that a special exception to the in-range salary adjustment policy was made in this case. It stated, "University policy and North Carolina Office of State Personnel guidelines did not specifically address compensation for the specific circumstances." A memorandum dated September 30, 1999, and sent via email to university employees, documents ECU's rate of premium pay in this situation. The in-range salary adjustment policy does not address labor costs in emergency situations, as is clear from the language of the policy and the fact that the Office of State Personnel made a special exception in order to apply it in these circumstances.

FEMA may pay extraordinary costs for critical employees who are asked to perform disaster-related emergency work when otherwise on administrative leave. However, applicants must provide for such labor costs in a written policy prior to the disaster. In accordance with the Office of Management and Budget, Circular A-87, Attachment A, Section C (1)(e), costs must be consistent with policies, regulations and procedures that apply uniformly to federal awards and other activities. ECU had no relevant written policy in place at the time of the disaster. As such, FEMA cannot reimburse ECU for these costs. For this reason, I am denying this appeal.

Please inform the applicant of this determination. My decision constitutes the final decision on this matter as set forth in 44 CFR  206.206.

Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

cc: Mary Lynne Miller
Acting Regional Director
FEMA Region IV
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