In the spring of 2020, the Office of Head Start (OHS) authorized programs to continue to pay wages and provide benefits for staff who would otherwise be employed but are unable to report to their full work duties during center closures. The ability of grantees to pay wages and benefits remains in effect through Sept. 30, 2020. Here are some questions and answers about what comes next.
Does OHS have expectations for continued payment of staff wages and benefits after Sept. 30, 2020?
As programs began to close centers in the face of COVID-19 in spring of 2020, OHS encouraged continued payment of wages and benefits for staff unable to report to work due to center closures. Continued payment of wages and benefits assured the availability of staff needed to deliver services remotely and supported the grantee's ability to recall staff for on-site work when centers reopened. The flexibility for continued payment of wages and benefits was extended through Sept. 30, 2020, in large part to allow grantees time to assess program operations, budgeting, and staffing needs for the upcoming program year. Further extension of the wage and benefit flexibility is not expected.
Now that grantees are beginning the 2020–2021 program year, programs need to determine how they will deliver services and staff accordingly. OHS understands that, as programs open for services during the upcoming year, services may be in-person, remote, or some combination of in-person and remote services. How services are delivered may change throughout the year as community circumstances evolve. Grantees should:
- In making staffing decisions, consider as their first question: What staffing is needed to support program services now and in the upcoming months?
- Review and update human resources policies and procedures to be consistent with staffing, wage, and benefit decisions.
- Be familiar with local, state, and federal wage and hour and employment laws.
- Consult fiscal, legal, and human resource advisors when needed, in order to assure that staffing plans support the delivery of services, can be accommodated within the program budget, and are in accordance with applicable requirements.
Is it allowable for programs to decide to continue paying staff that are not working?
In some circumstances, yes, but in others, no.
First, it is important for grantees to be clear on what "working" and "not working" means, and to develop policies and procedures that define how an employee will be classified as working or not working. A center-based teacher now delivering remote learning services from home is working. A cook who is now functioning as a food coordinator to link families with community food resources is working. An employee who experiences changes in the place or type of services provided to the employer is still working, just in a different place or capacity.
In determining whether to pay staff wages and benefits, programs need to keep in mind the Cost Principles in the Uniform Guidance at 45 CFR Part 75 and how costs relate to service delivery. For Coronavirus Aid, Relief, and Economic Security (CARES) Act funds, wages and benefits must be necessary to respond to COVID-19 and support the delivery of comprehensive Head Start services. With respect to all expenses, an allowable cost must be necessary and reasonable for the performance of the federal award under the circumstances prevailing at the time the decision was made.
Note: As the italicized language indicates, certain costs that would be unreasonable or unallowable in normal circumstances could be considered reasonable and allowable, given the circumstances prevailing during the COVID-19 pandemic.
Short-term payment of staff wages and benefits during temporary closures may be more cost effective than ending the employment relationship (not paying wages and benefits) and losing the ability to recall qualified staff when the center reopens. Continued payment of wages and benefits to employees unable to report to centers that are temporarily closed is necessary and reasonable if the staff are needed for recall following the temporary closure or are engaging in remote work at the direction of the employer during the temporary closure. On the other hand, if services are being delivered remotely for an extended period of time, some positions may not need to be filled and layoffs or separations from employment may be warranted.
In all cases, thoughtful spending decisions necessary to implement the delivery of program services, supported by adequate documentation, creates a clear path to allowable costs. OHS has developed a wide range of resources that can be found on the Early Childhood Learning and Knowledge Center to assist grantees in making local programmatic and fiscal decisions.
From OHS CAMP Session 2
Q1: Are programs expected to continue to pay wages and benefits to staff whose work is not needed for the delivery of program services? Factors affecting allowability of costs, 45 CFR §75.403
A1: The primary purposes of the wage and benefit payment flexibility are for the program to retain the ability to direct the remote work of staff and to assure that staff are subject to recall to active employment when needed. As programs develop their plans for delivery of services during the upcoming program year, associated staffing needs must also be established. It is anticipated that programs in some areas will continue to offer remote services, while others will resume center-based services or create some combination of remote and on-site services, depending on their individual circumstances and communities. Once staffing needs are determined, programs are expected to instruct staff to engage in designated remote work activities or return to their centers. If a staff member is unable or unwilling to accept their work assignment, grantees may, subject to any applicable laws and regulations, terminate the staff member's employment with the organization. In making decisions about individual staffing and employment status, grantees are reminded to assure compliance with applicable requirements, including their own leave policies, collective bargaining agreements to which they are a party, state employment and leave laws, the federal Family and Medical Leave Act, and the Americans with Disabilities Act. Programs will need to work closely with their human resource, benefits, insurance, and legal professionals in making employment decisions.
Q2: Do programs have the flexibility to make budget adjustments to hire additional staff to assist with health, safety, and sanitation requirements? Revision of budget and program plans, 45 CFR §75.308(e)
A2: Yes, many programs have hired additional staff. Hiring more staff to assist with health, safety, and sanitation requirements is an allowable program cost and the Coronavirus Aid, Relief, and Economic Security (CARES) Act funds can be used for such needs. Under the Coronavirus Disease 2019 (COVID-19) Fiscal Flexibilities (ACF-IM-HS-20-03), in order to allow grantees more flexibility to spend funds as needed to respond to COVID-19 and, when possible, quickly move to reopen closed centers, prior approval is waived for budget transfers between direct cost categories for an aggregate amount not to exceed $1 million between Jan. 20, 2020 and Dec. 31, 2020.
Q3: Can staff receive a stipend for using their personal cell phones while providing virtual services? Factors affecting allowability of costs, 45 CFR §75.403
A3: Yes, staff may receive a stipend for using their personal cell phones while providing virtual services. However, programs should continue to follow applicable cost principles and should ensure all cost are necessary, reasonable, and allocable to Head Start use. It may be difficult to allocate between the normal personal cost of the cell phone and the additional program cost due to virtual service delivery, as many cell phone plans are unlimited. Any reasonable basis can be used to allocate between the normal, personal use and Head Start use of a cell phone, but if allocation is not possible, the program could provide a stipend for the additional cost. Adequate documentation must always be maintained to demonstrate compliance with cost principles.
Q4: Can CARES Act funds be used to pay staff hazard pay? Compensation–fringe benefits, 45 CFR §75.431
A4: If a program wants to provide a financial incentive for staff to return to work as centers open, the program must develop policies and procedures to establish the circumstances under which a financial incentive (e.g., hazard pay) will be provided, the amount(s) to be paid, and how payments will be implemented. All incentive payments must meet the requirements of the Uniform Guidance at 45 CFR §75.431.
Last Updated: November 11, 2020