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undergoing further analysis. Under the second option, the final rule provides recipients an option <br />to hire above the pre -pandemic baseline, by adjusting the pre -pandemic baseline for historical <br />growth in public sector employment over time, as well as flexibility on roles for hire. Recipients <br />may choose between these options but cannot use both. <br />To pursue the first option, recipients may use SLFRF funds to hire employees for the <br />same positions that existed on January 27, 2020 but that were unfilled or eliminated as of March <br />3, 2021, without undergoing further analysis. For these employees, recipients may use SLFRF <br />funds for payroll and covered benefit costs that are obligated by December 31, 2024 and <br />expended by December 31, 2026, consistent with the Uniform Guidance's Cost Principles at 200 <br />CFR Part 200 Subpart E. This option provides administrative simplicity for recipients that would <br />simply like to restore pre -pandemic positions and would not like to hire above the pre -pandemic <br />baseline. <br />To pursue the second option, recipients should undergo the analysis provided below. In <br />short, this option allows recipients to pay for payroll and covered benefits associated with the <br />recipient increasing its number of budgeted full-time equivalent employees (FTEs) up to 7.5 <br />percent above its pre -pandemic employment baseline, which adjusts for the continued <br />underinvestment in state and local governments since the Great Recession. State and local <br />government employment as a share of population in 2019 remained considerably below its share <br />prior to the Great Recession in 2007, which presented major risks to recipients mounting a <br />response to the COVID-19 public health emergency. The adjustment factor of 7.5 percent results <br />from estimating how much larger 2019 state and local government employment would have <br />needed to be for the share of state and local government employment to population in 2019 to <br />have been back at its 2007 level and is intended to correct for this gap. <br />180 <br />