The federal government occasionally goes through shutdowns when Congress fails to pass legislation funding government agencies and departments. These shutdowns which can last anywhere from a few days to several weeks, result in hundreds of thousands of federal workers being furloughed or required to work without pay. To provide some relief to federal workers during these difficult times Congress has passed legislation guaranteeing back pay once the shutdown ends. This article will examine the impact of government shutdowns on the federal workforce and legislative efforts to ensure workers receive their pay retroactively.
How Shutdowns Impact Federal Employees
During a shutdown federal employees fall into three main categories
-
Furloughed workers – Those who are sent home and prohibited from doing any work They do not receive pay during the shutdown.
-
Essential or “excepted” workers – Those required to work without pay during the shutdown because their jobs are considered vital for national security, public safety, or other essential government functions.
-
Workers funded outside annual appropriations – A small portion, such as postal workers, whose salaries come from sources other than annual spending bills. They continue working and receiving pay as usual.
Neither furloughed nor excepted employees receive their usual paychecks while the shutdown is in effect. According to the Partnership for Public Service, recent shutdowns have impacted over 800,000 federal workers. The specific effects vary by agency based on factors like funding sources and whether their activities are deemed “essential.” For example, over 80% of Commerce Department staff were furloughed in the 2018-2019 shutdown, compared to just 5% at Veterans Affairs.
Hardship for Federal Workers
Missed paychecks can cause significant financial hardship for federal employees. A 2019 Federal Reserve report found that 4 in 10 adults would have difficulty covering an unexpected $400 expense. Federal workers also have continuing expenses like mortgages, rent, car payments, childcare, and utilities. While essential personnel are working to keep the country safe and functioning, they are not getting paid for their efforts.
Prolonged shutdowns increase stress on the workforce. Employees may need to take on second jobs, deplete savings, or go into debt. Morale suffers when workers feel used as political pawns. There are concerns that shutdowns could spur some of the most talented civil servants to leave government service altogether if the uncertainty continues.
Legislative Fixes
To ease the burden on federal employees, Congress has passed legislation in recent shutdowns to guarantee retroactive pay once full funding is restored.
-
In the 2013 shutdown, the Pay Our Military Act provided pay for military personnel. A separate bill gave retroactive pay to furloughed civilians.
-
In the 2018-2019 shutdown, the Government Employee Fair Treatment Act guaranteed back pay for all impacted federal workers, including those who were furloughed. President Trump signed the bill into law in January 2019.
These laws provided certainty that employees would eventually get their paychecks, but did not cover the hardships of going without pay during the shutdown itself.
Some members of Congress have pushed for additional measures:
-
Bills to pay essential personnel who are working without pay during the shutdown, rather than only retroactively.
-
Extending protections to cover federal contractors, who are not directly compensated for lost wages.
-
Allowing furloughed workers to take outside employment during the shutdown to temporarily supplement their income.
However, none of these proposals have become law so far.
Looking Ahead
Guaranteeing back pay is a valuable step, but does not fully address the problems government shutdowns cause for civil servants and their families. The preferred solution is for Congress and the White House to agree on full funding to keep agencies open and federal employees at work. Barring that, further expanding protections for the workforce could help minimize the damage from future shutdown showdowns. As shutdowns continue to occur periodically, there may be pressure for more comprehensive solutions to support those who dedicate their careers to public service.
What is a Government Shutdown?
A government shutdown means the government can’t spend money that requires annual appropriations, which affects its ability to pay its employees and keep facilities and buildings open where those employees work. Some employees are considered essential such as air traffic controllers and would have to work without pay during the shutdown. Unlike previous shutdowns, however, the Government Employee Fair Treatment Act of 2019 entitles federal employees to backpay for as long as the appropriations are lapsed.
It should be noted that employees of federal contractors are not guaranteed backpay under this 2019 law, but a company can decide if they want to provide backpay to these employees.
What Won’t Be Impacted by a Government Shutdown?
The list is small of federal agencies and processes that continue to function through a shutdown.
- Social Security checks will go out to recipients.
- Social Security Administration will not issue Social Security cards.
- The Employee Services toll-free hotline will be unavailable.
- Medicare open enrollment should not be impacted.
- Medicaid enrollment is handled through individual states.
- The U.S. Postal Service will continue to deliver the mail.
- Members of Congress still get paid.
According to the contingency documentation from the Department of Health and Human Services, federal exchange activities will continue, which means individuals will have access to the healthcare marketplace.
Accounting professionals should have conversations with their clients to gain a better understanding of each client’s financial situation and be prepared to offer any resources that might help.
Paychex continues to monitor the developments in Congress and will provide updates as they occur. We understand the challenges facing employers and offer educational resources and a variety of funding options to consider that might fit your business needs.
Tags
* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. Heading
Congress approves bill to pay back federal employees once shutdown is over
FAQ
Do federal workers get paid during government shutdown?
Is Congress getting paid during shutdown?
Do postal workers get paid if the government shuts down?
What happens to contract workers during a government shutdown?
Will government employees be paid after a government shutdown?
The Government Employee Fair Treatment Act of 2019 (P.L. 116-1) guaranteed that all employees of the federal government will be paid following the end of a government shutdown. This statutorily guaranteed retroactive pay applies to furloughed employees and employees who are required to work during a shutdown.
Do federal employees have to be compensated after a government shutdown?
The Government Employee Fair Treatment Act of 2019 (S. 24) requires federal employees who are furloughed or required to work during a lapse in appropriations resulting from a government shutdown to be compensated for the period of the lapse. Federal employees must be compensated on the earliest date possible after the shutdown ends.
Will trump guarantee back pay for federal employees impacted by shutdown?
Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts PodcastOne President Donald Trump has signed a new bill into law guaranteeing back pay for federal employees impacted by the partial government shutdown. Government Employee Fair Treatment Act covers both furloughed and excepted employees.
Will furloughed federal workers be paid during a shutdown?
Salaries: Furloughed federal workers and employees who have been deemed essential and forced to work during a lapse in appropriations will not be paid during a shutdown.
Do government contractors get back pay during a shutdown?
If government contractors have to work without pay during a shutdown, they are not guaranteed to receive back pay under federal law like furloughed and excepted federal employees. In many previous shutdowns, contractors did not receive retroactive pay through legislation, Bishop Jr. says.
Will federal workers get back pay after a shutdown?
In previous appropriations lapses, Congress had to approve back pay for furloughed federal workers following each shutdown, but that process has since been automated. Similarly, employees who worked overtime during the shutdown will be granted premium pay, although not until after the government has reopened.