What Happens to Your Pay and Benefits During a Shutdown?

By on September 17, 2015 in Pay & Benefits with 18 Comments

Image of closed sign over DC capitol building

September 2015 is feeling a lot like September 2013 for federal employees. The threat of a another government shutdown at the end of the month has many feds concerned about their pay and benefits.

The Office of Personnel Management last revised its guidance on shutdown furloughs for federal workers during the last shutdown in 2013. However, much of that information would still apply for any shutdown that might occur this year.

Below are some of the more pressing questions and answers on federal pay and benefits as last published by OPM.

Note in the information below that OPM says it is up to Congress as to whether or not furloughed federal employees get paid during a shutdown. One Senator has already introduced legislation to ensure federal employees get paid in the event of a shutdown at the end of the month. This would, of course, only apply in the event that there is a shutdown and assuming the bill passes Congress and is signed into law by the president.

Excepted vs. exempt employees

Who are “excepted” employees?

In the context of shutdown furloughs, the term “excepted” is used to refer to employees who are funded through annual appropriations who are nonetheless excepted from the furlough because they are performing work that, by law, may continue to be performed during a lapse in appropriations. Excepted employees include employees who are performing emergency work involving the safety of human life or the protection of property or performing certain other types of excepted work. Agency legal counsels, working with senior agency managers, determine which employees are designated to be handling “excepted” and “non-excepted” functions. See http://www.opm.gov/policy-data-oversight/pay- leave/furlough-guidance/#url=Shutdown-Furlough for copies of OMB and DOJ issuances, which provide guidance on the application of these criteria.

(Note: Presidential appointees who are not covered by the leave system in 5 U.S.C. chapter 63 are not “excepted” as discussed above. However, they are not subject to furlough because their salary is an obligation incurred by the year, without consideration of hours of duty required, so they cannot be placed in a nonduty, nonpay status.)

Who are “exempt” employees?

Employees are “exempt” from furlough if they are not affected by a lapse in appropriations. This includes employees who are not funded by annually appropriated funds. Employees performing those functions will generally continue to be governed by the normal pay, leave, and other civil service rules.

What about employees who are neither “excepted” nor “exempt”?

Employees who are funded through annual appropriations but are not designated as excepted are barred from working during a shutdown, except to perform minimal activities as necessary to execute an orderly suspension of agency operations related to non-excepted activities. These employees will be furloughed.

How will employees be notified whether they have been designated to be handling “excepted” functions or not?

Each agency will determine the method and timing of notifying employees of whether they have been designated as an excepted employee.

Pay and benefits

Will employees who are furloughed get paid?

Congress will determine whether furloughed employees receive pay for the furlough period.

Are employees entitled to unemployment compensation while on furlough?

It is possible that furloughed employees may become eligible for unemployment compensation. State unemployment compensation requirements differ. Some States require a 1-week waiting period before an individual qualifies for payments. In general, the law of the State in which an employee’s last official duty station in Federal civilian service was located will be the State law that determines eligibility for unemployment insurance benefits. (See the Department of Labor website “Unemployment Compensation for Federal Employees” at http://workforcesecurity.doleta.gov/unemploy/unemcomp.asp.) Agencies or employees should submit questions to the appropriate State (or District of Columbia) office. The Department of Labor’s website provides links to individual State offices at http://www.servicelocator.org/OWSLinks.asp. A list of Federal Identification Codes (FIC) needed for unemployment compensation applications can be found here http://www.dol.gov/dol/shutdown/FIC_chart.pdf.

May agencies deny or delay within-grade or step increases for General Schedule and Federal Wage System employees during a shutdown furlough?

It depends on how long the shutdown furlough lasts. Within-grade and step increases for General Schedule (GS) and Federal Wage System employees are awarded on the basis of length of service and individual performance. Such increases may not be denied or delayed solely because of lack of funds. However, extended periods of nonpay status (e.g., because of a furlough for lack of funds) may affect the timing of such increases. For example, a GS employee in steps 1, 2, or 3 of the grade who is furloughed an aggregate of more than 2 workweeks during the waiting period would have his or her within-grade increase delayed by at least a full pay period. (See 5 CFR 531.406(b).)

If agency performance management policies and practices require the payment of performance awards to employees, can the payment be delayed until after the shutdown furlough?

Yes. Neither law nor regulation requires agencies to pay performance awards granted under 5 U.S.C. chapters 43 and 45 and 5 CFR 451.104(a)(3). If agency performance management policies and practices require the payment of performance awards, agencies may delay payment until after the furlough when funds are available.

Will excepted employees be paid for performing work during a shutdown furlough? If so, when will excepted employees receive such payments?

Agencies will incur obligations to pay for services performed by excepted employees during a lapse in appropriations, and those employees will be paid after Congress passes and the President signs a new appropriation or continuing resolution.

(Note: Presidential appointees who are not covered by the leave system in 5 U.S.C. chapter 63 are not subject to furlough, but are also barred from receiving pay during a lapse in appropriations. These Presidential appointees will be paid after Congress passes and the President signs a new appropriation or continuing resolution.)

Will employees receive a paycheck for hours worked prior to a lapse in appropriations?

Under Office of Management and Budget (OMB) guidance issued in 1980 (below), employees will receive this paycheck. Although the payroll for the last pay period before the lapse will be processed potentially during a period of furlough, the minimum number of payroll staff necessary for this process will be excepted from furlough for the minimum time required to issue the checks, including checks for the last pay period before the lapse. This guidance can be found in OMB’s August 28, 1980, Bulletin No. 80-14, Shutdown of Agency Operations Upon Failure by the Congress to Enact Appropriations, paragraph 3.b.(1) (Appropriations and funds). OMB has reviewed and concurs in this answer.

May an excepted employee be permitted to earn premium pay (e.g., overtime pay, Sunday premium pay, night pay, availability pay) during the furlough period?

Yes. Excepted employees who meet the conditions for overtime pay, Sunday premium pay, night pay, availability pay and other premium payments will be entitled to payment in accordance with applicable rules, subject to any relevant payment limitations. Premium pay may be earned but cannot be paid until Congress passes and the President signs a new appropriation or continuing resolution.

When an employee’s pay is insufficient to permit all deductions to be made because a shutdown furlough occurs in the middle of a pay period and the employee receives a partial paycheck, what is the order of withholding precedence?

Agencies will follow the guidance on the order of precedence for applying deductions from the pay of its civilian employees when gross pay is insufficient to cover all authorized deductions found at http://www.chcoc.gov/transmittals/TransmittalDetails.aspx?TransmittalID=1477.

Will an employee continue to be covered under the Federal Employee Health Benefits (FEHB) program during a shutdown furlough if the agency is unable to make its premium payments on time?

Yes, the employee’s FEHB coverage will continue even if an agency does not make the premium payments on time. Since the employee will be in a non-pay status, the enrollee share of the FEHB premium will accumulate and be withheld from pay upon return to pay status.

If there is a shutdown furlough, how does this impact a separating employee’s lump- sum payment for their unused annual leave?

In the event of a shutdown furlough, any payments incurred by the agency for an employee’s lump-sum payment will be delayed until funds are available.

Leave and other time off

May an employee not excepted from the furlough take previously approved paid time off (e.g., annual, sick, court, military leave, or leave for bone marrow/organ donor leave, or compensatory time off, including religious compensatory time off) during a shutdown furlough?

No. All paid time off during a shutdown furlough period must be canceled because the requirement to furlough supersedes leave and other paid time off rights. The Antideficiency Act (31 U.S.C. 1341 et seq.) does not allow authorization of any expenditure or obligation before an appropriation is made, unless authorized by law. Paid time off creates a debt to the Government that is not authorized by the Act. Therefore, agencies are instructed that during a shutdown furlough, all paid time off must be canceled.

May an excepted employee take previously approved paid time off or be granted new requests for paid time off during a shutdown furlough?

No. When an excepted employee is not working or not performing excepted activities in compliance with the Antideficiency Act, he or she cannot be in a pay status. Excepted employees must be either performing excepted activities or furloughed during any absence from work. The furlough must be documented by a furlough notice. If an excepted employee refuses to report for work after being ordered to do so, he or she will be considered to be absent without leave (AWOL) and will be subject to any consequences that may follow from being AWOL.

Will an employee “exempt” from furlough be paid for a holiday that occurs during a shutdown?

Employees are “exempt” from furlough if they are not affected by a lapse in appropriations. As such, an “exempt” employee will be paid for a holiday according to the normal rules governing holidays.

Will furloughed employees be paid for a holiday that occurs during a shutdown furlough?

Furloughed employees will not receive pay for a holiday that occurs during a shutdown furlough unless authorized by subsequent legislation.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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