What Happens to Your Pay and Benefits During a Shutdown

A government shutdown does not appear likely to occur. But, as current legislation funding the government expires on December 11, and no new funding legislation has been passed, a shutdown is still possible. What will be the impact on federal pay and benefits if this should occur?

Will there be a government shutdown this year? It seems unlikely as leaders of both parties profess a shutdown is undesirable. But, since legislation funding the federal government expires on December 11th, a shutdown is still a possibility. If it should occur, there is no doubt that some federal employees will be nervous about their pay and benefits.

Publicly, the Obama administration is opposed to funding the government for a short duration instead of for the remainder of the fiscal year. A short-term omnibus spending bill may still end up passing in Congress that would last for a few more months for further consideration when a new Congress will be in charge of the legislative branch. One funding possibility is the combination of an omnibus bill that funds most agencies through the end of fiscal 2015 but with a short-term spending measure funding immigration-related activities.

In the event that a government shutdown does occur, as happened in October 2013, what will happen to your pay and benefits? Based on guidance from the Office of Personnel Management (OPM) issued during the last shutdown, here is how federal employees may be impacted if there is another shutdown this time around.

Will employees who are furloughed get paid?

Congress will determine whether furloughed employees receive pay for the furlough period. Agencies must pay excepted and exempted employees for the days they work during a shutdown but employees will not receive the money until after the shutdown has ended.

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 when 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, 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.

Is taking annual leave an option during a government shutdown?

No. A federal employee cannot use annual leave instead of taking an unpaid furlough day during a government shutdown. Also,sick or annual leave that has already been scheduled will be canceled if the government goes into shutdown mode.

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.

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.

May employees take other jobs while on furlough?

While on furlough, an individual remains an employee of the Federal Government. Therefore, executive branch-wide standards of ethical conduct and rules regarding outside employment continue to apply when an individual is furloughed (specifically, the executive branch-wide standards of ethical conduct (the standards), at 5 CFR part 2635). In addition, there are specific statutes which prohibit certain outside activities, and agency-specific supplemental rules that require prior approval of, and sometimes prohibit, outside employment. Therefore, before engaging in outside employment, employees should review these regulations and then consult their agency ethics official to learn if there are any agency- specific supplemental rules governing the employee.

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.

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.

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

No. An employee (including excepted employees) who does not work on a holiday will not receive pay for a holiday that occurs during a shutdown furlough.

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.

As noted in the introduction, a government shutdown is not likely. But, since it is a possibility, knowing how you will be impacted so that you have considered any financial impact on your personal situation is a good idea.


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47