When Back Pay Is Not Good Enough

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By on January 11, 2019 in Pay & Benefits with 0 Comments

Wrist watch sitting on a spread of $100 bills - time is money, back pay

The ongoing partial government shutdown is dominating news coverage just about everywhere. With President Donald Trump making his case Tuesday night, followed by House Speaker Pelosi and Senate Democratic Leader Schumer, we did not hear anything that would resolve the shutdown.

One thing we do hear a lot is that federal workers who are working without pay or who have been sent home without pay will almost certainly get back pay once the shutdown is over. Contractors who have been sent home without pay will almost certainly not get back pay.

Two actions Congress should take

Is that good enough? I believe the answer is no. The Congress cannot do much about contractor pay, but it certainly can do something about pay for federal workers. There are two actions they should take as soon as possible.

Guarantee back pay for federal workers

Shutdowns are the result of the breakdown in our political processes, a problem that is caused by politicians and not by federal workers. When these political failures lead to a lapse in appropriations, there should be no doubt that workers will receive back pay. Legislation to make that guarantee a matter of law, rather than the good will of Congress and the President, would be easy to draft and would probably pass easily.

Eliminate the need for back pay by paying federal workers during a lapse of appropriations

Paying employees during a shutdown is considered to be a violation of the Anti Deficiency Act and Article I, Section 9, of the Constitution of the United States. The Constitution says, “No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law ….”

It is certainly within the power of the Congress and the President to change the law to require that agencies continue paying employees during a lapse in appropriations. Perhaps doing so would take some of the sting out of a shutdown, weakening the political benefit and perceived leverage that one side or the other might have. If that is the case, then the primary reason for not continuing pay is that federal workers would be less effective as political pawns.

That is not a particularly good reason to put the financial well-being of federal employees at risk. The fact that a long shutdown may cause agencies to lose some of their best talent and exacerbate recruiting problems many agencies already experience is another reason why this issue needs to be resolved for good.

Why is back pay not enough?

The answer is simple. Many people do not have the money to pay their bills when their pay stops.

Should everyone have savings for emergencies? Absolutely. Can everyone afford to save money to create that buffer? No. A 2016 study by The Associated Press-NORC Center for Public Affairs Research found that 3/4 of people in households earning less than $50,000 per year, and 2/3 of those making $50,000 – $100,000, would have difficulty coming up with $1,000 to cover an emergency expense.

If you cannot come up with $1,000, imagine what happens when your paycheck stops. Missing even one paycheck could mean a family cannot pay the rent, or the mortgage. It gets even more basic than that. One federal executive told me his lower-paid employees who are excepted and continuing to work are worried that they will not be able to pay for gas to get to work. Another executive said he was concerned that employees would start leaving for other jobs. These are not abstract concerns about what may happen – they are real-life problems that are happening today.

One paycheck missed is a problem. What happens if it becomes two? Or more? The reality is that the majority of American households are one or two paychecks away from being insolvent. It is not because they are spendthrifts, or because they are too stupid to save. It is just basic math. So while it is easy for us to say that they will get back pay, and that they just have to adjust for a while, the reality of life is much more harsh. Some creditors will give people a break, but others will not. Even those with little debt may find themselves having no money for groceries or gas.

I know what that is like. My federal career started 40 years ago as a GS-5. I did not come from a family with money and I worked at K-mart while I was in school to pay for my education, so I lived paycheck-to-paycheck. Early in my first year on the job, I ran out of money before the end of one pay period. Then I ran out of gas driving home from work because I had no money to buy gas. My boss, a very kind man named Jim Thompson, helped me out. So when a federal executive tells me his employees are worried about being able to buy gas to get to work, I believe him. And I understand their fear.

We are not close to having a solution for our political dysfunction, but we could have a solution for the abuse of federal workers that it causes. That strikes me as the least we can do to treat federal workers fairly.

This column was originally published on Jeff Neal's blog, ChiefHRO.com, and has been reposted here with permission from the author. Visit ChiefHRO.com to read more of Jeff's articles regarding federal human resources and other current events along with his insights on reforming the HR system.

© 2019 Jeff Neal. All rights reserved. This article may not be reproduced without express written consent from Jeff Neal.

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About the Author

Jeff Neal is a senior vice president for ICF and founder of the blog, ChiefHRO.com. He has 33 years in federal service, including serving as Chief Human Capital Officer for the Department of Homeland Security and Chief Human Resources Officer for the Defense Logistics Agency. Jeff is also a Fellow and Director at the National Academy of Public Administration and a Partnership for Public Service SAGE.

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