President Trump said this week that he thinks another government shutdown is likely at the end of the month.
He said, “I think we have a problem, because I think we’re going to probably end up in another Democrat shutdown,” adding, “The shutdown cost us a lot, and I think they’ll probably do it again, that’s my feeling. We’ll see what happens.” He made the remarks in a recent interview with Fox Business.
Congress has until January 30 to pass a spending resolution to avoid another partial government shutdown.
These are some things federal employees should know with the possibility of another shutdown looming.
Back Pay
While a shutdown may cause a disruption to regular paychecks, federal employees will ultimately be paid. This is because of the Government Employee Fair Treatment Act (S. 24), a 2019 law that 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.
According to guidance from the Office of Personnel Management (OPM), back pay will be provided as soon as possible to employees once funding is restored by Congress. It states, “Retroactive pay will be provided on the earliest date possible after the lapse ends, regardless of scheduled pay dates. (See 31 U.S.C. 1341(c)(2).) If retroactive pay cannot be provided by the normal pay date for the given pay period, it will be provided as soon as possible thereafter.”
This applies to both federal employees who have to work during a shutdown and those that are furloughed.
Other Benefits
Coverage under the Federal Employees Health Benefits (FEHB) program continues during a government shutdown, and agencies continue to process FEHB transactions as well. The same is true for the Federal Employees Dental and Vision Insurance Program (FEDVIP).
In the event that the shutdown is a long one, federal employees will automatically begin to repay their share of FEHB and FEDVIP premiums that accumulated during the lapse in appropriations through payroll withholding.
Federal Long Term Care Insurance Program (FLTCIP) coverage does not stop during a government shutdown. Premiums will be paid from retroactive pay after the shutdown concludes, or they can be paid back from another source (i.e., automatic bank withdrawal) for FLTCIP enrollees who elected to make payments directly to the Carrier.
For FSAFEDS, employees remain enrolled, payroll deductions stop during non-pay status, and claims for eligible expenses will be reimbursed upon return to pay status after the shutdown ends.
The Thrift Savings Plan itself is not impacted by a shutdown and continues its normal daily operations. If participants have TSP loans, they are kept in good standing during the shutdown. The TSP’s call center will remain open and all the usual transactions available to participants will still be available.
Although the TSP itself is not impacted, contributions can be disrupted in the event of a long shutdown. Because federal employees are not getting paid during a government shutdown, TSP contributions stop, and for federal employees under FERS, agency matching contributions stop as well. However, TSP contributions will resume automatically once the shutdown ends and pay resumes.
Annual and Sick Leave
According to OPM, any leave that federal employees previously had scheduled during the period of the lapse in appropriations is canceled, so they will not be charged leave in those cases.
If a federal employee had properly scheduled “use-or-lose” annual leave that he or she was not able to use because of the lapse in appropriations, that leave must be restored. The employee’s agency will provide instructions for any action that the employee may need to take in this situation.
Both furloughed and excepted federal employees will receive credit for any annual and sick leave they would have otherwise accrued during the period of the government shutdown once Congress restores appropriations.
Excepted employees may request approval to use paid leave during a shutdown, but OPM notes that this is generally not expected. Instead, it makes more sense for agencies to place excepted employees in furlough status during approved absences, since they are entitled to retroactive pay without being charged leave.
Agencies may also use workplace flexibilities to accommodate off-duty time. If paid leave is requested under 31 U.S.C. 1341(c)(3), it must follow normal leave approval procedures, and payment will still be delayed until after the lapse ends. Unauthorized absences during a shutdown may result in AWOL status, which is not eligible for retroactive pay.
Federal employees with specific questions about their leave situations in the event of a partial government shutdown should contact their HR office for assistance.
Federal Retirement
Annuity payments are not disrupted during a government shutdown. Both CSRS and FERS retirees will continue to receive their monthly payments as scheduled according to OPM.
High 3 computations are not impacted by a government shutdown either. Because any federal employees who would have been in pay status if not for the lapse in appropriations will receive back pay, their high 3 average pay remains unaffected in the event it occurs during their highest earning years. This is an important point since this is what is used as the basis for calculating retirement benefits.
Be Prepared
Because of the unfortunate reality of government shutdowns, federal employees have to prepare for and endure them from time to time. Although much of it is beyond your control, there are some tips for things you can do that are within your control.
- Make financial preparations: Build cash reserves in an emergency fund, prioritize essential bills, and avoid taking on new debt; create a budget to plan spending, prioritizing the essentials (food, shelter, utilities) and limiting unnecessary spending (i.e. restaurants, entertainment)
- Debt management: Only take loans as a last resort for emergencies, not for immediate expenses
- Avoid withdrawing from TSP unless absolutely necessary
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