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OPM has reinterpreted the rules around shutdown back pay, and it could have major consequences for federal employees. For years, guidance stated that furloughed workers would receive automatic back pay after a shutdown. But now, OPM says Congress must explicitly authorize it each time.
In this video, I explain:
What the old guidance said
What the new guidance removes
Why OPM made this change
How it affects furloughed federal employees
What to expect in future shutdowns
If you're a federal employee, this is a change you need to understand.
Related Articles
OPM Reinterprets Automatic Back Pay for Furloughed Federal Employees After a Government Shutdown
https://www.fedsmith.com/2026/02/04/opm-reinterprets-automatic-back-pay-for-furloughed-federal-employees-after-a-government-shutdown/
0:00 Introduction
0:19 What Did OPM Change?
2:40 Why Did OPM Make the Change?
Show More Show Less View Video Transcript
0:00
Hey everyone, I'm Ian Smith with
0:02
fedsmith.com.
0:03
I want to bring you an important news
0:05
update that you're going to want to be
0:06
aware of if you're a current federal
0:08
employee. There's been a major shift in
0:11
recent guidance from OPM. That's the
0:14
Office of Personnel Management that
0:16
could affect how you're paid after a
0:18
future government shutdown. This change
0:20
was first reported by Federal News
0:22
Network and I've also confirmed it in my
0:25
own research on the subject. OPM's
0:28
earlier guidance um that the last time
0:32
they updated this particular guidance
0:34
was back in 2025 in September I believe
0:37
and it explicitly stated that federal
0:40
employees who are furoughed
0:42
that is they go without pay during a
0:44
government shutdown
0:46
will receive back pay automatically. Um
0:49
and that's the case because of the
0:53
government employee fair treatment act
0:55
of 2019. That was a law that was enacted
0:58
and signed into law during President
1:00
Trump's first term that authorized back
1:03
pay for federal employees, both those
1:05
who were furled as well as those who are
1:08
accepted, meaning they still had to work
1:10
during a government shutdown.
1:13
And until just very recently, um, it was
1:16
interpreted that way. And here's what
1:18
the law states. Quote, "Each employee of
1:22
the United States government or of a
1:24
District of Columbia public employer
1:26
furlowed as a result of a covered lapse
1:28
in appropriations shall be paid for the
1:31
period of the lapse in appropriations.
1:34
And each accepted employee who is
1:36
required to perform work during a
1:38
covered lapse in appropriations shall be
1:41
paid for such work at the employees
1:43
standard rate of pay at the earliest
1:46
date possible after the lapse in
1:48
appropriations ends. regardless of
1:50
scheduled pay dates. So, that text seems
1:54
pretty clear, but um OPM has removed
1:59
that guarantee from its official
2:01
shutdown guidance. The guidance was
2:03
updated in January of 2026, so just
2:07
several days ago. And now it says that
2:10
Congress will decide whether furled
2:13
employees receive back pay. Here's what
2:16
the new guidance states. Congress will
2:18
determine via legislation whether furled
2:21
employees receive pay for furlow
2:24
periods. After any congressional action,
2:27
supplemental guidance may be issued to
2:29
assist agencies in determining pay and
2:31
service credit for such furlow periods.
2:34
So this is a major reinterpretation
2:36
because it shifts the assumption from
2:38
automatic to conditional. So why did OPM
2:41
make this change? Well, um, back in the
2:44
fall, Axios actually reported this back
2:47
in October that the Trump administration
2:49
was making the argument that the
2:51
Government Employee Fair Treatment Act
2:53
does not automatically guarantee back
2:55
pay for furoughed federal employees
2:59
and OPM's updated guidance is obviously
3:01
aligning with that position. There are
3:04
some lawmakers who disagree. Um, there
3:07
was a group that sent a letter to the
3:10
Office of Management and Budget in the
3:11
White House telling them to say that
3:15
automatic back pay is required in law.
3:18
But obviously that didn't happen and
3:19
they sent that letter back in October u
3:22
right after this report from Axios came
3:24
out. And it's interesting to note also
3:27
what Congress has done in the last
3:29
couple of shutdowns. We just had that
3:31
very brief partial shutdown that lasted
3:34
four days and then the one prior to that
3:36
that was the longest in the country's
3:37
history. In both of those cases,
3:40
Congress explicitly added backay
3:42
language to the funding bill that
3:44
resolved the shutdown. And that was done
3:47
presumably to ensure that furoughed
3:49
federal employees did receive back pay
3:52
or retroactive pay.
3:55
And that may have been done because of
3:57
this new interpretation that has
3:59
recently been floated by the Trump
4:01
administration. So going forward, at
4:03
least at the moment, it looks like under
4:05
this new guidance, federal employees who
4:07
are furoughed
4:09
um may not be able to rely on automatic
4:12
back pay after a shutdown. Each shutdown
4:15
would presumably require Congress to
4:17
affirmatively authorize it. This is
4:21
essentially a shift back to before the
4:24
law was passed in 2019, back to the way
4:27
it used to work. Congress would have to
4:30
authorize whether or not federal
4:32
employees would get paid
4:34
retroactive pay in the event of a
4:36
shutdown. They always did, but there was
4:38
just nothing in law cottifying it to
4:40
make it automatic until 2019.
4:44
And again, now the Trump administration
4:46
seems to be pushing back on that. As I
4:48
said in the last two shutdowns, Congress
4:50
did put explicit language in to the um
4:54
to the the legislation bringing about an
4:57
end to the shutdown. If they were to not
4:59
do that in the future, and OPM still has
5:01
this guidance in place, my guess is what
5:05
would happen is the courts would have to
5:06
get involved and decide does the law
5:09
really guarantee automatic back pay or
5:12
or is OPM right? I mean, they'd probably
5:14
have to resolve the dispute at that
5:16
point. That's just a guess.
5:18
But um it potentially creates
5:21
more financial risk for federal
5:24
employees who are furoughed in the event
5:25
of a government shutdown. Obviously
5:27
there's already some financial risk. If
5:30
the shutdown goes for a long time that's
5:32
disruptive to federal employees whether
5:35
you're working or furoughed you're not
5:36
getting paid for a while. You don't get
5:38
paid obviously until the shutdown
5:41
concludes. And if that goes on for 40
5:44
days or more, like the the one back in
5:46
the fall did, that can be disruptive.
5:49
So, it's always good to prepare
5:51
financially, have an emergency fund, um
5:55
have a budget to make sure that you're
5:58
not spending money unnecessarily in the
6:00
event of a shutdown, things like that.
6:02
Those are things that a financial
6:04
advisor could certainly help you with
6:06
devising a plan for what's best for you
6:08
and your family's needs just to be
6:10
prepared for life's emergencies, whether
6:12
it's a shutdown or a car breaking down,
6:14
that type of thing. I've written an
6:16
article on this subject that goes into a
6:18
lot more detail. I'll leave a link to
6:19
that in the description, but I did want
6:22
to provide you with at least a highle
6:24
overview of the situation. So, I hope
6:27
that's helpful. Thank you for watching
6:28
today and we'll see you next time.
#Government