Benefits and Compensation

Pay Implications of Government Shutdowns

With government shutdowns periodically looming, hundreds of thousands of federal employees face losing work time and pay. When Congress fails to appropriate funds during the budget process, nonessential federal programs and agencies close and many workers are furloughed. In such a situation, there are a number of different pay scenarios and categories of employees.


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Excepted Employees

Many federal workers deemed essential, including the military, will have to continue working through a government shutdown. “Excepted” employees are those whose salaries are funded by annual appropriations, but the employees are considered essential so they continue to work through the shutdown.

According to the U.S. Office of Personnel Management (OPM), excepted employees “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.” These employees, in many cases, won’t receive any pay, they will receive only partial pay, or they will receive their paychecks late.

Nonexcepted Employees

Nonexcepted employees whose salaries are funded by annual appropriations can be furloughed without pay. Their work is considered nonessential. In some cases, employees who don’t receive any notice of a shutdown are forced to show up for work, only to find that they are being sent home without work. Whether they will receive backpay after the shutdown ends, is yet to be seen when the furlough occurs.

Often these employees live paycheck to paycheck. The government shutdown can cause financial havoc in their personal lives when they suddenly do not receive their paycheck. During the furlough, these federal employees may apply for state unemployment compensation benefits, but many states require a 1-week waiting period on benefits and if the employees are compensated retroactively after the shutdown ends, they would have to pay back the unemployment compensation payments received.

Exempted Employees

A third category of employees, “exempted” employees, are considered essential, but their compensation does not derive from annual appropriations and will therefore not be affected by the shutdown.

Congressional Protection of Workers’ Pay

It is up to Congress to pass legislation authorizing retroactive pay for those who work through a government shutdown. Therefore, any employees who go without complete pay during a shutdown, may receive backpay once the shutdown is over.

In 2013, when over 800,000 federal employees were furloughed during a 16-day shutdown, they received backpay after the shutdown ended. Congress was sure to protect these workers when they included a provision requiring backpay in the spending bill that marked the end of the shutdown.

Congress often introduces legislation which would require backpay for a shutdown to protect the government workers going without pay. The temporary furlough may cause immediate financial strain on the federal workers and their families, but backpay can help to alleviate that stress once the government shutdown ends and employees are back to work.

Susan PrinceSusan E. Prince, J.D., M.S.L., is a Legal Editor for BLR’s human resources and employment law publications. Ms. Prince has over 15 years of experience as an attorney and writer in the field of human resources and has published numerous articles on a variety of human resources and employment topics, including compensation, benefits, workers’ compensation, discrimination, work/life issues, termination, and military leave. Ms. Prince also served as an expert on several audio conferences discussing the 2004 changes to the federal regulations under the Fair Labor Standards Act. Before starting her career in publishing, Ms. Prince practiced law for several years in the insurance industry and served as president of a retail sales business. Ms. Prince received her law degree from Vermont Law School.

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