The House on Saturday unanimously passed a bill to pay all federal employees retroactively for the government-shutdown period, however long it might last.
If the Senate approves that legislation, hundreds of thousands of public servants will be compensated for time they were forced off the job during the funding lapse.
But what about the army of contractors who provide a long list of services for the government ranging from safeguarding computer networks to building military machines?
A number of factors affect whether private-sector workers remain on the job during a shutdown, including whether they support “essential” government functions and whether their duties are funded through past appropriations or scheduled for payment with future funding bills.
The House legislation does not authorize back pay for contractors, meaning firms must decide for themselves whether to provide compensation for personnel affected by the shutdown. Most will either pay the workers, let them take paid leave or place them on furlough, according to industry experts.
Connie N. Bertram, a partner at Proskauer Rose who specializes in labor and government contracting issues, said private-sector employees who go unpaid aren’t likely to be compensated when the shutdown ends. “In most instances, [the firms] will not, because they’re only paid for the hours the employees work,” she said.
Put another way, businesses cannot bill the government for hours they didn’t work — even though federal employees would be able to do so under the House bill.
Stan Soloway, president of the Professional Services Council, said large firms are better suited to keep employees on their payrolls during work stoppages, but he added that such moves can only last a few weeks in most cases.
“The smaller the company, the more difficult it is,” Soloway said. “Absent revenue, it almost doesn’t matter the size of a company at a certain point.”
It is unclear how many private-sector employees could be affected by the lapse in congressional appropriations, but the federal government spent about $518 billion on contracting in 2012. To put that in context, the amount has nearly doubled since the mid-1990s after adjusting for inflation, according to federal procurement data.
President Obama signed a bill last week that requires the Defense Department to continue paying civilian personnel and contractors who give “support for members of the armed forces.” The Pentagon has interpreted that rule loosely, ordering nearly all of its 350,000 civilian employees back to work on Saturday.
That’s a positive sign for defense contractors, many of whom may be kept on the job and compensated on time under the military-pay bill.
Bertram said she’s seeing more agencies, particularly the Pentagon, bringing back their contractors after determining their work is essential. Contractors who support non-defense agencies are less likely to be so fortunate.
(Correction: A previous version of this article incorrectly identified Stan Soloway as president of the Partnership for Public Service instead of the Professional Services Council).
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