The shutdown divided employees into several main categories regarding their pay:
“Exempt” employees work in functions that were not affected by the shutdown, typically because those operations are self-funding or have multi-year budgets. Those employees, most numerously in the U.S. Postal Service, have been receiving regular pay and benefits.
“Excepted” employees were kept on the job because of the nature of their work — for example, positions related to national security or public health or safety. They have been in duty status, but unpaid —although those working at the Defense Department have been paid, under the Pay Our Military Act, which passed soon after the shutdown started Oct. 1. All excepted employees have been guaranteed all along that they would receive back pay for their unpaid working time, but that couldn’t happen until government funding is restored.
“Furloughed” employees also have been unpaid during the shutdown but they were kept off the job and there has been no guarantee they would receive back pay for that time. The retroactive pay provision is needed for them.
Q. When will employees get the back pay?
A. That’s uncertain; the bill calls for distributing the back pay “as soon as practicable.” Employees might do well to brace themselves to wait. Sorting all this out could be a nightmare for payroll administrators.
Agencies use different payroll providers, which make payments on differing days of the week. Those providers typically need about four days to prepare a change. That seemingly would rule out agencies where a pay distribution is being made on Thursday; employees of those agencies likely would have to wait until the payout two weeks later.
The largest payroll provider, the Defense Finance and Accounting Service, will make its next distribution Oct. 25, while employees of a number of other agencies will next be paid Oct. 29.
Another complication is that payouts cover differing two-week pay cycles. The most commonly used biweekly period ends Saturday.
Q. What’s happening with health insurance coverage?
A. During the shutdown, coverage under the Federal Employees Health Benefits Program has continued, even if neither the government nor the enrollee was able to pay the premiums. Any unpaid enrollee share of premiums accumulates and is “withheld from pay upon return to pay status,” according to the Office of Personnel Management.
Q. Will the shutdown have an impact on future retirement benefits for current employees?
A. Retirement benefits are based on the employee’s years of service and highest three consecutive salary years. Neither is affected unless the employee is in non-pay status for more than six months in a calendar year.
Q. What about the Thrift Savings Plan?
A. The TSP’s government securities fund has been used as a bridge in the debt ceiling crisis; the government effectively took that debt off its books by no longer issuing the special securities that make up the fund. After the debt limit is raised, those securities are reconstructed. There is no impact on a participant due to this “disinvestment.”
Employees who were not on regular pay status during the shutdown also have had their ongoing TSP investments reduced, if they invest on a percentage of salary basis; investments are unchanged for those who invest on a dollar amount basis, if their salary was sufficient. Agency contributions for those in the Federal Employees Retirement System also were reduced — automatic contributions are based on salary actually received, while matching contributions are based on the amount the employee invests.
The missed employee investments and agency contributions will be made up when employees receive back pay but there would be no retroactive makeup of any earnings, TSP spokeswoman Kim Weaver said.
Q. How about leave benefits?
A. Many furloughed employees crossed 10 days in unpaid, non-duty status for the year during the shutdown. They will not be credited with either annual leave or sick leave they would have earned for the pay period in which that happened.
OPM has been non-committal about that leave being credited after employees get back pay, although the Pentagon has told its employees the leave would be restored.
Days associated with a furlough will not count against an employee’s leave entitlements, including the right to unpaid leave under the Family and Medical Leave Act.
Q. Will employees who have filed for unemployment compensation still get those benefits?
A. According to the Labor Department, “If Congress passes legislation that retroactively provides for the payment of salary, states will generally require repayment of any unemployment benefits received. States will advise affected claimants if benefits are overpaid and if so, provide repayment options.”
Many individuals who have applied likely would not receive benefits for several more weeks, it adds. That’s because many states require individuals to serve a waiting week and most issue payments to eligible individuals within 14-21 days after the claim is approved.