Pay is no guarantee for furloughed employees

In the event of a government shutdown, lawmakers have the final say over retroactive compensation.

If Congress and the Obama administration fail to reach an agreement on the continuing resolution by March 4 and the government shuts down, then federal employees who are furloughed might not be compensated for the loss in pay.

The last time the government shut down in 1995 and 1996, for 27 days at an overall cost of $1.4 billion, furloughed federal employees were paid retroactively for the time they were off the job. But it's up to Congress to decide whether to reimburse employees for the time lost, and lawmakers might not be disposed to do so during the current fiscal climate.

"They can always decide they are not going to do it," said John Palguta, vice president of policy at the nonprofit Partnership for Public Service, and a federal employee at the Merit Systems Protection Board during the mid-1990s shutdown. Lawmakers still are on the federal payroll during a shutdown; other employees not subject to furlough include the president, presidential appointees, certain legislative branch staff and "essential" federal workers. Most essential employees perform jobs in defense, health care or other areas of national security and/or emergency-related fields, and while they are paid, their paychecks could be delayed during a hiatus.

"Overall, nothing good happens to the [federal] employee during a shutdown unless you are deemed essential," Palguta said. "Shutdowns are a bad way to run government, obviously."

The decision to pay employees retroactively also affects their Thrift Savings Plan accounts. If workers are compensated for the loss in pay, then their designated contribution and the matching amount from the government goes through as if the furlough didn't happen, according to Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board. "When the hiatus was over and funds began flowing again, amounts which each employee had elected to defer into the TSP simply flowed from their pay into their accounts based on their standing contribution elections," he said, referring to the 1995 shutdown. But if lawmakers choose not to reimburse feds, then TSP accounts will take a hit for that period of time. The board itself remains open for business in the event of a furlough, since it is not funded through federal appropriations.

For furloughed employees who live paycheck to paycheck, there is little recourse, Palguta said. "There is nothing officially that the government can provide," he noted. Depending on how long the furlough lasted, some employees would be able to apply for unemployment compensation, and there are a few nonprofits groups that could provide assistance, such as the Federal Employee Education and Assistance Fund, a charity that is part of the Combined Federal Campaign.

Agencies are required through Office of Management and Budget Circular A-11 to develop plans for a government hiatus, and include information such as the time it will take to complete the shutdown and the number of essential employees they plan to retain. OMB, the Justice Department and the Office of Personnel Management are supposed to provide agencies with guidance; agencies in turn must inform employees of an impending shutdown and their specific status in advance.

OMB and OPM have been reluctant to discuss publicly the possibility of a shutdown and furloughs, but Palguta said he believes there is planning happening behind the scenes. "I can tell you at the agency level that the chief human capital officers are at least dusting off the playbook," he said. "You don't wait until you get the word."

In fact, Social Security Administrator Michael Astrue has acknowledged his agency is preparing for a potential shutdown. Defining who is essential and who isn't often becomes the central question for agencies -- and the one that most affects who receives a paycheck.

During a December 1995 review of the previous month's government shutdown, then-Rep. Stephen Horn, R-Calif., said a lack of coordination among agencies created confusion and resulted in a patchwork of operations: "Agencies were left to their own devices, some making decisions to keep employees working if they were paid out of multiyear or no year appropriations, some retaining only those employees involved in protecting life or property. Some departments shutting down almost completely, some remaining fully staffed."

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