Double Furlough Trouble for Feds

A guide to how government shutdown and sequester furloughs are different.

Labor Day marks the traditional, if not official, end of summer. It also means a new fiscal year is less than a month away, and so is the threat of more furloughs for federal employees.

Congress for the last few years has lurched from one government funding deadline to another, and the federal workforce has lived under the shutdown shadow since 2011. Then in March 2013, automatic, across-the-board budget cuts took effect, forcing some agencies to place employees on unpaid leave.

This fall the circumstances are a little different because feds are facing the possibility of two types of furloughs simultaneously starting Oct. 1: furloughs related to sequestration, and those caused by a government shutdown because Congress has yet to pass any appropriations bills or a continuing resolution. And then there’s the mid-October deadline for raising the debt ceiling, which is a whole other story.

Yep, summer’s over alright. Don’t make any Columbus Day plans.

It’s not likely that the government will shutter in the next few weeks. Republican and Democratic leaders in both chambers are dead set against it, and lawmakers have to vote right after recess on whether the military should intervene in Syria. On the one hand, they have a lot to do in the nine legislative days between their return and the start of fiscal 2014, creating an anxiety-ridden situation for feds. On the other, shutting down the government and authorizing military strikes on a foreign government at the same time seems particularly unwise, even for this Congress.

Having said that, it’s worth looking at the differences between shutdown, or emergency furloughs due to a lapse in appropriations, and the administrative furloughs many feds already are familiar with through sequestration. The bottom line is, your pay is at risk but your benefits are well protected under both scenarios. For simplicity’s sake, this column will refer to administrative furloughs as sequestration furloughs.

  • Pay

    Sequestration Furlough: This is a little tricky. Federal pay under a statutory pay system -- the General Schedule, for example -- is subject to spending cuts as are other administrative expenses within budgets. But the rates of pay for individual civilian and military employees cannot be reduced under sequestration. In other words, if an agency has to find more savings within its administrative accounts, which include employees’ salaries, then it can resort to furloughs or layoffs. A furloughed employee isn’t paid and isn’t guaranteed back pay. But the agency can’t indiscriminately slash an employee’s rate of pay to save money. So if you aren’t furloughed, your pay is protected, but if you are furloughed, all bets are off. Layoffs are more expensive for agencies, so the odds are furloughs will be much more popular than reductions-in-force in the event of continued sequestration, though the Defense Department has said it likely will need to resort to RIFs for civilians in fiscal 2014 in that case. And don’t forget, a furlough of more than 30 calendar days, or of more than 22 discontinuous work days, is considered a RIF, according to the Office of Personnel Management.

    The Obama administration has announced that it plans to exempt military pay from sequestration in fiscal 2014, as it did in fiscal 2013.

    Shutdown Furlough: Employees furloughed during a government shutdown are not paid during their leave, but can be paid retroactively. Congress agreed to pay back employees affected by the partial government shutdown (Federal Aviation Administration) in 2011, as well as the full government shutdowns in 1995 and 1996. Lawmakers might not be inclined to reimburse employees for the time lost during the current fiscal climate if the government is forced to close on Oct. 1.

    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” or “excepted” 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.

    Performance awards and within-grade step increases for federal employees can be delayed under both sequestration and shutdown furloughs.

  • Health Benefits

    Sequestration Furlough: The health care coverage of furloughed federal employees will continue if the employee earns enough to pay the premiums. If the worker’s salary can’t cover the cost of the premiums, and the agency has applied all other deductions in order of precedence, then the agency has to give the employee the choice to continue or end coverage under the Federal Employees Health Benefits Program.

    Shutdown Furlough: The employee’s health coverage continues even if the agency doesn’t pay for its share of the premiums on time. “Since the employee will be in a non-pay status, the enrollee share of the FEHB premium will accumulate and be withheld from pay upon return to pay status,” stated 2011 guidance from OPM.

  • Leave

    Sequestration Furlough: Employees cannot substitute paid leave or other forms of paid time off for unpaid leave during an administrative furlough.

    Employees can take leave without pay under the Family and Medical Leave Act when other employees are on administrative furlough. But if an employee is placed on furlough during the time she was supposed to be on FMLA leave without pay, those hours or days will not be considered LWOP under FMLA. “Furlough hours will not count toward the employee’s 12-week FMLA leave entitlement,” stated June 2013 OPM guidance. 

    Shutdown FurloughEmployees cannot take paid leave or other forms of paid time off, even if it is previously scheduled, instead of going on unpaid leave during a shutdown-related furlough. As for FMLA, “no days associated with a shutdown furlough period will be counted against an employee’s 12-week FMLA leave entitlement,” according to OPM guidance.

  • Retirement Benefits

    Sequestration Furlough: Annuity benefits under the Civil Service Retirement System and Federal Employees Retirement System generally are not affected under administrative furloughs.

    Shutdown Furlough: Feds’ retirement benefits are protected under this scenario as well.

    The policies related to Thrift Savings Plan contributions are more nuanced, so check out the TSP Board’s guidance on nonpay status and TSP accounts here and specific guidance related to the fiscal 2013 sequester here.

Please remember that this is not an exhaustive list, just the highlights. Click on the links for OPM guidance on administrative furloughs and shutdown furloughs for more detailed information.