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Key developments in the world of federal employee benefits: health, pay, and much more.
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Lawmakers Renew Push for Contractor Back Pay, An Expansion of Veterans’ Benefits and More

A bipartisan group of lawmakers has not given up on providing back pay to federal contractors impacted by the 35-day partial government shutdown earlier this year, and hopes such a measure will be attached to an upcoming spending bill.

Senate appropriators are preparing a bill (S. 572) to provide $13.6 billion in disaster relief to states impacted by hurricanes Michael and Florence and last year’s California wildfires. In January, the House passed a similar bill (H.R. 268) that authorized $14.2 billion in disaster relief spending. That legislation, considered during the partial government shutdown, also attempted to reopen federal agencies, but failed in the Senate.

Last week, 38 senators, led by Sens. Chris Van Hollen, D-Md., and Susan Collins, R-Maine, urged Senate Appropriations Committee Chairman Richard Shelby, R-Ala., and ranking member Patrick Leahy, D-Vt., to add a provision to the disaster bill granting back pay to contractors who lost wages during the lapse in appropriations.

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“Contractor workers and their families should not be penalized for a government shutdown that they did nothing to cause,” lawmakers wrote. “While federal employees received back pay...

Treasury Suspends G Fund Investments, Retirement Programs Could Become More Generous, and More

Treasury Secretary Steve Mnuchin informed Congress this week that his department would cease its investment in two federal retirement programs as part of its extraordinary measures intended to delay running into the debt ceiling.

On Saturday, the federal government hit its borrowing limit, and last week Mnuchin informed Congress that he would be suspending the department’s issuance of State and Local Government Series securities. Mnuchin followed up Monday, sending Congress a letter informing lawmakers that he would suspend investments in the Civil Service Retirement and Disability Fund, as well as the Postal Service Retiree Health Benefits Fund.

And on Tuesday, the Treasury secretary informed House Speaker Nancy Pelosi that he would suspend investment in the Thrift Savings Plan’s G Fund, which is made up of government securities, to avoid breaching the debt ceiling. With these actions, and an influx in revenues when federal income taxes are due in April, officials believe the Treasury Department can continue to fund government operations “for several months” before Congress will need to act to raise the debt limit again. Lawmakers hope to do so when they pass appropriations bills to set spending for the 2020 fiscal year this fall.

Federal employees should...

The Longer-Term Effort to Compensate Feds for Shutdown-Related Damages

The federal government may have provided back pay to the more than 800,000 federal workers who either were furloughed or forced to work without pay during the 35-day partial government shutdown, but another effort to compensate employees impacted by the lapse in appropriations is ongoing, and could take years.

A dozen federal employees and labor groups have filed separate lawsuits against the federal government alleging violations of the Fair Labor Standards Act, which requires employers to pay employees promptly for the work that they perform. Among the groups aiding with the various lawsuits are the American Federation of Government Employees, the National Treasury Employees Union and the National Air Traffic Controllers Association.

Similar cases were filed following the 2013 government shutdown, which culminated in a class action lawsuit where, in 2017, a judge awarded financial damages to those who were forced to work during the lapse in appropriations. Employees were set to be awarded the federal minimum wage—$7.25 per hour—times the number of hours they worked between Oct. 1 and Oct. 5, 2013, the period in which paychecks were delayed.

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But...

Lawmakers Introduce Slew of Bills to Boost Federal Retirement Benefits

House lawmakers, led by Rep. Gerry Connolly, D-Va., introduced several of bills last week that would improve the retirement benefits earned by federal workers during their time in public service.

One piece of legislation, the Equal COLA Act (H.R. 1254) would increase the annual cost of living adjustment provided to retirees in the Federal Employees Retirement System to match the COLA given to Civil Service Retirement System retirees.

Under the current system, cost of living adjustments for federal employee retirement programs operate on two tiers. While the CSRS adjustment is based on the annual inflation of the Consumer Price Index for Urban Wage Earners and Clerical Workers, FERS adds an additional formula onto its COLA calculation, frequently reducing the amount that annuitants receive.

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If a cost of living adjustment for CSRS recipients is less than 2 percent, FERS retirees would receive the full amount. But if the COLA is between 2 and 3 percent, FERS annuitants would only receive 2 percent, and if the COLA is more than 3 percent, retirees in FERS would receive that COLA minus 1 percentage point.

In 2019, CSRS...

Lawmakers Investigate Back Pay Issues, New Post-Shutdown Clarification on Promotions, and More

House Democrats announced Wednesday that they would investigate reports of incomplete back pay to federal employees impacted by the 35-day partial government shutdown and problems related to a variety of deductions typically taken from employee paychecks.

Last week, federal workers and agencies responsible for payroll processing confirmed that thousands of Homeland Security Department employees had not yet received their first paycheck of the year, while workers at other agencies that were shuttered during the lapse in appropriations were still owed some of their back pay.

Additionally, the National Finance Center and Interior Business Center, two agencies that process payroll for hundreds of federal entities, had not taken out several normal payroll deductions, such as court-ordered child support, alimony payments, Thrift Savings Plan loan repayments and union dues.

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In a letter to Acting Office of Personnel Management Director Margaret Weichert and Office of Management and Budget Director and White House Chief of Staff Mick Mulvaney, House Oversight and Reform Committee Chairman Elijah Cummings, D-Md., Government Operations Subcommittee Chairman Gerry Connolly, D-Va., and Rep. Jennifer Wexton, D-Va., commended the effort to encourage agencies to “act promptly” to...