With the possibility of a partial government shutdown looming, here is some information on what this means for federal employees.

According to the Office of Personnel Management’s guidance on shutdown furloughs, there are three categories in which federal employees will fall in the event of a partial government shutdown: excepted, exempt, and neither excepted nor exempt.

Excepted employees are those whose work is funded through annual appropriations but who are not furloughed because they are performing tasks that, by law, are allowed to continue during a lapse in appropriations.

Exempt employees are exempted from furlough if they are not affected by a lapse in appropriations. This includes employees whose functions are not funded by annually appropriated funds. Employees performing those functions will generally continue to be governed by the normal pay, leave, and other civil service rules.

Federal employees who do not fit in either of those categories are not allowed to work during a government shutdown and will be furloughed. The only work they may be allowed to do is to perform minimal activities as necessary to execute an orderly suspension of agency operations related to non-excepted activities.

Each agency will determine the method and timing of notifying employees of whether their work has been determined to be excepted.

How Are Federal Employees Paid in the Event of a Government Shutdown?

The good news for federal employees is that they will be paid in the event of a partial shutdown regardless of whether or not they are furloughed. This is because of the Government Employee Fair Treatment Act of 2019 (S. 24), a 2019 law that requires federal employees who are furloughed or required to work during a lapse in appropriations resulting from a government shutdown to be compensated for the period of the lapse. Federal employees must be compensated on the earliest date possible after the shutdown ends.

This means that federal employees who are neither excepted nor exempt will still be furloughed during a shutdown and may potentially go without paychecks while their agencies are closed, so having an emergency fund would be wise from a financial planning standpoint to be prepared in case this happens, but the good news is that they will receive full back pay once the shutdown ends.

According to guidance from the Office of Personnel Management (OPM), federal employees who are furloughed during a shutdown will get paid at their “standard rate of pay” at the earliest date possible after the lapse in appropriations ends. The “standard rate of pay” is the pay the employee would have received for the furlough hours had the lapse in appropriations not occurred and had the employee performed work.

How the “Standard Rate of Pay” Is Computed for Furloughed Employees

• Definition: The standard rate equals the pay employees would have received had they worked during the lapse in appropriations.
• Basic Pay: Employees receive their regular basic pay for furlough hours as if they had been in pay status.
• No Leave Charged: Retroactive pay is provided without charging paid leave or other paid time off.
• Pay Status Credit: Furlough hours count as time in pay status for leave accrual, benefits, and within-grade increases.
• Premium Pay: Employees scheduled for overtime, night shifts, or other premium pay receive those payments retroactively. 
• Regular Add-Ons: Allowances and differentials (e.g., law enforcement availability pay) are paid as if work had occurred.
• FLSA Hours: All qualifying furlough hours are treated as “hours of work” under the Fair Labor Standards Act.
• Exceptions: No retroactive pay is given for hours previously scheduled as leave without pay (LWOP), suspension, or AWOL.

Excepted federal employees (those who must work during a shutdown), will receive their “standard rate of pay” after the shutdown ends for the actual hours that they worked, including any overtime or other premium pay, allowances, and differentials earned based on actual hours worked.

Anytime that excepted federal employees are placed in a furlough status, they will be compensated under the rules for furloughed employees.

Both furloughed and excepted employees will be paid after the lapse in appropriations ends.

Federal employees with questions about their pay in the event of a partial government shutdown should consult with their human resources office for assistance.

Annual and Sick Leave in a Government Shutdown

OPM states that any leave that federal employees previously had scheduled during the period of the lapse in appropriations is canceled, so they will not be charged leave in those cases.

If a federal employee had properly scheduled “use-or-lose” annual leave that he or she was not able to use because of the lapse in appropriations, that leave must be restored. The employee’s agency will provide instructions for any action that the employee may need to take in this situation.

Both furloughed and excepted federal employees will receive credit for any annual and sick leave they would have otherwise accrued during the period of the government shutdown once Congress restores appropriations.

Excepted employees may request approval to use paid leave during a shutdown, but OPM notes that this is generally not expected. Instead, it makes more sense for agencies to place excepted employees in furlough status during approved absences, since they are entitled to retroactive pay without being charged leave.

Agencies may also use workplace flexibilities to accommodate off-duty time. If paid leave is requested under 31 U.S.C. 1341(c)(3), it must follow normal leave approval procedures, and payment will still be delayed until after the lapse ends. Unauthorized absences during a shutdown may result in AWOL status, which is not eligible for retroactive pay.

Federal employees with specific questions about their leave situations in the event of a partial government shutdown should contact their HR office for assistance.

FEHB and FEDVIP During a Shutdown

Federal employees furloughed during a shutdown will maintain their coverage under both the Federal Employees Health Benefits Program (FEHB) and Federal Employees Dental and Vision Insurance Program (FEDVIP). Any premiums that accrue during the shutdown will be taken out of the employees’ checks that are issued once the shutdown ends.

The same holds true for the Federal Employees’ Group Life Insurance (FEGLI) program and the Federal Long Term Care Insurance Program (FLTCIP).

dditionally, federal employees who are furloughed will be designated to be in pay status for purposes of enrolling or changing enrollment in the FEHB Program if they experience qualifying life events. They can also enroll or make changes during the annual Open Season.

The Office of Personnel Management published a rule in the Federal Register in 2021 which added some additional protections for federal employees’ health benefits in the event of a partial government shutdown.

What About the TSP?

The Thrift Savings Plan (TSP) is not impacted by a partial government shutdown. If one occurs, the TSP will continue its normal daily operations and TSP participants, including those with outstanding TSP loans, do not have to take any action. TSP loans will be kept in good standing in the event of a government shutdown. The TSP’s call center will remain open and all the usual transactions available to participants will still be available.