After 35 days of the government shutdown, one of the (many) issues currently facing companies who contract with government agencies affected by the shutdown is if, when, and how, they must pay their employees upon the reopening of the government.

Background

Backpay for furloughed federal government workers when the government reopens is guaranteed thanks to a recent bill signed by President Trump. However, for furloughed government contractors, there is no such promise. One of the major obstacles to providing this same benefit to contractors is the fact that government contractors are not paid in a uniform time or manner, as different government agencies contract with private companies in different ways. Thus, guaranteeing any backpay for these workers is quite complex.

Proposed Legislation

On January 16, 2019, Senate Democrats, led by Senator Tina Smith of Minnesota, introduced legislation which would guarantee back-pay for certain government contractors. The “Fair Compensation for Low-Wage Contractor Employees Act” would apply to contractors covered by the Service Contract Act (which governs federal service projects) and the Davis-Bacon Act (which governs federally-funded construction projects). The legislation guarantees up to $965 per week in back pay to contractors who have been furloughed, laid off, or experienced a reduction of hours or compensation due to the shutdown. The legislation would also restore any leave that contractors were forced to use during the shutdown.

According to Senator Smith: “This bill is about helping a group of people who are often invisible—people who work in the cafeterias, who clean offices after everyone else goes home, security guards who keep our buildings safe overnight…These low- and mid-wage federal contract workers have had to go without pay for weeks now, and in past shutdowns, haven’t received back pay.”

Next Steps

The bill was introduced to the Senate and has now been referred to the Committee on Homeland Security and Governmental Affairs. If the Senate passes the bill, it will move onto the House of Representatives for review. We will continue to monitor the status of this proposed legislation.