As the federal government reopens after the prolonged shutdown, agencies are now working through the major steps required to restore operations and to ensure federal employees receive the pay and benefits they are owed.
Full Back Pay Moving Forward, With Adjustments Coming
Agencies have begun processing full retroactive pay for the roughly 1.4 million federal employees who missed paychecks during the lapse in funding. Both furloughed and excepted employees will be paid at their standard rate of pay:
- Excepted employees who continued working will receive their full pay for actual hours worked, including overtime, night pay, and other premiums.
- Furloughed employees will be paid for the hours they would have worked had the shutdown not occurred.
This retroactive pay effectively places employees back into pay status for the entire shutdown period. While agencies are pushing payments out quickly, some payroll corrections, especially involving overtime, premium pay, or unique schedules, may require follow-up adjustments.
Employees who applied for state unemployment benefits should be aware that states may require repayment once retroactive federal pay is received.
Leave Accruals Restored, Use-or-Lose Rules Still Apply
Because shutdown time is now treated as paid time, annual and sick leave accruals will be restored for both furloughed and excepted employees. Agencies must correct leave records to reflect:
- Full annual and sick leave accrual for the entire shutdown period
- Restoration of any leave that was advanced or charged in error during the lapse
- Proper crediting of leave for excepted employees who worked without pay
The November 29 annual “use-or-lose” leave scheduling deadline still stands. Employees must have excess annual leave scheduled by then to be eligible for restoration, even if the shutdown disrupted plans to use that leave.
Separation-related payments, such as severance, VSIP buyouts, and lump-sum payments for unused annual leave, will also resume now that agencies have regained funding authority.
Open Season & Benefits: Coverage Continues, But Deadlines Mostly Unchanged
OPM has clarified that federal benefits programs continued uninterrupted through the shutdown. Employees remained covered under:
- FEHB health insurance
- FEDVIP dental and vision
- FEGLI life insurance
- FLTCIP long-term care insurance
- FSAFEDS flexible spending accounts
Premiums that could not be withheld while employees were in unpaid status will simply be reconciled in upcoming paychecks or, in some cases, spread across future pay periods.
Importantly, Open Season is not being extended. Although the shutdown overlapped with the early days of the annual enrollment window, OPM has indicated that standard deadlines remain in place. That said, agencies may accept belated enrollment elections from employees who were genuinely unable to make changes due to the shutdown.
With the government reopened, agencies are acting to make federal employees financially whole, restore leave balances, and clarify benefit rules.
