Furloughed federal workers face threat of no back pay from shutdown, despite 2019 law requiring it

Government shutdowns have historically been an precarious time for federal workers, both for those required to remain on the job without pay and those furloughed. This shutdown comes with added financial uncertainty.

A draft memo from the White House, first reported by Axios and confirmed to NBC News by the White House, suggests not all federal workers on furlough are entitled to receive back pay once the government reopens. Asked about back pay, President Donald Trump said on Tuesday, “I would say it depends on who we’re talking about.”

“It really depends on who you’re talking about,” Trump said. “But for the most part, we’re going to take care of our people. There are some people that really don’t deserve to be taken care of, and we’ll take care of them in a different way.”

Trump has also threatened mass firings, if Democrats won’t agree to the GOP funding proposal.

The memo runs counter to a federal law that requires back pay for federal workers after a shutdown ends, and to recent guidance from the Trump administration.

Congress passed the Government Employee Fair Treatment Act of 2019, and Trump signed it, after the last government shutdown, which lasted for a record 35 days.

“Each employee of the United States Government or of a District of Columbia public employer furloughed as a result of a covered lapse in appropriations shall be paid for the period of the lapse in appropriations,” according to the law.

In prior shutdowns, Congress would pass a bill to provide federal workers with back pay.

The American Federation of Government Employees, the largest union of federal workers, called the administration’s argument “frivolous” and “an obvious misinterpretation of the law.”

“It is also inconsistent with the Trump administration’s own guidance from mere days ago, which clearly and correctly states that furloughed employees will receive retroactive pay for the time they were out of work as quickly as possible once the shutdown is over,” Everett Kelley, the national president of AFGE, said in a statement.

The Office of Personnel Management, the government’s equivalent of a human resources department, issued guidance dated September 2025 stating that retroactive pay will be available for federal employees affected by a lapse in appropriations “as soon as possible after the lapse in appropriations ends.”

“The federal government’s threat not to pay furloughed federal employees is both alarming and legally questionable,” said Tom Spiggle, a labor and employment attorney and founder of the Spiggle Law Firm in Washington, D.C.

If the administration does not provide back pay, workers may have other legal options, he said, including bringing a case under the Fair Labor Standards Act. They could also appeal through the Merit Systems Protection Board, an independent agency charged with protecting federal employees. A class action lawsuit may also be an option.

“Federal employees should document their losses and preserve records of any communications or threats related to pay,” Spiggle said. Those legal avenues for recourse can take months, if not years, to resolve.

If you’re missing paychecks, here are some strategies to cope with delayed or lost income. 

Start with a vigorous accounting of expenses: “Three things you really need to focus on … cash flow, cash flow and cash flow,” said Mary Clements Evans, a certified financial planner and owner of Evans Wealth Strategies in Emmaus, Pennsylvania.

Many people don’t have an understanding of their monthly expenses beyond the large essentials such as rent or mortgage and car payments, she said. Automatic payments and debit or credit card swipes can also make it harder to gauge discretionary spending. 

“We’re in a world where we’re disconnected from our spending habits,” Evans said.

Once you have a handle on expenses, plan for reduced income. This may mean determining which savings to tap and adjusting your budget.

“It sounds like that’s a financial equation, but it’s not. It’s often emotional and psychological, because they feel they’re losing their identity and their status,” said Evans, who is also the author of “Emotionally Invested.”

Reach out to your lenders. Financial institutions may offer payment deferrals, loan modifications and other forms of hardship assistance. For example, Navy Federal Credit Union is offering a Paycheck Assistance Program with zero-interest loans for eligible members affected by the shutdown.

The Trump administration’s plan for a “reduction in force,” or RIF, is unique to this shutdown.

“It’s obviously a changing time in terms of the willingness of this administration to take novel views of what has previously been considered, and is from a plain reading, considered clear law,” said John Hatton, staff vice president for policy and programs at the National Active and Retired Federal Employees Association.

During a shutdown, a majority of employees at government agencies funded through the annual appropriations process are typically put on furlough, or unpaid leave, if the agency hasn’t received funding. Those whose work is necessary to protect life or property, or to deliver mandated benefits, are considered essential and required to work, according to the Office of Personnel Management. 

“This is always a difficult situation for federal employees,” Hatton said, “whether they’re working or furloughed or now, adding this new option of receiving a RIF notice, for possible permanent loss of their employment.”

Two federal employee unions, AFGE and the American Federation of State, County and Municipal Employees, have filed a lawsuit to keep the Trump administration from moving forward with RIFs during the shutdown, calling the threat of RIFs unlawful.

There are legal requirements for an RIF: Agencies must provide justification for the layoffs, give written notice to employees 60 days before a layoff and offer an appeals process. During a shutdown, only “essential” functions are supposed to be carried out, and experts say it’s uncertain if carrying out mass layoffs would fit that definition.

To prepare for a possible layoff, federal employees should research unemployment benefits and determine when their health coverage might end.

Research health insurance costs, too. Workers may be able to extend their federal workplace plan for up to 18 months through the Temporary Continuation of Coverage option — but they still must shoulder the full cost of premiums.

For now, a more affordable option could be marketplace coverage under the Affordable Care Act.

“You can go and you can get insurance through them, and that is based on your income,” Evans said.

However, the enhanced subsidies that have kept premiums low are set to expire at the end of the year, unless Congress acts.

The subsidies are a key sticking point in the current government funding debate. Democrats say they want to extend them as part of the current budget negotiations, while Republicans say they want to debate the policy only after averting a shutdown.

SIGN UP: Money 101 is an 8-week learning course on financial freedom, delivered weekly to your inbox. Sign up here. It is also available in Spanish.