Bill Would Provide Shutdown Back Pay Plus Interest

Senator Doug Jones introduced last Thursday legislation that would require federal workers who were impacted by the shutdown to receive their full back-pay plus any interest accrued.

Congress passed the Government Employee Fair Treatment Act of 2019, which would require that all impacted federal employees receive compensation for wages lost during the government shutdown. While Jones believes this was an important step, the shutdown has forced many federal workers to incur additional costs associated with loans, late bill payments, and the other effects of missing paychecks.

“If the federal government can charge you interest for being late on your taxes, then it should be paying interest on late paychecks,” said Jones. “The more than 5,500 federal workers in Alabama didn’t ask for a shutdown and shouldn’t be punished for it. It’s only fair that the government pays them back with interest for putting them out of work indefinitely or forcing them to work without pay.” Jones also requested his paycheck be withheld until federal workers receive their back pay.

Jones said that federal law often recognizes the importance of timely payments when it benefits the government. For example, interest accrues on unpaid taxes from the due date of the return until the date of payment. When the federal government owes federal workers, it is only reasonable that interest accrues in this scenario as well. The interest rate in Senator Jones’ legislation would be equivalent to the rate that federal agencies must pay when it pays vendors late. This rate, known as the Treasury “Prompt Payment” rate, is currently 3.625 percent.

Original co-sponsors of Senator Jones’ legislation include Senators Tammy Baldwin (D-WI), Ben Cardin (D-MD), Mazie Hirono (D-HI), Chris Van Hollen (D-MD), Tim Kaine (D-VA), Amy Klobuchar (D-MN), Jeanne Shaheen (D-NH), Mark Warner (D-VA), and Ron Wyden (D-OR).