January 27, 2020

January 27, 2020

Subscribe to Latest Legal News and Analysis

Recovering After the Shutdown: Proposed Legislation to Guarantee Back Pay for Government Contractors

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.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.

TRENDING LEGAL ANALYSIS


About this Author

Townsend Bourne, Government Affairs Attorney, Sheppard Mullin Law FIrm
Associate

Ms. Bourne's practice focuses on Government Contracts law and litigation. Her experience includes complex litigation in connection with the False Claims Act, bid protest actions both challenging and defending agency decisions on contract awards before the Government Accountability Office and Court of Federal Claims, claims litigation before the Armed Services Board of Contract Appeals and the Civilian Board of Contract Appeals, investigating and preparing contractor claims, and conducting internal investigations. 

Ms. Bourne advises clients on a...

202-469-4917
Jenna Mennona, Sheppard Mullin Law Firm, Washington DC, Labor and Employment Law Attorney
Associate

Jenna Mennona is an associate in the Labor and Employment Practice Group in the firm's Washington, D.C. office.

Areas of Practice

Ms. Mennona’s practice focuses primarily on defending management in employment matters, including discrimination and harassment claims under Title VII, disability claims, and other employment related matters brought before state and federal agencies and courts.

Ms. Mennona also counsels and advises employers on a wide range of day-to-day employment law issues, including establishing effective human resource policies and complying with federal and state laws, such as those relating to equal employment opportunity, disability and family/medical leave laws, and the discipline and termination processes.

202-747-2309