SEC Employees Worry as Federal Government Shutdown Looms


2/23/11:  If the House and Senate fail to reach a deal on the current continuing resolution by its expiration date of March 4, the federal government will shut down. SEC employees have expressed anxieties to the Union about how this could affect their compensation and benefits. A shutdown could result in a substantial loss in pay for SEC employees. It may also result in interruptions to employee benefits such as health insurance.

During a shutdown, only so-called "essential" federal employees may continue to work and be paid. "Essential" employees are typically involved with protecting life or property, or with national security. Based on a briefing that the Union received from the SEC this week, the number of such employees at the SEC who would meet this criteria would be very low, probably only about 100 to 250 employees overall nationwide. The rest would be furloughed for the duration of the shutdown and would receive no pay. In prior shutdowns, SEC employees received back pay for the period that the government was closed. The agency is not, however, required to provide such back pay.

Members of Congress, the president, and certain presidential appointees would be unaffected by a shutdown. They would continue to work and receive their pay while they continue to discuss the budget.

During the last federal government shutdown for 27 days in 1995 and 1996, the SEC was able to continue its operations by utilizing appropriated funds remaining from the previous fiscal year. Given current budget realities, it is unlikely that this would be the case this year.

It is true that even the House budget, with its $60 Billion in spending cuts, contains only a $25 million cut for the SEC's budget from current FY 2010 levels. Such a decrease in funding would be highly unlikely to result in an SEC employee furlough. However, this does not mean that a government shutdown could not cause you to lose pay -- even a substantial amount of pay.

 In the event of a shutdown, SEC employees would receive their paychecks on March 4 for the pay period ending this week. They would also receive a subsequent paycheck for their work on the week of February 28 through March 4. Thereafter, however, it is most likely that the vast lion's share of SEC employees would be furloughed and no further pay would be distributed until the shutdown is finally resolved. It is unclear at this time what the effect of a shutdown would be upon employee health insurance and other benefits. The Union has requested the SEC's position on this important question, but we have not received an answer.

At this time, it is an open question whether employees would receive retroactive pay for the time of the shutdown. After the 1995-1996 shutdown, which lasted for 27 days, Congress voted to provide retroactive compensation to federal employees for their time away from their jobs. There is no guaranty, however, that Congress would provide such retroactive compensation after a shutdown in 2011. Indeed, some members of the House of Representatives are already calling for across-the-board federal furloughs, so we may assume that there will be some in Congress who will not want to pay employees retroactively after a shut down.

We will keep you updated as further information becomes available. Thank you to all of the dues paying members of the Union, without whom NTEU would be unable to represent your interests in Washington during difficult times such as these.