Federal Furlough: What News About Furlough Holds?

What is a Federal Furlough?

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A federal furlough is a temporary, unpaid leave of absence for government employees. It typically occurs during a government shutdown when there is a lapse in appropriations, meaning certain agencies do not receive the funding needed to operate. During this time, affected employees are instructed not to work and do not receive pay until the shutdown ends.

Key Details

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Definition:

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A furlough is a required, temporary suspension from work without pay for federal employees.

When It Happens:

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Furloughs usually take place during a government shutdown. This occurs when Congress does not pass appropriations bills on time, leading to a funding gap for some federal agencies.

Who It Affects:

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Employees whose roles are supported by annual appropriations are generally subject to furlough during a shutdown.

What Happens During a Furlough:

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Furloughed employees are told not to report to work and are not paid during the furlough period.

However, under the Government Employee Fair Treatment Act of 2019, they are guaranteed back pay once the shutdown concludes.

Health insurance coverage typically continues, though retirement plan contributions are paused.

Exceptions:

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Some federal employees are classified as “excepted” and are required to continue working during a shutdown. These employees are paid for their work, even during the furlough period.

Operational Planning

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Contingency Plans:

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Federal agencies must maintain contingency plans that explain how operations will be impacted during a shutdown. These plans detail which activities will continue, which will pause, and how many employees will be furloughed.

OPM Guidance:

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The Office of Personnel Management (OPM) issues specific guidance on furlough-related topics, such as employee notifications, leave usage, and ethical conduct during a shutdown.

Support and Benefits

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FEEA Assistance:

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The Federal Employee Education and Assistance Fund (FEEA) offers emergency aid, including no-interest loans, to federal employees facing hardship during furloughs. However, loan support has been temporarily suspended due to overwhelming demand.

Unemployment Compensation:

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Furloughed federal workers may qualify for Unemployment Compensation for Federal Employees (UCFE) benefits, depending on state-specific eligibility rules.

Reductions in Force (RIF):

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If a furlough lasts for 31 or more continuous calendar days, or 23 or more non-continuous workdays, agencies are required to follow official Reductions in Force (RIF) procedures.

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With ongoing efforts to reduce national debt, federal retirement plans—like the Thrift Savings Plan (TSP) and pensions—are under increased scrutiny. While budget reforms are necessary, they bring uncertainty for federal employees planning their financial future.

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Furlough vs. Buyout vs. Shutdown

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• Furlough: A temporary leave of absence from work, typically unpaid, due to budget issues or a government shutdown. During a furlough, employees do not work but remain employed. Recent news about furlough has highlighted the economic and personal challenges it causes for federal workers.
• Buyout: A voluntary program where employees are offered financial incentives to leave their positions earlier than planned. This can help reduce the workforce without requiring layoffs and is typically used as a tool for downsizing.
• Shutdown: This occurs when the government fails to pass a budget or funding bill, leading to a halt in nonessential government operations. During a furlough government shutdown, nonessential services stop, and federal employees are sent home without pay until the government is funded again.

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Government on Furlough 2025 Update

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The U.S. government shutdown would halt nonessential services and furlough workers. Fueled by political gridlock, this would delay paychecks and leave federal employees uncertain about their jobs and retirement security—

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• Political Stalemates: Divergent priorities between political parties can lead to disagreements over budget allocations, resulting in funding lapses.
• Fiscal Conservatism: A faction of lawmakers, alarmed by the escalating national debt, may withhold support for budget bills, pushing the government toward a shutdown.
• Policy Disputes: Contentious issues, such as healthcare funding or immigration policies, can become sticking points in budget negotiations, leading to stalemates.

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Also read - Federal Government Early Retirement Buyout 2025

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OPM Furlough Guidance

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The U.S. Office of Personnel Management (OPM) provides human resources guidance for federal agencies and employees in the event of a furlough. There are two main types of furloughs:

1. Administrative Furlough

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An administrative furlough is a planned action by an agency, typically used to manage budget constraints unrelated to a government shutdown. These furloughs may result from downsizing, reduced funding, lack of work, or other budget issues that do not involve a lapse in appropriations. Furloughs caused by sequestration, for example, are generally classified as administrative.

2. Shutdown Furlough (Emergency Furlough)

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A shutdown furlough occurs due to a lapse in appropriations. This type of furlough can happen at the start of a fiscal year if no funding has been approved, or when a continuing resolution expires without a new one in place. During a shutdown furlough, agencies must halt operations for any activities funded by annual appropriations—unless those activities are legally exempt or deemed essential.

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10 Key Things to Know During a Federal Government Furlough

1. You’ll Get Paid Eventually

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Thanks to the Government Employee Fair Treatment Act of 2019, you’re guaranteed back pay after the shutdown ends—even if you were furloughed.

2. You’re Not Allowed to Work Voluntarily

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Federal law (the Antideficiency Act) prohibits non-excepted employees from performing any work during a shutdown. That includes unpaid work—volunteering isn’t allowed.

3. You Can’t Use Annual Leave or Paid Time Off

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Leave—including previously approved vacation—cannot be used during a furlough. The law doesn’t allow paid time off if no funds have been appropriated.

4. Your Health Insurance Continues

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Your coverage under the Federal Employees Health Benefits (FEHB) program will remain active. Premiums that aren’t paid during the furlough will be deducted from your paycheck once you return to work.

5. Retirement Contributions Are Paused

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While furloughed, your Thrift Savings Plan (TSP) contributions, along with your agency’s matching contributions, will stop temporarily. These will resume—and be made up—when funding is restored.

6. Your Retirement Eligibility Stays Intact

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A short-term furlough won’t affect your creditable service time for retirement. You can have up to six months of leave without pay in a calendar year without it impacting your retirement status.

7. No Use of Government Devices

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You shouldn’t use your government-issued laptop, phone, or email—except to occasionally check for official updates on your furlough or recall status. Performing any job-related tasks is prohibited during a furlough.

8. You Might Qualify for Unemployment

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Depending on your state’s rules, you may be eligible for unemployment benefits during the furlough. Be sure to check your state’s specific requirements and application process.

9. Be Cautious About Taking Another Job

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You’re still a federal employee even while furloughed, which means ethics rules and policies on outside employment still apply. Check with your agency’s ethics office before accepting another job.

10. You Can Advocate for an End to the Shutdown

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You have the right to contact your members of Congress and express your concerns about the shutdown. Calling or sending an email is permitted and can help push for a resolution.

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Adaptation Drives Financial Success!

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Government shutdowns and policy reforms create uncertainty for federal employees, especially when it comes to retirement and financial planning. Without the right strategy, benefits like the Thrift Savings Plan (TSP), 403(b), and pension options may not be optimized for long-term security. In light of news about furlough, these uncertainties only grow as employees face disruptions in income and benefits. That’s where Federal Pension Advisors come in.

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From personalized retirement planning and investment strategies to maximizing federal benefits, our experts help you navigate the complexities of your financial future.

Take control of your retirement with solutions designed to protect what you have worked for!

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