01.28.19

U.S. Senator Tammy Baldwin Supports Back Pay Fairness Act to Reimburse Federal Workers — with Interest

WASHINGTON, D.C. – U.S. Senator Tammy Baldwin today called for a Senate vote on the Back Pay Fairness Act, legislation she has cosponsored that would require federal workers who were impacted by the shutdown to receive their full back-pay plus any interest accrued.

“Today, 800,000 workers nationwide and nearly 3,000 workers in Wisconsin are back at work and they will soon get their paychecks, but our work is not done for these workers who haven’t been paid in over a month,” said Senator Baldwin. “It’s only fair that if the federal government can charge you interest for being late on your taxes, then it should be paying interest on late paychecks. I am calling on Senate Majority Leader McConnell to bring this bill to the floor for a vote.”

Earlier this month, Congress passed bipartisan legislation Senator Baldwin cosponsored, 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 this is 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.

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 Back Pay Fairness Act, introduced by Senator Doug Jones (D-AL), 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.

“Federal workers are experiencing serious financial hardship from the shutdown,” said American Federation of Government Employees’ National President J. David Cox, Sr. “When it ends, employees will not only have to pay more than a month’s worth of overdue bills, but they will also have to pay late fees and penalties, overdraft fees and interest charges. AFGE thanks Senator Jones for introducing the "Backpay Fairness Act" to help federal employees recover financially when the shutdown ends.”

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