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The civilian personnel within the Defense Department (DOD), approximately 791,000 employees, will be affected by the mandated automatic funding cuts known as sequestration. This is the across-the-board automatic funding cuts originally intended to start January 2, 2013 when the Joint Select Committee on Deficit Reductions failed to reach an agreement on how to trim Federal spending $1.2 Trillion. Congress delayed enactment until March 1, 2013. The DOD is required to reduce, cut or eliminate $42 Billion from March 1st to September 30th 2013, the end of the current fiscal year.
Furloughs and Civilian Pay
The civilian pay accounts are to be reduced by 8.5%, or 22 days of non-pay, for the entire 2013 fiscal year. If the civilian pay sequestration reductions had begun on January 2nd, there would have been 19 pay periods remaining in the fiscal year and the 22 days of furlough could have been spread out fairly smoothly. If the civilian pay cuts were to begin on March 1st, when other DOD programs begin sequestration, there would be 15 pay periods remaining in the fiscal year and the 22 days of furlough could be achieved with 1.5 non-pay days every two weeks.
20% Less Pay for Eleven Paychecks
However, the civilian 22 non-pay days of furloughs will not begin until the last week of April. At that point there will be 11 pay periods left in the fiscal year. That means the civilian population will need to be furloughed one day a week for 22 weeks for the remainder of the fiscal year. This means that the initially intended 8.8% reduction in an individual’s paycheck must be achieved during the last five months of the fiscal year. The net effects will be 11 paychecks with 20% less take home income.
In preparation for the impending finance cuts, the DOD has already frozen all new hiring actions. They have also notified re-employed annuitants that their current employment will be terminated on March 9th. These are a category of previously retired civil servants who elected to re-enter the government workforce. Term and temporary personnel have also been informed of a like-wise termination on March 9th. The remaining civilian workforce will be full time and part time personnel, both in the white and blue collar career fields.
Guidance from Office of Personnel Management
Office of Personnel Management (OPM) has issued numerous guidance memorandums on the effects to the career status of furloughed personnel that can be located at www.OPM.gov. In general, the issued guidance highlights the following major employment concerns of all DOD civilian personnel:
- 1. The annual full salary for each person’s current pay grade and step level will not change. People will not be paid for 22 of those 260 regular days of pay.
- 2. All current deductions from a two week pay period will continue to be taken at the regular full amount for Government life insurance policies; health, dental and vision insurance policies; retirement accounts; and Medicaid tax. If someone’s reduced net pay is not large enough to cover all the deductions during sequestration, no employee will lose their life, health, dental or vision coverage. Any payment amounts still owed will be recouped when full pay is restored after sequestration terminates.
- 3. The current OPM policy remains in effect which dictates that at the point during a calendar year, January 1st to December 31st, when someone has accumulated 80 hours of unpaid leave, that pay period will not have any annual or sick leave earned. With 22 days of non pay programmed during this calendar year, this loss of annual and sick leave will be triggered twice during sequestration. It does not matter if someone has leave accrued, it cannot be used on furloughed days.
- 4. Time in-grade for automatic step increases will not be enforced during a sequestration. Normally, when someone has accrued 80 hours of non pay, any scheduled step increase would be delayed one pay period. This policy is being waived during sequestration.
- 5. Civilian employees are able to work part time jobs while in a furloughed status. But, the individual remains a Federal employee and as such, the part time work must not be depended on, related to, or conflict with the person’s government position.
- 6. Individuals already in a leave status on their scheduled furloughed days will not be charged for leave and will not receive any pay. Civilian employees cannot work from home and cannot volunteer to work while in a furloughed status. It is against the law for the Federal government to receive voluntary work and it is also the law that if a civilian is approved to work, that person must be paid.
Some Details Not Yet Established
At the current time, the furloughs will be enacted across all civilian career fields. It has not been finalized whether military components will have the authority to enact their furloughs all at once, meaning 22 consecutive non pay days, or at a rate of one day a week for 22 weeks. It also has not been finalized if all civilian employees within a component will be furloughed on the same day each week, or if there will be a staggered furlough.
The Bottom Line on Services
Assuming a staggered furlough approach rather than a complete shutdown, it would mean that there will be 20% less personnel on the job every day. The bottom line direct impact of sequestration is that where there are DOD civilian personnel, there will be reduced services available. When individuals are furloughed one day a week, this would not be sufficient time off from work to qualify for unemployment. A person must be unemployed for over five consecutive days to qualify for those programs.
Best and Worst Case Scenario
The best case scenario remains in the hands of our Congress members. If they reach a budgetary agreement on spending and deficit levels that is acceptable to both the House and the Senate and a plan which the President will sign it, the sequestration will stop.
The worst case scenario remains in the hands of our Congress members. If no agreement is reached and the debates and battles are not resolved, any ongoing sequestration can continue for up to 10 more years. That is not a situation that any working individual wants to contemplate.