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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.

Hiring Freeze

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:

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.