Fair Pay for Federal Contractors Act of 2025
Summary
The "Fair Pay for Federal Contractors Act of 2025" (H.R. 5657) aims to provide back pay to federal contractors whose work was disrupted due to lapses in government appropriations. The bill appropriates funds for fiscal year 2026 to compensate contractors for reasonable costs incurred during appropriation lapses.
Specifically, it addresses compensation for employees who were furloughed, laid off, experienced reduced hours or pay, or used paid leave during these periods. The Act also mandates a report from the Administrator of the Office of Federal Procurement Policy to Congress detailing the adjustments made under the Act.
This report will include data on the number of affected employees and the compensation they received.
Expected Effects
The Act will likely result in federal contractors receiving compensation for costs incurred due to government shutdowns, specifically covering employee wages and benefits. This could stabilize the contractor workforce during future funding gaps.
It will also require federal agencies to adjust contract prices and provide back compensation. The Office of Federal Procurement Policy will need to compile and submit a report on the adjustments made.
Potential Benefits
- Provides financial relief to federal contractors and their employees affected by government shutdowns.
- Ensures that employees receive compensation for lost wages or benefits during lapses in appropriations.
- Stabilizes the federal contracting workforce by reducing the financial impact of government shutdowns on contractors.
- Requires transparency through a report to Congress on the adjustments made under the Act.
- May improve morale and productivity among federal contractor employees.
Potential Disadvantages
- Increases government spending by appropriating funds for back pay.
- May create administrative burdens for federal agencies in adjusting contract prices and processing compensation claims.
- Could incentivize contractors to rely on government bailouts during shutdowns rather than developing independent financial resilience.
- The cap on weekly compensation may not fully cover the losses of higher-paid employees.
- Potential for disputes over what constitutes "reasonable costs incurred."
Most Disadvantaged Areas:
Constitutional Alignment
The Act aligns with the constitutional principle of providing for the general welfare (Preamble). Congress has the power to appropriate funds (Article I, Section 8) and to make laws necessary and proper for carrying out its enumerated powers. The Act does not appear to infringe upon any specific constitutional rights or limitations.
The Act's focus on compensating workers affected by government shutdowns could be seen as promoting economic stability and reducing potential disruptions to government services, which aligns with the goal of ensuring domestic tranquility.
However, the constitutionality of the Act could be challenged if it were argued that the appropriations are not for a public purpose or that they violate the principle of equal protection under the law.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).