IRS walks back retroactive pay guarantee for furloughed feds one day after making it

The Internal Revenue Service on Thursday revoked guidance it had sent to employees the day prior reminding them that federal statute guarantees those furloughed during the shutdown will receive back pay when the government reopens. 

The notice to employees ran counter to the Trump administration’s latest messaging that a 2019 law that guarantees back pay for furloughed workers in all shutdowns is no longer applicable. The White House floated that novel legal argument, which appeared to run contrary to the plain text of the law, earlier this week. 

IRS went so far as to delete the notice, which arrived in IRS employees’ inboxes Wednesday the subject line “furlough decision,” from their emails. Employees who spoke to Government Executive noted they still had access to the old version of the emails, which served as their official furlough notices, because they had downloaded it or sent it to themselves. 

“An earlier memo circulated on furlough guidance incorrectly stated the nature of the Government Employee Fair Treatment Act of 2019 as it relates to compensation for non-pay and non-duty status,” IRS said in the new email to staff, which was first reported by Federal News Network. “The Office of Management and Budget will provide further guidance on this issue, and you will be updated accordingly.” 

A post on the IRS website was similarly updated on Thursday to reflect the change in approach. The original message on its website and sent to employees said IRS was statorily required to retroactively pay furloughed staff. 

“Although you will be placed in non-pay and non-duty status during the furlough, the Government Employee Fair Treatment Act of 2019 requires employees of the federal government who are furloughed or required to work during a lapse in appropriations to be compensated for the period of the lapse,” the messages read, according to multiple copies obtained by Government Executive. “The employees must be compensated on the earliest date possible after the lapse ends, regardless of scheduled pay dates.”

That language was noteworthy because the Office of Management and Budget has deleted from its guidance any reference to the 2019 law or back pay for furloughed federal workers, as Government Executive first reported. After Axios on Tuesday revealed that the Trump administration would take a novel interpretation of the back pay law and argue it applied only to the 2019 shutdown, OMB released to media outlets new legal guidance making that argument.

Both Democrats and Republicans in Congress rejected the Trump administration's newly minted legal argument, saying the matter was settled and the workers were guaranteed retroactive pay. Legal experts said the plain reading of the law and its legislative history made clear Congress intended to ensure back pay for those furloughed in all future shutdowns, and the Trump administration’s own guidance on the law in 2019 stated it applied in perpetuity.

IRS originally kept all of its employees working during the shutdown using carryover funds, but on Wednesday sent home nearly 35,000 employees, or around 46% of its workforce. 

While IRS is threatening furloughed employees with making them go without back pay, it has told exempted employees—those who continue to work because their salaries are paid through means other than annual appropriations—that they will receive their paychecks on time, according to messages reviewed by Government Executive.