US federal payroll services mostly operational despite partial govt shutdown US federal payroll services mostly operational despite partial govt shutdown

US federal payroll services mostly operational despite partial govt shutdown
07 Jan 2019

Four of the US government’s five biggest shared services providers (SSPs) are still running common systems such as payroll, despite Washington’s partial shutdown.

But while these SSPs are currently getting by using fees from customer agencies, the situation could change depending on how long the shutdown lasts. Organisations across government rely on the General Services Administration (GSA), Defense, Agriculture, Treasury and Interior departments to manage common systems such as payroll and property management. Of those groups, only the Pentagon is unaffected by the current funding lapse.

Professional services council executive vice president and counsel Alan Chvotkin told Nextgov that, in most cases, shared services functions were able to stay open because they are funded by fee-for-service agreements rather than Congress.

Employees within the Interior Business Center, which manages HR, payroll and other operations for a number of agencies, are considered exempt from shutdown measures because their “compensation is financed by other than annual appropriations”, according to the function’s contingency plan. Some of the shared services staff at the GSA and Agriculture Department are also exempt, and their offices can continue to operate using payments collected from customer agencies.

Put another way, while funded agencies should be in a position to continue paying for services throughout the partial shutdown, unfunded agencies will not be able to access them once their coffers run dry. This means that employees could possibly see their salary payments being delayed. According to SIT News, President Donald Trump has already intervened to ensure that US Coast Guard staff are paid.

Meanwhile, banks and credit unions that cater to federal workers are preparing to offer financial help, including low- or no-interest payroll advances and loans. A total of 800,000 federal employees have been furloughed or have been working without pay since 21 December and will not receive their next salary until government reopens for business.

But WRAL reported, while federal employees typically receive back pay due to this situation, federal contractors often do not, which means that not all banks are prepared to provide them with financial support.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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Four of the US government’s five biggest shared services providers (SSPs) are still running common systems such as payroll, despite Washington’s partial shutdown.

But while these SSPs are currently getting by using fees from customer agencies, the situation could change depending on how long the shutdown lasts. Organisations across government rely on the General Services Administration (GSA), Defense, Agriculture, Treasury and Interior departments to manage common systems such as payroll and property management. Of those groups, only the Pentagon is unaffected by the current funding lapse.

Professional services council executive vice president and counsel Alan Chvotkin told Nextgov that, in most cases, shared services functions were able to stay open because they are funded by fee-for-service agreements rather than Congress.

Employees within the Interior Business Center, which manages HR, payroll and other operations for a number of agencies, are considered exempt from shutdown measures because their “compensation is financed by other than annual appropriations”, according to the function’s contingency plan. Some of the shared services staff at the GSA and Agriculture Department are also exempt, and their offices can continue to operate using payments collected from customer agencies.

Put another way, while funded agencies should be in a position to continue paying for services throughout the partial shutdown, unfunded agencies will not be able to access them once their coffers run dry. This means that employees could possibly see their salary payments being delayed. According to SIT News, President Donald Trump has already intervened to ensure that US Coast Guard staff are paid.

Meanwhile, banks and credit unions that cater to federal workers are preparing to offer financial help, including low- or no-interest payroll advances and loans. A total of 800,000 federal employees have been furloughed or have been working without pay since 21 December and will not receive their next salary until government reopens for business.

But WRAL reported, while federal employees typically receive back pay due to this situation, federal contractors often do not, which means that not all banks are prepared to provide them with financial support.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER STORIES THAT MAY INTEREST YOU

Hawaiian Senator attempts to change payroll law to deter salary overpayments

Employers and unions sue Jersey City over new payroll tax

California unveils raft of new wage and anti-discrimination legislation

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