Fair Pay for Federal Contractors Act of 2025
This bill provides back pay to employees of federal contractors who lost pay due to a lapse in appropriations (i.e., government shutdown) in FY2026.
Specifically, the bill provides appropriations for federal agencies that are subject to a lapse in appropriations in FY2026 to adjust the price of contracts to compensate federal contractors for providing back pay to employees who were affected by the lapse in appropriations.
The agencies must adjust the price of any contract for which the contractor stopped, suspended, delayed, or interrupted all or part of the work under the contract due to the lapse in appropriations. The price adjustment must compensate the contractor for reasonable costs incurred to (1) compensate employees who were furloughed or laid off, were not working, or experienced a reduction of hours or compensation due to the lapse in appropriations; or (2) restore paid leave taken by employees during the lapse in appropriations if the contractor required or permitted employees to use paid leave as a result of the lapse in appropriations.
The maximum amount of weekly compensation of an employee for which an adjustment may be made under this bill may not exceed the lesser of (1) the employee's actual weekly compensation, or (2) $1,442 (or a lesser amount pro-rated for an employee who works less than 40 hours per week).
The bill also requires the Office of Federal Procurement Policy to submit a report to Congress on the adjustments made under this bill.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2963 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2963
To provide back pay to Federal contractors, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 1, 2025
Ms. Smith (for herself, Mr. Kaine, Mr. Warner, Mr. Van Hollen, Ms.
Alsobrooks, Mr. Padilla, Ms. Duckworth, Mr. Durbin, Ms. Baldwin, Ms.
Warren, Mr. Heinrich, Mr. Blumenthal, Mr. Markey, Mr. Sanders, Ms.
Rosen, Ms. Hirono, Ms. Klobuchar, Mrs. Shaheen, Mr. Whitehouse, Mr.
Wyden, Mr. Schatz, Mrs. Gillibrand, Mr. Fetterman, Ms. Cortez Masto,
Mr. Gallego, Mr. Booker, Mr. Schiff, Ms. Blunt Rochester, Mr. Lujan,
Mr. King, Mr. Kim, Mr. Merkley, and Mr. Kelly) introduced the following
bill; which was read twice and referred to the Committee on Homeland
Security and Governmental Affairs
_______________________________________________________________________
A BILL
To provide back pay to Federal contractors, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Pay for Federal Contractors Act
of 2025''.
SEC. 2. APPROPRIATION.
There is hereby appropriated, out of any money in the Treasury not
otherwise appropriated, for the fiscal year ending September 30, 2026,
such sums as may be necessary for each Federal agency subject to the
lapse in appropriations that began on or about October 1, 2025, and any
subsequent lapse in appropriations occurring during fiscal year 2026
for adjustments in the price of contracts of such agency under section
3: Provided that, such sums shall be available for such purposes until
December 31, 2026.
SEC. 3. BACK COMPENSATION FOR EMPLOYEES OF GOVERNMENT CONTRACTORS IN
CONNECTION WITH THE LAPSE IN APPROPRIATIONS.
(a) Back Compensation.--
(1) In general.--Each Federal agency subject to the lapse
in appropriations shall adjust the price of any contract of
such agency for which the contractor suspended, delayed, or
interrupted all or part of the work of such contract, or
stopped all or any part of the work called for in such
contract, as a result of the lapse in appropriations to
compensate the contractor for reasonable costs incurred--
(A) to provide compensation, at an employee's
standard rate of compensation, to any employee who was
furloughed or laid off, or who was not working, who
experienced a reduction of hours, or who experienced a
reduction in compensation, as a result of the lapse in
appropriations (for the period of the lapse); or
(B) to restore paid leave taken by any employee
during the lapse in appropriations, if the contractor
required or permitted employees to use paid leave as a
result of the lapse in appropriations.
(2) Adjustment notwithstanding contract terms.--An
adjustment may be made under this subsection for costs incurred
as described in paragraph (1) regardless of whether the
contract concerned provides for, or otherwise prohibits, the
contractor to incur such costs or receive such an adjustment
for incurring such costs.
(b) Limitation on Amount of Weekly Compensation Covered by
Adjustment.--The maximum amount of weekly compensation of an employee
for which an adjustment may be made under subsection (a) may not exceed
the lesser of--
(1) the employee's actual weekly compensation; or
(2) $1,442 (or an appropriate lesser amount pro-rated for
an employee who works less than 40 hours per week).
(c) Scope of Adjustment Authority.--
(1) Adjustment only for costs actually incurred.--An
adjustment may be made under subsection (a) only for costs
actually incurred by a contractor as described in paragraph (1)
of that subsection.
(2) Proof of provision of compensation.--A contractor
seeking an adjustment under subsection (a) shall provide the
head of the Federal agency concerned such evidence of the costs
incurred by the contractor as described in paragraph (1) of
that subsection as the head of the agency, in consultation with
the Administrator of the Office of Federal Procurement Policy,
considers appropriate.
(d) Timing of Adjustments.--The adjustments required by subsection
(a) shall be made as soon as practicable after the date of the
enactment of this Act.
(e) Report.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, the Administrator of the Office of
Federal Procurement Policy shall submit to the appropriate
committees of Congress and make publicly available a report on
the adjustments made under subsection (a).
(2) Elements.--The report required by paragraph (1) shall
set forth the following:
(A) Each Federal agency described in paragraph (1)
of subsection (a) that made adjustments required by
that subsection.
(B) For each agency, the following:
(i) The total number of contractor and
subcontractor employees working for such agency
as of the commencement of the lapse in
appropriations described in subsection (a)(1).
(ii) The total number of contractor
employees covered by clause (i) who were
furloughed, laid off, or did not work as a
result of the lapse in appropriations.
(iii) The total number, if any, of
employees covered by clause (ii) who received
back compensation in connection with the
furlough, lay off, or cessation of work.
(iv) The total number, if any, of employees
covered by clause (ii) who were required or
permitted to use paid leave in place of the
furlough, lay off, or cessation of work.
(v) The total number, if any, of employees
covered by clause (ii) who received back
compensation equal to such employees' actual
weekly compensation in connection with the
furlough, lay off, or cessation of work.
(vi) The total number, if any, of employees
covered by clause (ii) who received back
compensation that was subject to the limitation
in subsection (b).
(f) Definitions.--In this section:
(1) The term ``appropriate committees of Congress'' means--
(A) the Committee on Homeland Security and
Governmental Affairs of the Senate; and
(B) the Committee on Oversight and Government
Reform of the House of Representatives.
(2) The term ``compensation'' has the meaning given that
term in section 6701(1) of title 41, United States Code.
(3) The term ``employee'' means the following:
(A) A ``service employee'' as that term is defined
in section 6701(3) of title 41, United States Code,
except that the term also includes service employees
described in subparagraph (B) or (C) of that section
notwithstanding such subparagraph.
(B) A ``laborer or mechanic'' covered by section
3142 of title 40, United States Code.
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as may be
necessary for each Federal agency subject to a lapse in appropriations
for adjustments in the price of contracts of such agency under section
3.
<all>
Introduced in Senate
Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
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