Shutdown hangover: Still waiting on pay, funding delayed, business approvals stalled

Posted at 3:04 PM, Feb 09, 2019
and last updated 2019-02-09 16:33:13-05

With the threat of another government shutdown looming Friday, government workers, federal agencies and private sector businesses are still trying to dig out from the damage of the last one.

While the majority of 800,000 affected federal employees have been able to collect the wages they lost during the record 35-day partial government shutdown, some still have not received any of their back pay — and some government contractors have not been able to return to work two weeks after the partial closure ended.

There are other lingering problems as well — backlogs at federal agencies and the possibility of another shutdown are causing delays on everything from the approval of new craft beers to stalling major companies’ plans to go public.

“There’s still a lot of work to do before we can get to anything close to back to normal,” Alan Chvotkin, executive vice-president of the Professional Services Council, told NBC News.

The council represents 400 companies with government contracts, and Chvotkin said many are still waiting on payments for work done before theDec. 22 shutdown. “There are millions and millions of dollars waiting to be paid out,” he said.

And some contractors given “stop work” orders during the shutdown still haven’t got the green light to return to work.

And while President Donald Trump signed legislation giving federal employees back pay and Congress has pushed for the payments to go out as soon as possible, some workers have received only a fraction of what they’re owed — and some haven’t gotten anything.

“We have people who are missing 25 to 30 percent of their pay,” said Dave Verardo of the National Science Foundation, a federal agency. “We have one guy who was paid three times in one day and still came up short.”

Officials say the problems are a result of “systems issues” at the National Finance Center, which is responsible for handling most of the paychecks for the 800,000 employees who were affected by the shutdown.

They added that about two percent of the Department of Homeland Security’s employees were hit by the pay problem, including some civilian Coast Guard employees.

“The Coast Guard is aware that approximately eight percent of our civilian workforce received pay for only one of the two missed pay periods during the lapse in appropriation. Additionally, approximately 0.2 percent of the civilian force did not receive either paycheck,” said Coast Guard spokeswoman Lisa Novak.

“The NFC is now processing all time cards associated with the missed pay periods. Originally, the Coast Guard and the NFC announced that all corrections would be made by Feb. 4-5; however, it now appears that it may take until Feb. 11-12 to correct all deficiencies and deliver the requisite paychecks,” she said

Bradley Bishop, a spokesman for the Office of Management and Budget, told the Associated Press earlier this week the Trump administration had taken “unprecedented steps to ensure federal employees impacted by the shutdown received back pay within a week.” He didn’t respond to questions about how many people still hadn’t been paid.

Most of the estimated 1.2 million government contractors who were affected, meanwhile, aren’t getting any back pay, although Chvotkin said he was hopeful Congress would pass legislation authorizing that pay before the next shutdown deadline. “It’s the first time this many members of Congress had talked about it,” he said.

Hangovers from the shutdown are also hampering private businesses.

Bill Butcher, founder of Port City Brewing in Alexandria, Virginia, testified at a congressional hearing this week that his business is still reeling because of a shutdown-caused backlog at the little known Alcohol and Tobacco Tax and Trade Bureau. The agency signs off on labels and formulas for craft beers — and the brewers can’t sell new beers without a Certificate of Label Approval.

He said the process for getting a COLA typically takes two weeks, but the backlog has pushed the wait up to almost two months.

“On Dec. 18, we submitted a label for a beer we were planning to release in the spring. Until we get that approval, we can’t sell that beer and the entire supply chain is on hold. The uncertainty isn’t just impacting my business, it’s impacting everyone I do business with,” including wheat farmers, he told the House Committee on Small Business. “We are just one of the thousands of small businesses who are dealing with these repercussions.”

Another agency dealing with a significant backlog is the Securities and Exchange Commission, which reviews initial public offerings for companies. It reportedly had a backlog of 40 IPOs at the time the shutdown went into effect, and major companies that had been planning on going public in the beginning of the year are now holding off because of the possibility of another shutdown, said John Coffee Jr., director of the Center on Corporate Governance at the Columbia Law School.

“The SEC has not caught up on its backlog. The backlog is already there,” Coffee said, noting the procedure takes time. “It’s a process of 3 to 4 weeks of SEC evaluations and then three weeks of negotiations … we’ve had 35 days where nothing happened.”

And while analysts were hoping for a string of valuable multibillion-dollar companies to go public, those companies are now in a wait-and-see mode.

“They want to wait for the optimal moment. Who’s going to be encouraged if the government shuts down? It’s like a ‘Groundhog Day’ trap,” Coffee said, referring to the classic Bill Murray movie in which the main character lives the same day over and over again.