When Congress Withholds Funding: How Agencies Decide Who Works Without Pay

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In January 2026, hundreds of thousands of federal employees woke up to an email they’d been dreading. Some learned they were sent home without pay—no work, no paycheck, uncertain when either would return. Others learned something arguably worse: they were marked as essential, meaning they had to keep showing up, doing their jobs, with no idea when they’d see a dime for it.

The difference between these two fates—between unpaid work and unpaid leave—wasn’t random. It emerged from a bureaucratic sorting process most Americans have never heard of. It’s governed by a law with roots in the 1870s and interpreted through legal opinions that treat phrases like “protection of life or property” as if they have obvious meanings.

What happens when Congress fails to fund the government isn’t a simple on-off switch. It’s a cascading series of judgment calls. Agency lawyers, department heads, and mid-level managers must decide, often within hours, which of their employees perform work essential enough to continue without pay.

The line between “essential” and “non-essential” federal work is far more subjective than the government wants to admit.

The Antideficiency Act and Its Exceptions

The foundation for all of this sits in a federal law called the Antideficiency Act. The law says federal employees can’t spend or obligate money that Congress hasn’t appropriated. When appropriations lapse, agencies are supposed to shut down all work immediately.

The statute contains two key exceptions. First, agencies can continue work “necessary for orderly termination” of their functions. In practice, “orderly termination” has been stretched to justify days or weeks of continued operations, because shutting down a federal agency turns out to be complicated.

Second, agencies can continue activities “necessary for the protection of life or property.” This exception has become the legal justification for keeping air traffic controllers on duty, TSA screeners at airports, and federal law enforcement agents on the job.

The problem is that “necessary for the protection of life or property” could mean almost anything. Is processing Social Security retirement benefits necessary for protecting property? The checks keep elderly people housed and fed, so arguably yes. What about the IT staff who maintain the servers that process those benefits? The lawyers who defend the agency in court? The HR personnel who handle the excepted employees’ eventual back pay?

These aren’t hypothetical questions. They’re the decisions agency lawyers make during every shutdown.

How Agencies Implement Shutdown Decisions

No one has seriously challenged these determinations in court. The result is a system where agency lawyers make consequential decisions about hundreds of thousands of workers’ livelihoods based on a statute with roots stretching back over 150 years.

The Office of Management and Budget puts this framework into practice through a document called Circular A-11 (Section 124), which requires agencies to maintain written contingency plans filed with the Office of Management and Budget. These plans lay out in advance which functions each agency considers essential and which employees would be excepted from furlough.

Those plans are guidelines, not mandates. When a shutdown hits, agency heads can and do revise their determinations based on the specific political and operational circumstances. A worker who was designated non-essential in the contingency plan might be called back as excepted if the shutdown extends and their function becomes unexpectedly critical.

How Three Agencies Make Different Calculations

DoD’s calculus focuses heavily on military readiness. Civilian staff directly supporting active military operations—logistics coordinators, intelligence analysts, and some maintenance workers—are excepted. Administrative staff, policy analysts, and most procurement specialists are sent home without pay. Individual commanders have discretion to designate specific subordinates as essential based on local operational needs, creating variation even within the same job classification.

The Department of Transportation faces a different problem. The Federal Aviation Administration must keep air traffic controllers working—their absence would ground commercial aviation within hours, clearly compromising public safety. TSA screeners fall into the same category. What about the FAA staff who train new controllers, though? The safety inspectors who aren’t currently working on a specific accident? The administrative staff who process controller certifications?

The Department of Homeland Security presents the most complex case. DHS staff whose positions depend on the specific appropriations that lapsed are either sent home without pay or working without pay.

This creates a surreal workplace dynamic: colleagues doing similar work, some paid, some not, based on confusing funding distinctions most of them don’t fully understand.

The General Counsel’s Role in Shutdown Decisions

The decision about which specific staff are excepted falls to each agency’s general counsel, working with department leadership. This is one of the less visible but more consequential roles government lawyers play.

The general counsel must interpret “necessary for the protection of life or property” in ways that are legally defensible, that work in practice, and that politicians will accept. These three criteria don’t always align.

How much administrative support is “critical”? If a federal prosecutor is excepted, is their paralegal? Their secretary? The IT person who maintains their email? The facilities worker who unlocks the building?

This flexibility makes operational sense—shutdowns are unpredictable, and agencies need to adapt. It creates real hardship for staff who can’t plan their lives because they don’t know if they’ll be working or sent home next week.

Some agencies sent furlough notices less than 24 hours before the shutdown began. Others provided several days’ warning. A worker notified Friday evening for a Monday furlough has no time to arrange childcare, notify potential outside employers, or prepare financially.

When Essential Work Depends on “Non-Essential” Support

When an agency designates a function as essential but that function depends on support from sent-home staff, something has to give.

Example: The Social Security Administration designates staff processing retirement benefits as excepted—elderly people need those checks to survive, clearly implicating protection of property. Those workers need IT support to access systems, facilities staff to maintain office buildings, and HR personnel to eventually process their back pay. If those support staff are sent home, can the excepted workers do their jobs?

These weren’t failures of planning. They were the inevitable result of trying to maintain complex operations with partial staffing based on legal categories that don’t map cleanly onto operational reality.

Financial Consequences: Furloughed vs. Excepted

For workers, the distinction between sent home and excepted status determines which type of financial hardship they’ll endure.

Those sent home must stop working immediately. They can’t access government offices or systems. They receive no paychecks during the shutdown. Federal law guarantees they’ll eventually get paid for the time they didn’t work, though the timing of this back pay legislation has varied across different shutdowns. That guarantee doesn’t help when rent is due today and the paycheck might arrive in three weeks. Or five. Or, as in 2018-2019, after 35 days.

Excepted staff face a different calculation. They must continue working at full capacity despite knowing their paychecks are delayed by an unknown duration. They have the same bills as those sent home but must also arrange childcare, transportation, and everything else required to show up for work—all while uncertain when they’ll be compensated.

During the 2018-2019 shutdown, TSA screeners and air traffic controllers worked more than a month without pay. Call-out rates spiked above 10 percent as workers sought other income or simply couldn’t afford to commute to jobs that weren’t paying them. The FAA documented that after three weeks, controller absences forced operational restrictions on flight traffic—which created the political pressure that finally ended the shutdown.

Federal staff affected by shutdowns have accessed emergency resources including zero-interest loans from federal credit unions, early 401(k) withdrawals, and in some cases, food banks. The Congressional Federal Credit Union offers furlough relief loans up to $10,000. Navy Federal provides no-interest loans repaid when back pay arrives.

Federal Contractors: No Protections, No Back Pay

Federal contractors—people who work for companies providing services to the government—face an even worse situation. The Antideficiency Act’s prohibition on obligating funds applies equally to contracts, so agencies generally can’t continue paying contractors during shutdowns.

The exceptions that allow excepted federal staff to work unpaid don’t extend to contractors the same way. Contractors performing essential work have no statutory guarantee of back pay. They must negotiate individually with agencies about whether they’ll continue working and whether they’ll eventually be compensated.

During the 2018-2019 shutdown, this created a two-tier system. Federal staff sent home or working without pay were guaranteed retroactive compensation through legislation. Federal contractors typically received nothing unless their specific contracts contained shutdown provisions—which most don’t.

Contractors don’t have unions to negotiate on their behalf about shutdown rules. Individual contractors typically lack legal resources to challenge agency determinations. They absorb the loss.

This matters because federal contractors now make up a substantial portion of the government workforce. At some agencies, contractors outnumber direct federal staff. When shutdowns hit, these workers—often doing identical work to federal staff at adjacent desks—simply lose income with no recourse.

The Trump Administration’s Approach to Shutdown Designations

The current shutdown operates under guidance influenced by the Trump administration’s approach, which differs in important ways from previous administrations.

In September 2025, preparing for a potential shutdown, OMB told agencies they could keep some workers who would normally be sent home if their retention might advance “presidential priorities.” This language suggested that essential designations could be driven partly by political priorities rather than purely by statutory safety criteria.

The Antideficiency Act’s framework doesn’t include an exception for “presidential priorities,” and federal employee unions questioned the approach. The guidance stood.

The administration also indicated that agencies should prepare layoff plans that could be implemented once the shutdown ended. This differs from prior administrations’ practice of treating shutdowns as temporary personnel stoppages.

The Pattern of Recurring Shutdowns

The January 2026 shutdown is the second major shutdown in three months. A 43-day shutdown ran from October through November 2025. Before that, the government shut down in 2018-2019 for 35 days, in 2013 for 16 days, and experienced several shorter lapses in prior years.

For 35 years, major shutdowns were rare—maybe one or two every ten years. Since 2010, they’ve become almost routine.

Research on the 2018-2019 shutdown’s effects reveals long-term consequences beyond immediate financial hardship. Agencies that sent home more workers lost more staff afterward, particularly among workers with less than ten years of service. More workers quit their jobs (not retired); they actively left for other work. This happened even among excepted staff whose jobs were technically secure. The experience of working without pay, and the associated stress, created incentives to seek private-sector employment. Among permanent staff, quit rates rose by roughly 16 percent compared to normal following the shutdown.

These departures created secondary staffing challenges. Positions left vacant had to be filled through lengthy hiring processes. Institutional knowledge walked out the door. This pattern was particularly acute at TSA and FAA, where workforce continuity directly affects operational safety.

Shutdowns cause departures, which weaken agencies’ operational capacity, which makes future shutdowns more disruptive, which causes more departures.

Violations of the Antideficiency Act Go Unprosecuted

The Government Accountability Office has repeatedly documented that agencies broke the law—instances where agencies continued activities beyond what was legally permissible during funding lapses. These violations resulted in administrative actions, not prosecutions.

During the 2018-2019 shutdown, the Department of Interior was found to have violated the Act by using recreation fees to keep national parks open and maintain services like trash collection.

These violations were documented and criticized, but no one faced consequences.

No one gets prosecuted partly because it would be politically unpopular to charge workers for unknowingly breaking a confusing law. It also reflects genuine uncertainty about what violates the statute. If the line between permissible and impermissible work is genuinely ambiguous, how can you criminally prosecute someone for getting the interpretation wrong?

The result is a system where the rules are theoretically strict but practically unenforced, allowing agencies to decide almost anything, with little accountability for questionable decisions.

What the Shutdown System Reveals About Government

The machinery of shutdown staffing decisions—the legal opinions, OMB circulars, agency contingency plans, and general counsel determinations—reveals something uncomfortable about how government works.

The system gives agencies a lot of freedom to decide what’s essential, but hides that freedom behind legal language. Phrases like “necessary for the protection of life or property” sound objective but let agencies decide almost anything. The same work might be deemed essential at one agency and non-essential at another. The same worker might be excepted in one shutdown and sent home in the next, depending on which political priorities are in play.

The people making these decisions are generally trying to keep government functioning under impossible constraints. The system’s subjectivity means that hundreds of thousands of workers’ financial security depends on interpretations of statutory language with roots stretching back over 150 years by lawyers they’ll never meet.

As shutdowns become more frequent and longer, the idea that shutdowns are temporary becomes harder to believe. The current system was designed for exceptional circumstances—brief lapses while Congress worked out final details of appropriations. It’s now being deployed as routine governance, with shutdowns used as leverage in unrelated policy disputes.

Federal employee unions have pushed for a proposed law called the Shutdown Fairness Act that would guarantee workers get paid during shutdowns. Such reforms face political obstacles: they would address congressional dysfunction by changing employment rules rather than fixing the appropriations process itself.

The shutdown staffing system works exactly as designed—it translates congressional failure into individual employee hardship, creating human consequences that eventually generate political pressure to end the shutdown. The system isn’t broken. It’s working as intended, with costs that fall entirely on federal workers rather than the legislators who created the problem.

The furlough notices going out to hundreds of thousands of staff represent the end product of this machinery. They’re not random. They’re not purely objective. They’re the result of legal interpretation, bureaucratic judgment, and political calculation, all filtered through a framework that pretends to be more certain than it is.

For those receiving those notices—whether they’re being sent home or told to work without pay—the distinction probably doesn’t matter much. Either way, they’re bearing the cost of a system that was never designed to protect them.