A federal court recently held that the government violated the law when it failed to timely pay its employees during the 2013 government shutdown. The 24,000 employees were essential employees and therefore continued working during the five (5) day shutdown. The government, however, did not pay them for this time in their next regularly scheduled paycheck, even though it did pay them thereafter. The government believed that it was legally precluded from making those payments under the Anti-Deficiency Act (ADA), which precludes the employees
The employees sued because they were paid late, and the court agreed that the government is liable for damages due to the delayed payment. While the court recognized that the ADA’s requirements may prevent government officials from incurring financial obligations if sufficient funds are not available, it also held that they do not affect the rights of citizens who are “honestly contracting with the government.” Thus, while the ADA did not allow government officials to pay the employees, it also did not cancel the financial obligations to the employees. The court held that the government was therefore liable for liquidated damages in an amount equal to the minimum and overtime wages that it failed to timely pay.