When the federal government shuts down, employees brace for furloughs and back pay. But for federal contractors, the story is very different. In most cases, contractors are not guaranteed back pay. Instead, they may face missed paychecks, lost projects, and long-term career disruptions.

At the National Security Law Firm, we represent contractors nationwide who are caught in the crossfire of shutdown politics. Here’s what you need to know if you work under a federal contract and your agency closes its doors.

Contractors vs. Federal Employees in a Shutdown

The difference comes down to funding and law:

  • Federal employees are covered by the Government Employee Fair Treatment Act of 2019, which guarantees back pay once appropriations resume.

  • Federal contractors are not covered. Whether you’re paid depends on the terms of your contract and the willingness of your employer to absorb losses.

That means while federal employees eventually get made whole, contractors often do not.

Common Fallout for Contractors

Shutdowns hit contractors hard in ways that can linger long after appropriations return:

  1. Missed Paychecks
    Contractors sent home during a shutdown typically do not receive pay for lost hours unless their contract requires it.

  2. Lost Benefits
    Extended shutdowns can disrupt health insurance, leave accrual, and retirement contributions—especially for smaller contracting firms.

  3. Project Termination or Delay
    Contracts may be suspended or terminated for convenience, leaving employees without work.

  4. Security Clearance Risks
    If your contract lapses and you’re unemployed for an extended period, it could raise “financial concerns” under Guideline F during a clearance reinvestigation.

  5. Career Uncertainty
    Even after funding resumes, agencies often re-prioritize projects, leaving contractors sidelined or replaced.

Do Contractors Have Rights?

Yes—but they’re different from federal employees’ rights. Contractors may be able to:

  • Pursue wage claims under the Fair Labor Standards Act if employers mishandle pay.

  • File breach-of-contract claims if contractors fail to honor employment agreements.

  • Challenge discrimination or retaliation if furlough or termination decisions are pretext for unlawful motives.

  • Mitigate clearance risks by showing proactive steps to manage debts or gaps caused by shutdown-related job loss.

The key is knowing which path applies to your situation.

How NSLF Supports Federal Contractors

Shutdown fallout is stressful—but you don’t have to face it alone. Our attorneys help contractors by:

  • Advising on contract and wage claims when employers mishandle pay or benefits.

  • Protecting security clearances from financial fallout caused by shutdowns.

  • Representing retaliation and discrimination cases when shutdowns are used as cover for unlawful employment practices.

  • Guiding career transitions when contracts are delayed, restructured, or terminated.

Why Choose NSLF?

  • Insider experience: Our attorneys include former government lawyers, JAG officers, and clearance adjudicators who understand both agency and contractor dynamics.

  • 4.9-star Google reviews from clients across the country.

  • Located in Washington, D.C., at the center of federal contracting and oversight.

  • Flexible legal financing with installment plans from 3–24 months, so you can fight back without delay.

  • Mission-driven: We fight to protect the livelihoods of contractors who keep our government running.

National Security Law Firm: It’s Our Turn to Fight for You.

Ready to Take the Next Step?

If you’re a contractor facing missed pay, lost benefits, or clearance risks because of the shutdown, now is the time to act. Waiting only makes financial and legal issues worse.

📞 Book a $500 one-hour consultation online today. We’ll review your situation, explain your options, and map out a strategy to protect your career.

Your work matters. We’ll make sure your rights do too.

More Shutdown Resources for Federal Employees

The shutdown raises many legal questions beyond RIFs. We’ve built a series of guides to help you understand your rights and options:

Each post dives deep into a different issue—together, they form the most comprehensive resource online for federal employees navigating a shutdown.