Fair Pay for Federal Contractors Act of 2025
- Bill Number
- H.R. 5657
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Government Operations and Politics
- Status
- Introduced
- Latest Action
- 2025-09-30: Referred to the Committee on Appropriations, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-06-25T08:08:32Z
AI-Generated Summary
Purpose
The Fair Pay for Federal Contractors Act of 2025 aims to provide financial compensation to federal contractors and their employees who faced disruptions due to a lapse in government appropriations (commonly known as a government shutdown). It ensures that contractors can recover costs for paying workers during such periods, even if contracts did not originally allow for it.
Key Provisions
- Appropriation of Funds (Section 2): Allocates necessary funds from the U.S. Treasury for fiscal year 2026 (ending September 30, 2026) to federal agencies affected by the appropriations lapse starting around October 1, 2025, or any similar lapse in 2026. These funds are available until December 31, 2026, specifically for adjusting contract prices.
- Back Compensation Adjustments (Section 3):
- Federal agencies must increase contract prices to cover reasonable costs contractors incurred due to the lapse, including:
- Paying furloughed, laid-off, or underemployed workers at their standard rates during the lapse period.
- Restoring paid leave used by employees because of the lapse.
- Adjustments apply regardless of whether the original contract allowed or prohibited such costs.
- Weekly compensation cap: Limited to the lesser of an employee's actual weekly pay or $1,442 (pro-rated for part-time workers under 40 hours/week).
- Only actual incurred costs qualify, and contractors must provide evidence (e.g., payroll records) approved by the agency head, in consultation with the Office of Federal Procurement Policy (a government office overseeing federal buying processes).
- Adjustments must occur as soon as possible after the bill's enactment.
- Reporting Requirement (Section 3(e)): The Office of Federal Procurement Policy must submit a report to Congress (Senate Committee on Homeland Security and Governmental Affairs and House Committee on Oversight and Government Reform) and make it public within one year of enactment. The report details affected agencies, employee numbers impacted (e.g., furloughed workers, those receiving back pay or using leave), and compensation outcomes.
- Authorization of Additional Funds (Section 4): Authorizes further appropriations as needed for the adjustments.
- Definitions (Section 3(f)):
- "Compensation" refers to pay as defined in federal procurement law (41 U.S.C. § 6701(1)).
- "Employee" includes service employees (e.g., those in maintenance or janitorial roles under federal contracts) and laborers or mechanics (covered by wage protections in 40 U.S.C. § 3142), expanding slightly to include certain exempt categories.
Significant Changes to Existing Law
- Introduces a mandatory mechanism for federal agencies to adjust contract prices retroactively for shutdown-related employee costs, overriding any conflicting contract terms—a new protection not explicitly provided in prior law.
- Expands eligibility for back pay to a broader range of contractor employees (e.g., including some previously exempt service workers) and sets a specific compensation cap, which did not exist before.
- Requires detailed congressional reporting on shutdown impacts, enhancing transparency compared to past ad-hoc shutdown responses.
Potential Impacts
- On Government Agencies: Agencies must promptly process and fund contract adjustments, potentially straining administrative resources and budgets during recovery from a shutdown. This could lead to smoother resumption of federal projects but increase short-term spending.
- On Citizens: Primarily benefits employees of federal contractors (e.g., those in construction, maintenance, or support services) by providing back pay or leave restoration, reducing financial hardship from shutdowns. It may indirectly support job stability in industries reliant on government work, affecting working-class families.
- On International Relations: No direct impact, as the bill focuses on domestic federal contracting and appropriations.
Main Stakeholders Affected
- Federal Contractors and Subcontractors: Directly receive contract price increases to cover employee costs, easing financial burdens from shutdowns.
- Contractor Employees: Service workers, laborers, and mechanics gain access to back compensation, with protections up to the weekly cap.
- Federal Agencies: Responsible for implementing adjustments and providing data for reports, including departments like Defense, Homeland Security, or others with active contracts.
- Congress and Oversight Bodies: Gain detailed insights via the required report to monitor and refine future policies on shutdowns.
- Taxpayers: Bear the cost through Treasury appropriations, potentially increasing federal spending.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens federal procurement rules by mandating adjustments without needing contract amendments, potentially setting a precedent for handling future disruptions (e.g., natural disasters). It aligns with existing wage laws (e.g., Service Contract Act) but adds enforcement teeth through appropriations.
- Constitutional: Relies on Congress's power of the purse (Article I, Section 9) to appropriate funds, ensuring executive agencies can fulfill obligations without violating anti-deficiency laws (which prohibit spending unappropriated money).
- Political: Addresses inequities from government shutdowns by extending protections typically given to federal employees to private-sector workers, which could reduce political pressure on lawmakers during budget disputes. It may encourage bipartisanship on fiscal responsibility but raise debates over costs (estimated indirectly through "such sums as necessary" language). The bill's introduction by a large Democratic caucus in a hypothetical 119th Congress (2025-2026) highlights partisan focus on worker rights amid potential shutdown risks.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Pressley, Ayanna [D-MA-7]
Cosponsors (137)
Rep. Norcross, Donald [D-NJ-1], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Ansari, Yassamin [D-AZ-3], Rep. Balint, Becca [D-VT-At Large], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Beatty, Joyce [D-OH-3], Rep. Beyer, Donald S. [D-VA-8], Rep. Bonamici, Suzanne [D-OR-1], Rep. Brown, Shontel M. [D-OH-11], Rep. Budzinski, Nikki [D-IL-13], Rep. Casar, Greg [D-TX-35], Rep. Casten, Sean [D-IL-6], Rep. Castor, Kathy [D-FL-14], Rep. Clarke, Yvette D. [D-NY-9], Rep. Cleaver, Emanuel [D-MO-5], Rep. Davis, Danny K. [D-IL-7], Rep. DeGette, Diana [D-CO-1], Rep. DelBene, Suzan K. [D-WA-1], Rep. Elfreth, Sarah [D-MD-3], Rep. Escobar, Veronica [D-TX-16], Rep. Espaillat, Adriano [D-NY-13], Rep. Evans, Dwight [D-PA-3], Rep. Fields, Cleo [D-LA-6], Rep. Fletcher, Lizzie [D-TX-7], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. Garcia, Sylvia R. [D-TX-29], Rep. Goldman, Daniel S. [D-NY-10], Rep. Green, Al [D-TX-9], Rep. Horsford, Steven [D-NV-4], Rep. Jackson, Jonathan L. [D-IL-1], Rep. Jayapal, Pramila [D-WA-7], Rep. Nadler, Jerrold [D-NY-12], Rep. Kennedy, Timothy M. [D-NY-26], Rep. Landsman, Greg [D-OH-1], Rep. Larson, John B. [D-CT-1], Rep. Lynch, Stephen F. [D-MA-8], Rep. Matsui, Doris O. [D-CA-7], Rep. McClellan, Jennifer L. [D-VA-4], Rep. McCollum, Betty [D-MN-4], Rep. Moulton, Seth [D-MA-6], Rep. Mullin, Kevin [D-CA-15], Rep. Ocasio-Cortez, Alexandria [D-NY-14], Rep. Peters, Scott H. [D-CA-50], Rep. Pettersen, Brittany [D-CO-7], Rep. Pingree, Chellie [D-ME-1], Del. Plaskett, Stacey E. [D-VI-At Large], Rep. Ramirez, Delia C. [D-IL-3], Rep. Raskin, Jamie [D-MD-8], Rep. Rivas, Luz M. [D-CA-29], Rep. Ruiz, Raul [D-CA-25] and 87 more
Recent Actions
- 2025-09-30: Referred to the Committee on Appropriations, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-09-30: Referred to the Committee on Appropriations, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-09-30: Introduced in House
- 2025-09-30: Introduced in House
Bill Versions
- Fair Pay for Federal Contractors Act of 2025 — issued 2025-09-30 — PDF (7 pages)