Fair Pay for Federal Contractors

Summary#

This bill requires Federal agencies to adjust contract prices to reimburse contractors who paid their employees because of a lapse in appropriations that began on or about October 1, 2025. Agencies must pay reasonable costs a contractor incurred to: (A) pay employees at their standard rate when those employees were furloughed, laid off, did not work, had reduced hours, or had reduced pay during the lapse; or (B) restore paid leave employees used because the contractor required or allowed leave during the lapse. Adjustments can be made even if a contract’s terms would otherwise prohibit such payments. The maximum weekly compensation covered is the lesser of actual weekly pay or $1,442 (pro rated for under 40-hour employees). Agencies may make adjustments only for costs actually incurred, and contractors must provide evidence of those costs as the agency head, with input from the Office of Federal Procurement (the Administrator of the Office of Federal Procurement Policy is named), considers appropriate. Adjustments are to be made as soon as practicable after enactment. The Office of Federal Procurement Policy must report to specified congressional committees and make public information about agencies that made adjustments, counts of affected contractor employees, and how back compensation was paid.

What it means for you#

• If you are a contractor employee who lost work or pay during the lapse in appropriations, your employer could receive reimbursement from the agency if the employer paid you or restored your paid leave. The reimbursement covers up to your actual weekly pay but no more than $1,442 per week (pro rated if you work under 40 hours).
• If you are a contractor employer, you can seek a contract price adjustment to recover reasonable costs you actually paid to employees for the lapse period. You must provide evidence of those costs to the agency. Agencies must consider such requests even if the contract’s terms say otherwise.
• Agencies will report how many contractor employees were affected and how back compensation was handled.

Expenses#

• The bill appropriates "such sums as may be necessary" from the Treasury for fiscal year 2026 to each agency affected by the lapse in appropriations to cover contract price adjustments under this Act. Those funds are available until December 31, 2026. The bill also authorizes appropriations of such sums as may be necessary.
• No publicly available information on the total or estimated cost of these adjustments is provided in the bill text.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.