Fair Pay for Federal Contractors Act of 2025

Fair Pay for Federal Contractors Act of 2025

This bill provides back pay to employees of federal contractors who lost pay due to a lapse in appropriations (i.e., government shutdown) in FY2026.

Specifically, the bill provides appropriations for federal agencies that are subject to a lapse in appropriations in FY2026 to adjust the price of contracts to compensate federal contractors for providing back pay to employees who were affected by the lapse in appropriations.

The agencies must adjust the price of any contract for which the contractor stopped, suspended, delayed, or interrupted all or part of the work under the contract due to the lapse in appropriations. The price adjustment must compensate the contractor for reasonable costs incurred to (1) compensate employees who were furloughed or laid off, were not working, or experienced a reduction of hours or compensation due to the lapse in appropriations; or (2) restore paid leave taken by employees during the lapse in appropriations if the contractor required or permitted employees to use paid leave as a result of the lapse in appropriations.

The maximum amount of weekly compensation of an employee for which an adjustment may be made under this bill may not exceed the lesser of (1) the employee's actual weekly compensation, or (2) $1,442 (or a lesser amount pro-rated for an employee who works less than 40 hours per week).

The bill also requires the Office of Federal Procurement Policy to submit a report to Congress on the adjustments made under this bill.

Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov