On November 12, 2025, the federal government finally reopened after a 43-day shutdown – the longest in U.S. history. During the period of a government shutdown, federal employees cannot be paid and can only be paid when Congress reaches a deal and the lapse in appropriations ends. While this means that hundreds of thousands of federal employees were sent home without pay (approximately 670,000 in total) during this most recent shutdown, hundreds of thousands of “essential” employees – basically, the ones necessary to keep the country running (about 730,000 in total) – were required to continue working, without pay, with only the promise of retroactive pay when the government reopens.1
Good luck trying that as a private employer. In the private sector, federal and state wage and hour laws impose strict pay requirements. Although employers may experience financial hardship or operational disruptions, some of which may even require an employer to suspend or “shut down” operations for a period, there is no equivalent “private sector shutdown” exception allowing a company to demand work now with only the promise to pay at a later date.2 Once an employee performs work, it must be paid promptly and in full on the next regular payday.
The Fair Labor Standards Act (FLSA) is the main federal law governing the payment of minimum wages and overtime. All states also have their own laws regulating wages and hours, and employers must follow whichever standard is most favorable to the employee.
The baseline minimum wage rate established under the FLSA is $7.25. Covered, nonexempt employees are entitled to at least this amount for every hour they are “suffered or permitted to work” in a workweek. Nonexempt employees also are entitled to overtime pay, at a rate of at least 1.5 times their regular rate of pay, for all hours actually worked over 40 hours in a workweek.
The FLSA mandates prompt payment of wages, which are due on the regular payday for a covered pay period. Missing that deadline constitutes a wage payment violation under the FLSA and virtually all state laws, even if an employee agrees to accept late payment. If work is performed, it must be paid in full and on time.
Pay frequency rules vary by state. Most require payment bi-weekly or semi-monthly, but rules vary by jurisdiction. For example, in California, the prompt payment of wages is considered a fundamental public policy.3 Unsurprisingly, California has strict pay frequency rules. Generally, California employees must be paid at least twice per month on designated regular paydays. Wages earned between the 1st and 15th of day of the month must be paid no later than the 26th day of the month for which work was performed, and wages earned between the 16th and last day of the month must be paid by the 10th day of the following month. Employers must also post a notice showing the day, time, and location of payment.
Even within a particular jurisdiction, pay frequency rules may further vary by the specific type of employment. For example, in New York, an employee who spends more than 25% of their working time engaged in “physical labor” must be paid weekly and no later than seven calendar days after the end of the week in which wages are earned; railroad workers must be paid on or before Thursday of each week; and clerical/other workers must be paid at least semi-monthly.4
Failure to make prompt wage payments can, and often does, trigger costly and significant wage-and-hour liability. Employers may be liable for unpaid wages, an equal amount in liquidated damages, attorneys’ fees and costs, prejudgment interest, and statutory penalties (including waiting time penalties of up to 30 days in California for delayed payments).
Payroll delays also risk collateral consequences beyond late wages. For example, an employer who makes improper deductions from the salary of an overtime-exempt worker risks losing the exemption (and therefore owing unpaid minimum wage and overtime as backpay) for the entire period in which the improper deductions were made, not just for the affected employee but for all employees in the same job classification working for the same manager responsible for the improper deduction.5
In short, although the federal government can temporarily operate on unpaid labor during a shutdown, private employers simply cannot. Once work is performed, wages must be paid timely, regardless of business conditions.
1 The Government Employee Fair Treatment Act of 2019, codified at 31 U.S.C.A. § 1341, provides that “[e]ach employee of the United States Government or of a District of Columbia public employer furloughed as a result of a covered lapse in appropriations shall be paid for the period of the lapse in appropriations, and each excepted employee who is required to perform work during a covered lapse in appropriations shall be paid for such work, at the employee’s standard rate of pay, at the earliest date possible after the lapse in appropriations ends, regardless of scheduled pay dates, and subject to the enactment of appropriations Acts ending the lapse.”
2 See 29 C.F.R. § 530.303(b) (“An employer’s financial inability to meet obligations under the Act shall not constitute a mitigating or extenuating circumstance.”).
3 https://www.dir.ca.gov/dlse/faq_waitingtimepenalty.htm (“Public policy in California has long favored the full and prompt payment of wages due an employee.”).
4 See NYDOL, Frequency of Pay FAQ, https://dol.ny.gov/system/files/documents/2021/03/frequency-of-pay-frequently-asked-questions.pdf.
5 29 C.F.R. § 541.602(2) (“An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business.”)
