Federal Employees Civil Relief Act

Federal Employees Civil Relief Act is a proposed law that would temporarily suspend or defer certain civil liabilities and protections for Federal workers and contractors during a government shutdown or when the debt limit is breached. The measure creates a framework for courts and agencies to pause or adjust obligations such as rent, mortgages, taxes, student loans, insurance premiums, liens, and other civil duties during the “covered period” (the shutdown plus 30 days afterward). It also limits evictions and foreclosures, protects insurance and credit-related interests (to some extent), and provides enforcement mechanisms including civil penalties and a private right of action. The aim is to reduce financial and civil rights harms faced by Federal workers and their households during funding gaps or debt-limit crises. ## Key Points - Scope and purpose: The act applies to Federal workers and contractors, and to civil actions and administrative proceedings nationwide, during a shutdown or debt-limit breach, but it does not apply to criminal cases or child support payments. - Anticipatory relief and financial protections: Workers affected by a shutdown may seek temporary stays or suspensions of various obligations (rent, mortgage, taxes, fines, student loans, etc.) to prevent immediate civil or financial harm. - Evictions, mortgages, liens: The act restricts court-ordered evictions and certain distress actions during a shutdown, allows stays or adjustments of housing obligations, and protects against certain sales or foreclosures of workers’ property; it likewise restricts lien foreclosures and allows court-based adjustments. - Student loans and taxes: Student loan payments can be deferred, with no accrual of interest during the covered period, and lenders are limited in collections; income tax collection can be deferred up to 90 days after the shutdown ends, with no interest/penalties and with a tolling of the collection statute of limitations. - Insurance and rights protections: Covered insurance policies cannot lapse for nonpayment of premiums due during the shutdown, absent a court order. The act also protects rights related to credit, insurance availability, and other civil obligations, and allows for reductions or waivers of penalties if the worker’s ability to comply was materially affected by the shutdown. - Enforcement and remedies: The Attorney General can bring civil actions for violations, with possible equitable relief, damages, and civil penalties. There is also a private right of action for aggrieved individuals, and the act allows that remedies under other laws are not prejudiced (no preemption). ## Impact Areas - Primary group/area affected - Federal workers and contractors: Individuals who are furloughed or required to work without pay would gain temporary protections and relief from certain civil obligations, as well as notification about benefits. - Secondary group/area affected - Landlords, mortgage lenders, lien holders, and other creditors: Activities like evictions, foreclosures, and lien enforcement would be constrained during the covered period, with potential court-ordered stays or adjustments; penalties for noncompliance could apply if violated. - Student loan servicers and financial institutions: Limits on collections, reporting, and defaults; court stays and deferments during shutdowns; penalties for violations. - Tax authorities and insurers: Deferred tax collection and continued insurance coverage during the shutdown; potential impacts on premium payment timing and policy continuity. - Additional impacts - Courts and administrative agencies: New procedures for stays, adjustments, and notification; potential increase in litigation related to relief requests; interplay with existing laws (e.g., Fair Credit Reporting Act) to protect or constrain credit outcomes. - State and local governments: Since the act claims applicability to states and jurisdictions, state agencies and courts could be involved in issuing stays or enforcing relief orders. - Public policy and administrative costs: Potential increase in administrative workload to process stays, adjustments, and enforcement actions; risk of uneven application if not uniformly implemented. Notes for context: - The bill defines a “covered period” as the shutdown start date through 30 days after shutdown ends, and it uses the term “shutdown” to cover lengthy funding gaps or debt-limit breaches. - It explicitly excludes criminal proceedings and child support from its protections and includes both federal employees and contractors under “federal worker.” - It provides a mix of automatic protections (deferrals, stays, and non-lapse of certain obligations) and court-based relief (need for orders to extend stays or adjust obligations). - Enforcement includes both government-led civil actions and a private right of action, with specified damages and penalties, and it preserves other remedies under law (no broad preemption).