Washington D.C. – The administration owes federal employees an immediate explanation of how and when the White House’s temporary tax deferral will affect their pay, according to a letter NTEU National President Tony Reardon sent Wednesday to the Office of Management and Budget.
To date, information to federal employees about the payroll tax deferral, as ordered by the president, has been incomplete and conflicting.
“They deserve to be fully educated on the impact the executive order will have on their paychecks and family budgets for months to come,” Reardon wrote in a letter to OMB Director Russell Vought.
Because there has not been a single government-wide explanation to educate them on the details, employees – if they are getting any information at all – are receiving conflicting notices from various payroll providers about when the deferral starts and how they will be expected to repay the money next year.
For example, Reardon asked OMB to confirm whether the deferral has already begun for employees in the pay period that began Sunday, which means their next paycheck on or near Sept. 18 will be affected.
“If that is accurate, federal employees deserve to be informed of that immediately,” Reardon wrote.
Under the program, federal employees who earn less than $104,000 a year will stop paying 6.2 percent of their salary toward Social Security for the remainder of 2020, but will be expected to repay those taxes in 2021, unless Congress passes a law to forgive the debt. Reardon said employees need to know how to repay the deferred taxes, whether by increased payroll withholdings next year or lump sum.
NTEU also reiterated its request that federal employees or agencies be allowed to opt out of the deferral program, which is a choice that is provided to private sector employers.
“As the largest employer in the country, the federal government is failing in its responsibilities to its workforce by not adequately informing federal employees and explaining the implications and consequences of the payroll tax deferral,” Reardon wrote.
NTEU represents about 150,000 employees at 33 federal agencies and departments.