NTEU Statement on Payroll Tax Deferral

Press Release September 1, 2020

A Statement by NTEU National President Tony Reardon

The roll out of the president’s payroll tax deferral for the federal workforce is chaotic and confusing. Right now, even the effective date is unknown which is especially unsettling for federal workers who deserve to know what is being done to their paychecks and when. But even worse, the administration has not provided information to federal employees about the implications this deferral will have on future tax obligations.  

Since the administration has failed to educate its own workforce, we have warned the employees we represent that while their paychecks might be larger for the rest of 2020, they need to be prepared to pay back the amounts that were deferred, starting in January. The administration has yet to explain to employees how the deferred taxes will be recouped in 2021, whether through additional payroll tax withholdings for several weeks or months, or a lump sum.  There are a lot of other details surrounding pay raises and employee departures that are still unknown.

Our request that the payroll tax deferral be optional for federal employees has fallen on deaf ears, which means all federal workers earning less than $104,000 a year will have no choice but to have their withholdings deferred.

While many major private-sector employers are walking away from this ill-conceived initiative, the government is forcing it upon the federal workforce. In the administration’s zeal, it appears not to have thought it through, which may turn out badly for employees. Federal employees will bear the brunt of this hasty, ill-advised plan that provides temporary relief with the possibility of longer-term damage.