Federal Employee Pay Status and Non-Pay Status: Benefits and Leave

Federal employee non-pay status is any period when you are on the rolls but earning no salary, whether through leave without pay, furlough, suspension, or AWOL. Your benefits do not all stop at once, but each one runs on its own clock, and time past certain thresholds costs you retirement credit, leave accrual, and progress toward your next step increase. Understanding those thresholds before you go into non-pay status is the difference between a manageable gap and a financial or career setback that surfaces years later.

The Four Kinds of Non-Pay Status

Leave Without Pay (LWOP) is a temporary non-pay status you request and your agency approves at its discretion. Common reasons include education, extended medical recovery, family obligations, or exhaustion of paid leave. Some situations create a near-entitlement to LWOP, such as military service under USERRA or qualifying leave under the Family and Medical Leave Act, but ordinary LWOP is discretionary.

A furlough is non-pay status the government imposes, not one you request. Administrative furloughs respond to funding or workload shortfalls; emergency furloughs follow shutdowns or budget lapses. Neither is disciplinary. Furloughed employees may be eligible for state unemployment benefits, subject to that state’s rules, and may have to repay them if back pay is later issued.¹

A suspension is disciplinary non-pay status imposed after due process for misconduct or performance issues. AWOL is a timekeeping code for unauthorized absence; it is not itself a disciplinary action, but it commonly triggers proceedings that can lead to removal.

What Happens to Your Health Insurance

Your FEHB enrollment continues for up to 365 days in non-pay status.² That window can be continuous or broken up, and if you return to pay status for at least four consecutive months, the 365-day clock resets.

The government keeps paying its share of the premium during continuation. You still owe your share. In 2026, that averages roughly $126 per pay period for self-only and around $303 for self-and-family, though your actual amount depends on the plan.³ With no paycheck to deduct from, you have two options: pay the agency directly on a current basis, or let the unpaid premiums accumulate as a debt that gets recovered from your pay when you return.⁴

Your agency must give you written notice of these choices once it knows your pay will fall short of your premium. If you take the debt route, months of accumulated premiums can hit your first paycheck back hard. If you neither pay directly nor elect to incur the debt, or your non-pay period runs past 365 days, the agency terminates your FEHB enrollment.⁴

Life, Dental, and Vision Coverage

FEGLI runs on a different clock. Basic coverage continues for up to 12 months in non-pay status at no cost to you. Four consecutive months back in pay status starts a fresh 12-month period.⁵ After 12 months, Basic coverage terminates, with a 31-day extension to convert to a private policy.

FEDVIP dental and vision work differently because there is no government contribution. If you enter non-pay status, contact the FEDVIP administrator to arrange direct payment or automatic bank withdrawals. Miss payments and your coverage stops; you cannot re-enroll until the next open season after you return to pay status.⁶ One exception: during a shutdown furlough, FEDVIP coverage continues and premiums are recovered from back pay when the lapse ends.

TSP Contributions and Loans

Both your contributions and the agency’s automatic 1% and matching contributions stop for any pay period in which you earn no basic pay.⁷ If you work part of a pay period, contributions are based on the basic pay you actually earned. Except for military service under USERRA, you cannot make up missed contributions after you return. Those pay periods are simply gone from a savings standpoint.

Outstanding TSP loans get automatically suspended once the TSP is notified you have entered non-pay status. The suspension lasts up to one year. After that, you must resume payments by check, money order, or direct debit, or the remaining balance is treated as a taxable distribution.⁸ You cannot take out a new TSP loan while in non-pay status.

Retirement Service Credit and the Six-Month Rule

Non-pay time counts toward retirement service credit, but only up to a limit. Under both CSRS and FERS, you get full service credit for up to six months of LWOP per calendar year.⁹ Beyond six months in a single calendar year, the excess is subtracted from your total creditable service, which pushes back your retirement eligibility date and your service computation date for leave accrual.¹⁰

No retirement deductions come out during non-pay status because there is no pay to deduct from. The first six months each calendar year is essentially free credit. Every day past that costs you, and the closer you are to retirement eligibility, the more even a few weeks matters for your minimum retirement age date.

Leave Accrual and Within-Grade Increases

Non-pay status reduces annual and sick leave accrual through an accumulation system. For a full-time employee on an 80-hour biweekly tour, every time you accumulate 80 hours of non-pay status in a leave year, you lose one pay period’s worth of leave accrual. The counter then resets. Any remainder under 80 hours at the end of the leave year is zeroed out.¹⁰ In the top accrual category, that is a full day of annual leave and four hours of sick leave per lost period.

Your within-grade increase waiting period also stretches when you spend time in non-pay status, though a small cushion is absorbed without penalty. For General Schedule employees, creditable non-pay time toward the waiting period is:

Steps 2, 3, or 4: up to 2 workweeks
Steps 5, 6, or 7: up to 4 workweeks
Steps 8, 9, or 10: up to 6 workweeks

For Federal Wage System employees, the thresholds are tighter: 1 workweek at step 2, 3 workweeks at step 3, and 4 workweeks at steps 4 and 5.¹¹ Non-pay time beyond those limits extends the waiting period day for day, so your next raise is pushed back by exactly that amount.

Holiday Pay While in Non-Pay Status

To receive your regular pay on a federal holiday, you need to be in pay status for at least one hour on either the workday before or the workday after the holiday. If you are in non-pay status on both surrounding workdays, you get nothing for the holiday.¹² Extended LWOP and furloughs that straddle a holiday are where this most often catches people out.

Military Service and Workers’ Compensation Get Different Treatment

USERRA-covered military LWOP overrides several of the penalties above. TSP loan repayment suspensions have no one-year limit for military service and last until you return to civilian duty.⁸ Missed TSP contributions during military service can be made up after you return, along with the corresponding agency matching contributions; no other type of non-pay status allows make-up contributions.⁷ FEGLI Basic continues free for 12 months and can be extended another 12 months if you pay both the employee and agency share.⁵ For retirement, the military service deposit may be based on military earnings or the civilian retirement deductions you would have paid, whichever is less.¹³

Employees receiving Office of Workers’ Compensation Programs benefits for an on-the-job injury are technically in non-pay status, since workers’ comp payments are not federal salary. They generally still receive retirement service credit for the time missed.¹⁴ OWCP payments are not “basic pay” for TSP purposes, so no TSP contributions are made during that period.⁷

Check Your SF-50 When You Return

Transitions into and out of non-pay status are documented on a Standard Form 50, the Notification of Personnel Action.¹⁵ Not every brief absence generates one; LWOP under 30 days does not always require a separate SF-50, but suspensions of any length and furloughs of any length do. When you return, your agency processes a Return to Duty action, also on an SF-50, restarting salary and reactivating automated deductions.¹⁶

Read the SF-50 when it arrives. Errors in effective dates can shift your service computation date, leave accrual rate, and retirement eligibility for years. Raise anything wrong with HR immediately. These errors often go unnoticed until someone runs the numbers at retirement, and by that point they are much harder to correct.

1
U.S. Office of Personnel Management. Unemployment Compensation for Federal Employees Fact Sheet
2
eCFR. 5 CFR 890.303 – Continuation of Enrollment
3
U.S. Office of Personnel Management. Premiums
4
eCFR. 5 CFR 890.502 – Withholdings, Contributions, LWOP, Premiums, and Direct Premium Payment
5
GovInfo. 5 CFR 870.601 – Termination of Basic Insurance
6
eCFR. 5 CFR 894.406 – What Happens if My Pay Is Insufficient to Cover My FEDVIP Premiums, or I Go Into a Nonpay Status
7
Thrift Savings Plan. Bulletin 20-2: Effect of Nonpay Status on Thrift Savings Plan Participation
8
Thrift Savings Plan. Entering Nonpay Status
9
Office of the Law Revision Counsel. 5 U.S.C. 8411 – Creditable Service
10
U.S. Office of Personnel Management. Effect of Extended Leave Without Pay (LWOP) or Other Nonpay Status on Federal Benefits and Programs
11
U.S. Office of Personnel Management. GPPA Quick Sheet: Introduction to Within-Grade Increases
12
U.S. Office of Personnel Management. Fact Sheet: Federal Holidays – Work Schedules and Pay
13
U.S. Office of Personnel Management. Service Credit
14
U.S. Office of Personnel Management. How Will Workers Compensation Affect My Civil Service Annuity
15
U.S. Office of Personnel Management. Guide to Processing Personnel Actions – Chapter 15: Placement in Nonpay or Nonduty Status
16
U.S. Office of Personnel Management. Guide to Processing Personnel Actions – Chapter 16: Return to Duty from Nonpay Status