H.R. 5657 — Fair Pay for Federal Contractors Act of 2025

This section appropriates such sums as may be necessary for FY2026 for each federal agency affected by the lapse in appropriations beginning on or about October 1, 2025, and any subsequent lapses during FY2026, to adjust the price of agency contracts under section 3, with funds available until December 31, 2026.

This section requires each Federal agency affected by a lapse in appropriations to adjust the price of relevant contracts to compensate contractors for reasonable costs incurred to provide back compensation—at employees' standard rates—to certain employees (i.e., service employees under the Service Contract Act of 1965 and laborers or mechanics under the Davis-Bacon Act [40 U.S.C. 3142]) who were furloughed, laid off, did not work, had reduced hours, or had reduced compensation due to the lapse, or to restore paid leave used during the lapse. Adjustments apply regardless of contract terms, are limited to actual costs incurred (with required proof), and cap weekly compensation at the lesser of an employee's actual weekly pay or $1,442 (pro-rated for fewer than 40 hours per week); they must be made as soon as practicable after enactment. The section further directs the Administrator of the Office of Federal Procurement Policy to report to the Senate Committee on Homeland Security and Governmental Affairs and the House Committee on Oversight and Government Reform (or their successors) within one year of enactment on agencies' adjustments, including employee counts affected, back pay provided, and use of the compensation cap.

This section authorizes appropriations of such sums as may be necessary for each federal agency subject to a lapse in appropriations to adjust the price of its contracts under section 3.