In a partial government shutdown, media reports–and employees themselves–commonly express the difference between those who remain on the job and those who are furloughed as the difference between employees who are “essential” versus “non-essential.” However, that is not the official term used and the distinction actually is more complex.
Agencies that do not draw their operating funds from appropriations–the Postal Service and TSP being two primary examples of interest to federal employees–continue operating as normal. The same is true of some self-funding parts of other agencies that do depend on regular appropriations but instead are funded on a reimbursable basis by other agencies for which they provide services. Their employees are deemed “exempt” and remain at work with their salaries paid as normal.
Among employees whose salaries are paid from appropriations, many are designated as “excepted” and continue working because of the nature of their positions–most commonly, those involving health, safety, security or similar duties. They are guaranteed to be paid for that time when spending authority is restored but they are working unpaid for the meantime. If a partial shutdown begins and ends within the same pay period, there would not even be a delay in their pay.
Such positions are defined in agency “contingency plans” which OMB commonly tells agencies to review just in advance of a possible partial shutdown. On the very verge of one, employees are notified of their status.
In the most recent partial shutdown, all but about 800,000 of the 2.1 million executive branch employees outside USPS and the intelligence agencies were kept on the job for one reason or the other.
Employees who are neither exempt nor excepted are put on unpaid furlough. The past practice always has been that they were later paid as if they had worked, but there is no guarantee–that would be up to the White House and Congress to decide. They similarly would not even see a delay in pay if the furlough ends quickly enough.
Employees who are on shutdown furloughs may not substitute annual leave or any other form of paid leave for the days they are furloughed. They may have outside earnings but remain subject to ethics laws regarding outside income. Under most state laws they would be eligible for unemployment compensation but most states have waiting periods before benefits could begin and would rule ineligible anyone who later is paid for furlough time.