What "government shutdown" means for employers

June 12th, 2018 by Fisher Phillips


This blog was written by Cheryl L Behymer, Steven Bernstein, Caroline Brown, Edwin Foulke Jr., Howard Mavity, Richard R. Meneghello, Thomas Rebel, and Shanon Stevenson at Fisher Phillips, which authors several of our resources. You can find the original here and their On the Front Lines Workplace Law Newsletter (which is excellent) here.

 

If Congress cannot approve a budget by this Friday at midnight, the federal government will shut down. What will this mean for employers across the country? A look back at the most recent government shutdown will provide lessons on what you can expect.

A Brief History Of Shutdowns

There have been 12 federal government shutdowns since 1981, when the Attorney General first interpreted budgetary law to permit such actions. Most have been brief: the first 10 were under five days in length, and four of those lasted just one day. But the 1995-96 shutdown endured for 21 days, and in October 2013—the last such event—in our nation’s history, the government hung a “Sorry, We’re Closed” sign on its front door for 16 days. It’s this shutdown that we can look to in order to best predict what will happen during this 2018 go-round. 

What If A Shutdown Is Averted At The Last Minute?

Congressional leaders are negotiating to try to avoid a shutdown, and perhaps may even implement temporary measures to postpone a possible closure (as has been the case several times in the past few years).  However, even if a shutdown is completely dodged or provisionally delayed, the threat of a stoppage is already impacting federal services.

All federal agencies are currently dedicating their resources to preparing for a possible shutdown, which means that jobs that should be getting their full attention are getting something less or even completely shelved for the time being. You can expect delays in working with any federal agency on any matter right now, so plan accordingly.

What Will Be Shut Down?

If no solution can be found and the shutdown proceeds, you will see most federal services completely halted during the shutdown. Only those workers whose services are deemed “essential” to the operation of our country—air traffic controllers, FBI agents, TSA personnel, military, etc.—will be on the job, but the vast majority of federal workers will be sitting at home until a budget is agreed upon.

Because budget battles frequently result in temporary funding bills, it is difficult to determine exactly what services will be suspended. You can, however, look to past history to determine what to expect. 

Employment Discrimination Law

The Equal Employment Opportunity Commission (EEOC) is the primary agency charged with the enforcement of federal discrimination laws. Employees often turn to the EEOC as their first option when they believe they have suffered a workplace wrong. During the 2013 shutdown, individuals were counseled to continue to file charges during the agency’s closure in order to ensure that statutes of limitation were not blown. The EEOC received over 3,100 charges of discrimination during that time period, but no investigations could start. It led to a backlog that took over a month to work through.

Employers who had questions about pending or closed charges were unable to receive information during this blackout period. All mediations and hearings were cancelled, and any litigation directly involving the EEOC as a party was suspended unless the relevant court did not grant a requested continuance. Expect the same if a 2018 shutdown occurs.

Labor Relations         

The National Labor Relations Board (NLRB), the agency which governs union-employer relations and union organizing drives, was decimated by the 2013 shutdown. Its contingency plan called for all but 11 of its 1,611 employees to be sent home for the duration of the impasse. It stopped handling all of its cases, which impacted union elections, unfair labor practice investigations, and the issuance of case decisions.

During this last shutdown, the Board handled due dates for filings by placing the cases in a state of temporary suspended animation. Any party that needed to file a document with the Board during this blackout period was automatically granted an extension of time equal to the number of days the shutdown lasted, and any due dates created prior to the shutdown were “tolled” by the same number of days even if the due date fell outside the dates of the closure. We would expect a similar measure to be put into place before the last NLRB employee turns off the lights and locks the door.

As expected, a backlog of union petitions developed in 2013, as the NLRB could not timely process them. Employers who receive petitions during a 2018 shutdown will likely be given a head-start to develop a response to the situation without an immediate pressing deadline looming, although we anticipate the Board will work hard to ramp back up to speed once the shutdown ends. Don’t postpone action on the petition even if no election date is yet on the calendar.

The “quickie election” rule did not exist in 2013, so a 2018 shutdown will place employers facing election petitions over the next several weeks into unchartered territory. It will be interesting to see if the Board attempts to require the compressed time periods imposed by the new rule despite the complications caused by the shutdown and its aftermath.

As with other agencies, we would expect any NLRB hearings scheduled during the shutdown period to be postponed for some time. Just as air traffic gets backed up during a storm, there will be a considerable backlog to work through, and it would not be surprising for some hearings to be delayed by a matter of weeks once the government gets back on its feet.

Wage And Hour Compliance

The Department of Labor’s Wage and Hour Division (WHD) was essentially stopped in its tracks during the last government shutdown. In a typical week, WHD concludes more than 600 investigations and compliance actions to enforce minimum wage, overtime, child labor safeguards, and other workplace protections. During the October 2013 impasse, it opened up only one new investigation, and placed over 6,000 ongoing investigations on hold.

We expect that a 2018 shutdown could look very similar in nature. Prepare for wage and hour investigations to be put on ice for the duration of the shutdown, and most pending compliance actions could be similarly halted. However, don’t count on automatic extensions (as the personnel working on any ongoing matter may be deemed “essential” and may decide to carry on with your matter), and even if you receive an extension, don’t count on it being the same period in length as any shutdown. You should use your time wisely during any break in the action. Finally, don’t expect a reprieve from battle if you are in the midst of a WHD investigation or litigation with the Solicitor’s Office.

Immigration

Employers will feel the sting of any government shutdown when it comes to immigration-related matters in a number of different ways:

  • During the 2013 shutdown, the Department of Homeland Security (DHS) and its sub-agencies generally stayed open. This included U.S. Citizenship and Immigration Services (USCIS), which adjudicates the vast majority of immigration processes. Because USCIS is a fee-based agency which requires petitions and applications be accompanied by filing fee checks, these services were not generally impacted in 2013 and not expected to be impacted in 2018.
  • Although USCIS may function, it will not be operating at full capacity because several of its services depend on other agencies. Most critically for employers, the U.S. Department of Labor (USDOL) will stop processing Labor Condition Applications, which are essential prerequisites for H-1B, H-2 and E-3 applications.
  • The USDOL will also stop processing PERM/Labor Certification Applications, which are the first step in the majority of the permanent residence/green card process, and are the most common basis for immigrant visa processing and seasonal worker applications.
  • In addition, the State Department also could be affected by the government shutdown. Consulates and embassies are responsible for the issuance of visas which allow foreign nationals to travel into the United States. Although this is a fee-based system, previous shutdowns saw delays and temporary stoppages of visa services because the State Department depends on other agencies for services such as calendaring appointments and background checks.
  • Finally, in the 2013 shutdown, E-Verify was temporarily unavailable. During the 16-day blackout, employers were unable to verify employee identities, enroll in the program, or take any action on cases in progress. If E-Verify is unavailable in 2018, USCIS will likely provide guidance to employers to reduce your liabilities.

Workplace Safety

If 2013 is any indication, the Occupational Safety and Health Administration (OSHA) will be severely impacted by a 2018 shutdown. Five years ago, the agency was forced to suspend 1,370 federal workplace inspections, many of which were never fully made up. During the 16-day impasse, the agency’s limited appropriations prevented it from doing any inspection work except for workplace fatalities, catastrophes, and imminent danger situations involving a high risk of serious harm. Approximately 90 percent of OSHA’s employees were furloughed, with area directors or assistant area directors shouldering much of the remaining burden. During that period, OSHA only opened up 238 total inspections, which comprised 16 percent of the expected amount of work it would normally expect during a similar time period.

Meanwhile, OSHA requirements, including contest and abatement periods, continued during the shutdown, although OSHA personnel were not present. State OSHA plans continued to perform limited work, but because they received substantial funding from Federal OSHA, they were forced to curtail their operations.  

For example, OSHA runs a Consultation Program through State OSHA plans, which provides employers with free on-site safety and health assistance. Almost 500 businesses requested consultation services during the 2013 shutdown, all of whom were turned away.

Federal Contractors

Businesses that contract with the federal government were especially impacted by the 2013 shutdown. Over 10,000 stop-work orders for contracts were issued, which impacted the federal contractor community to a great extent. For example, contracts with the Department of Defense fell by almost one-third, and spending dropped 40% during the cessation of business. Payments to federal contractors were delayed during the shutdown, which led to widespread reports of contractors being forced to temporarily lay off employees, and also led to similar impacts on subcontractors who support the federal contract work. 

2018 could be worse—much worse, in fact. The federal government has ramped up its contractor program by funneling more work through outsourcing in the past five years, leading to more and more private companies relying on the federal government for their business. Federal contractors should consider the following:

  • How much of your work is considered “essential?” If your business supports essential operations, you may still be in business during a shutdown.
  • How much of your work is pursuant to a multi-year appropriation or no-year appropriation? Any such work may remain open during a shutdown.
  • Did you receive a stop-work order? If not, you should consider it to be business as usual, and recognize that you will be held accountable to continue your contracted assignment despite what you might hear on the news.

For now, we recommend you keep in close contact with your contracting official, who should be in the best position to update you about your work status leading up to and during any shutdown. If you do receive a stop-work order, make sure to document all of your work and expenses accrued during the shutdown, as the government might reimburse you for certain items once normal service is resumed.

Small Businesses

Small businesses will be hit very hard by a 2018 shutdown if 2013 is any example. Federal estimates concluded that 120,000 fewer jobs were created because of the problems associated with the 16-day impasse (delayed licensing and permitting, stalled projects, etc.), which stung smaller employers especially hard. The government reported that $140 million in small business loans were deferred during that period. If you are a small business, now is the time to enact any emergency plan you created to deal with a possible interruption of business.

Conclusion

These are just some of the ways we anticipate employers will be impacted by any federal government shutdown. If you have additional questions or concerns, be sure to consult with your Fisher Phillips attorney to fully understand how your business can be best positioned during this temporary closure.



HR Webinars
Making Your HR To-Do List & Checking it Twice for the New Year
December 13th, 2018 at 7:30am CST by Greg Grisham, David Jones, Courtney Leyes, Gabriel McGaha, Robert Ratton III, Martin Thompson, Jeff Weintraub

Terminations Got You Down? 5 Tips to Tighten Your Termination Tactics
December 17th, 2018 at 12:00pm CST by Brian T. Benkstein at Fredrikson & Byron

Unconscious bias - whether you realize it or not
December 18th, 2018 at 11:00am CST by Margaret A. Matejkovic, Esq. at Kastner Westman & Wilkins, LLC


HR Articles
MeToo, avoiding women, and the modified Mike Pence Rule
Carnac the Magnificent says – Politicussin
Non-competes for non-skilled – non-productive, non-legal, non-enforceable?
Discrimination CHARGE! – Step 3 Cause or no cause, because you gotta do something
Discrimination CHARGE! – Step 2 Go Kim Possible for the investigation phase
Discrimination CHARGE! – Step 1 Don't panic, ask questions
Depression – what can an employer do?
Employers beware - what you say can and will be used against you
Holiday stew – ingredients for a happy and non-litigious holiday
MO - The weed du jour - marijuana médicale
Biometrics in the workplace - not a measure of bios accumulated by an employee
Thanks-giving isn't just about turkeys - include the good employees too
The best "stay" to help you retain employees
Overtime, daylight savings time and circadian rhythyms
Controlling the political speech of buttons*
Cursing, surfing, weapons, gadgets – illegal, inappropriate or OK?
How to Ghostbuster a new hire or applicant
Election leave – employer's civic duty, migraine, or just wishful thinking (election, leave!)
Costumes, booze and the Great Pumpkin – beware the office Halloween party
Disability – Dr. or employee approved?
401(k) plan + payroll provider = 401k good things
Disability/pregnancy practices – what not to practice
Bad hire! Bad, bad hire!
TN – A drug-free workplace program is good
Open enrollment – personalizing perks pays off
Unpaid intern – depends on who benefits
The #1 office perk is . . . ?
FMLA leave before being eligible for FMLA leave
IL – Required expense reimbursement for your employees, not Bill Self
Help hiring holiday help here
Are the new DOL opinion letters like noses?
Public disclosure of confidential information is easier than you think
Bad mix – accommodation request and firing
If religious accommodation and a flu shot both equal angst, is that the transitive or substitution property?
Workplace shootings – 20 can-dos to prevent them
No call/no show shows. No what about it.
List 10 Up: Top tips for starting a workplace incident interview
Mr. Freeze unveils National Security Freeze tagline: "They can't steal your identity if it's frozen"
If it's called a dress code, can I wear pants?
I've changed my name – to Optimus Prime
TN: Conceal and carry means post to prohibit or permit
I'll take "ADA in 5s?" please Alex
Swearing at work – 7 rules
Is that red light flashing?
Four-legged office mates and the pawternity policies they benefit
Notice: notices and forms for FMLA that were already expired now updated virtually unchanged
Don't feel ripped off when you get ripped off – get even
School-related parental leave does not mean you forge a note from your kid
NY: Draft model sexual harassment policy/training released
Discipline - Demote - Depart or Communicate - Counsel - Channel
ICE audits II – FAQs to make you wiser
Round up stew: sick leave, harassment, non-compete, etc.
Identifying trade secrets does not mean figuring out how to barter better
ICE audits have nothing to do with freezer police
Being at work full time is not an essential function of a job?
List 10 up: Positive employee relations training: reap the benefits of engagement
Employment agreements – what to do before you do
Background checks of the future are continuous
Treating service animal requests (always treat the animal)
Prepare for saying "No" – you need to decide how to refuse service
List 10 up: What's the deal with employee handbook rules?
I cannot tell a lie . . . you're fired for cutting down the cherry tree
Milk Stork delivers for working mom's and their baby
Job tasks and essential functions under the ADA
Who are you? Why are you here? Personality testing?
No, you can't sleep on the job
Technology driving the hiring process
Should you give your employees a little Slack – or do they have enough already?
"We need to talk" isn't any easier to say than to hear
Bet employers must make: call and raise your minimum wage
Zero tolerance for "zero tolerance" policies
Ralph Waldo Emerson as a productivity consultant
PS: PTSD IRL*
Is the employee "disabled" under the ADA?
The six step DOL audit polka
PTO on the house!
New rules for work rules
Dr. Strangelabor or: How I Learned to Stop Worrying and Love the Millennial
Did Bartleby the scrivener write his own job description?
"Treating" disgruntled or bad behaving employees
Hiring under the age of 18
DO NOT LICK THE BRAIN! and other obvious stuff
Helping your employees save for emergencies
Right to bare arms in the workplace
#MeToo quiz
Under standing desks
How to approach an employee showing signs of cognitive decline
Dress codes should not be encoded
Foul language *
Rorschach, Horshack and Abednego
Don't ask a woman the gender of her child, especially. . .
Guidelines for a valid no-solicitation/no-distribution policy
All aboard the Love Train for long-term onboarding!
Gender and workplace bathrooms
No FMLA for pet's death
Personal hygiene in the workplace
Yes Virginia, there is a St. Patrick's Day in Ireland
Master the modern method for managing March Madness
Drug testing in The Office
Background checks
"Thank you" and "I'm sorry" – meaningful, simple and impactful
Michael Corleone HR tip for the day
S'not flu or it is, doesn't matter
Be prepared for ICE raids
Looking for employees: an untapped source of talent
Calling Dr. Love(less)
Non-exempt employees – what counts as wages?
HR is not a happy accident
Do new hires have to be a culture club fit?
Remote workers and telecommuting
When former employees ask for references
Model written lock out/tag out program
Wrong table cat
They might be giants . . . transforming healthcare?
Conducting internal I-9 audits
The Nebraska Chamber has issued a W-2 challenge to state taxpayers
The impact of super bowl(ing)
12 steps to handling violence in the workplace
Workplace retaliation: don't give in to the Dark Side
Would you really want to work with a bunch of yous?
What is the ADA?
Monty Python should not write your job descriptions
FMLA definitions
Unemployed or wear a bra – are those the only choices?
What "government shutdown" means for employers
An intern by any other name
FMLA - "leave" as in "leave the employee alone"
 “M,” “F,” Or “X”? Nonbinary Gender Designations in the Workplace
Sexual harassment – can't find it – what now?
Probationary periods
Employee contracts
Introverts
How to treat fringe benefits for employees
Attendance policies
Different repeal
Temporary and leased employees
Birthdays in the workplace
Needy employees
Holiday parties - acknowledge, avoid, assume (nothing)
Dress codes: who, what, wear
Punch clock
Nepotism: favoring relatives and friends in the workplace
Year-end performance reviews
Hiring interviews
The Form I-9 has changed… Again!
Service dogs at work
Bring your own gun
Social media
Year-end or holiday incentives
Arizona sick day policy
Paternity leave
HRsimple spotlight - Fiona Ong
Permissible post-accident drug testing
Paid family leave: a growing trend
Politics in the workplace: how to remain legally compliant during election season
Termination Series: Communicating the reason for discharge
It’s only a matter of overtime
Interview with attorneys at Kastner Westman & Wilkins
Valentine's Day heartaches around the office
Safety and health tips
Wearable technology
Favorite HR sites
Back to school time is here!
Vacation policies and time off
Interview with author J. Hagood Tighe
Non-compete agreements
Workplace romance
Holidays
Bullying in the workplace
Employment references
Telecommuting or remote (control) workers
Social media and employment
Performance evaluations
Breaktimes
Interview with attorneys at Wilson Worley PC
Interview with attorneys at Knudsen Law Firm
Interview with Kathy Speaker MacNett
Firing, a job to do right the first time
Job advertisement do’s and don’ts
Employee handbooks – getting a handle on your policies
Technology in the workplace
Interview questions: do's and don'ts
Employee personnel files