Navigating the U.S. Government Shutdown: What HR Professionals Need to Know

The U.S. government shutdown on October 1^st presents a range of challenges for employers, especially those with federal contracts or regulatory dependencies. Here's a practical guide for human resources (HR) professionals to manage this period effectively.

Immediate Impacts on Employers

• Federal Agency Disruptions: Most non-essential government services are halted. Agencies like the Equal Employment Opportunity Commission (EEOC), National Labor Relations Board (NLRB) and Department of Labor (DOL) will significantly reduce operations. As a result, there will be delays in investigations, hearings and regulatory approvals. The Occupational Safety and Health Administration (OSHA) and the Mine Safety and Health Administration (MSHA) will only continue to provide critical safety functions.

• Federal Contractors: Contractors may receive stop-work orders. Employers should consult their contracting officers immediately to assess contract status and obligations. Unlike federal employees, retroactive pay for furloughed contractor employees is not guaranteed.

• Immigration and E-Verify: The U.S. Citizenship and Immigration Services (USCIS) continues most operations because it’s fee-funded. However, services relying on appropriated funds, like E-Verify, are suspended. Employers must still complete Form I-9 within three business days, but E-Verify deadlines may be temporarily relaxed.

HR and Compliance Considerations

The shutdown will affect HR teams and trigger compliance considerations, including:

• Furloughs and Pay: Non-exempt employees are only paid for hours worked; no pay is required for furlough days. Exempt employees must be paid full salary for any week they perform work—even if only for one day. Employers may require the use of accrued paid time off (PTO) or vacation time during furloughs but must ensure policies and contracts allow it.

• WARN Act: The federal Worker Adjustment and Retraining Notification (WARN) Act requires a 60-day notice for mass layoffs or plant closings. Temporary furloughs under six months typically do not trigger WARN but state micro-WARN laws (e.g., in California) may still apply.

• Benefits and COBRA: Employers should review health plan terms to determine if furloughs trigger Consolidated Omnibus Budget Reconciliation Act (COBRA) eligibility. Changes in hours or employment status may affect coverage.

• Unemployment Eligibility: Furloughed employees may qualify for unemployment benefits, depending on state law. Even partial-week furloughs can trigger eligibility in some states.

Agency-Specific Contingency Plans

Below is a list of agencies and their contingency plans during the shutdown:

• Equal Employment Opportunity Commission (EEOC): No new investigations or mediations will take place. Only docketing and litigation without continuance will proceed.

• NLRB: Case handling and elections are paused. Only emergency actions continue.

• DOL: Most divisions are paused except for imminent safety threats.

• USCIS: Will continue core services but may experience delays due to inter-agency dependencies.

Employer Action Steps

Here are steps that employers and HR teams can take during the shutdown:

• Review contracts and handbooks for furlough, pay and leave policies.

• Communicate clearly with employees about expectations, pay and benefits.

• Consult legal counsel before implementing furloughs or layoffs.

• Monitor agency updates and SHRM’s Government Shutdown Resource Hub for evolving guidance.

The isolved HR Services team will continue to monitor developments related to the shutdown and provide updates as they come in.

References and Resources

• The National Law Review

• Fisher Phillips

• Jackson Lewis

• RN Law Group

^{Disclaimer: The information provided herein is for general informational purposes only and is not intended to be legal, investment or tax advice. It is not a substitute for professional legal, investment or tax advice, and you should not rely on it as such. No attorney-client or accountant-client relationship or any other kind of relationship is formed by any use of this information. The effective date of various provisions, amendments, and regulatory guidance may impact eligibility. The accuracy, completeness, correctness or adequacy of the information is not guaranteed, and isolved assumes no responsibility or liability for any errors or omissions in the content. You should consult with an attorney, investment professional or tax professional for advice regarding your specific situation.}