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Private Employers/Employees Are Not Insulated From Government Shutdown

Last week, the Federal Government entered into its first partial shutdown in over seventeen years. Federal civilian workers woke up on Tuesday to an unclear future; over 800,000 were sent home until further notice on unpaid furlough.  In the event the Government cannot come to an agreement with regard to the debt ceiling in the next 10 days, there may be widespread economic ramifications for nearly every employer.  In the meantime, the partial Government shutdown is resulting in inconveniences for those in the private sector.

The shutdown of many Federal websites means that the E-Verify system, which allows employers across the country to check on immigration status, is not in operation. The offices of U.S. Citizen and Immigration Services (USCIS) are remaining open, so employers should still continue the I-9 process with all new employee hires.

If you are an employer and in need of a new small-business loan, then you are out luck; loans backed by the  Small Business Administration are not being processed. Employers who have contracted with the government are in a perilous condition. Federal contractors employ millions of people and attract more than $500 billion in annual awards. Each day that the government remains closed, costs will rise for these employers and their employees will wonder if they can continue their day-to-day operations.

The Equal Employment Opportunity Commission, Occupational Safety and Health Administration, and Department of Labor are all operating with a severely limited staff. There are still some services being provided by these entities, but for the most part, their operations have been grinded to a halt. Unemployment insurance and workers compensation claims will still be paid, but the Labor Department's investigations into wage theft allegations have ceased, as have most OSHA inspections. The EEOC will accept claims of worker discrimination, but they do not have the staff to currently investigate any of the claims made.

As federal employees struggle with the real consequences of the government shutdown, private employers will certainly encounter some ripple effects. The quicker that the government gets up and running again, the less severe these effects will be regardless of whether a partial resolution can be made with regard to the debt ceiling.

Services may be performed by others.

This article does not constitute legal advice.

Lexington, KYLouisville, KYFrankfort, KYFrankfort, KY: MML&K Government Solutions