News & Events

Federal Government Shutdown: Employer Issues

Submitted By Firm: Michael Best & Friedrich LLP

Contact(s): Jose A. Olivieri, Scott C. Beightol


José A. Olivieri, Kelly M. Fortier and Carlos R. Pastrana-Torres

Date Published: 10/3/2013

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Effective October 1, 2013, the United States government has partially shut down its agencies and services. The shutdown is the result of Congress’s failure to pass an appropriations bill by midnight September 30, the expiration date of the latest continuing resolution appropriating funds for federal agencies.


The lack of funds for federal agencies entails a large-scale reduction in government services. This greatly affects private sector employers as most are subject to the jurisdiction of federal agencies. The longer the shutdown lasts, the more employers will be affected. Agencies and services affected by the shutdown include the following:

  • The Department of Labor (DOL): The DOL will continue to operate, but at significantly reduced staffing levels. More than 13,000 of the DOL’s approximately 16,000 employees will be furloughed. This massive staff reduction will cause the temporary postponement of all hearings and appeals, as well as all non-emergency OSHA inspections and wage and hour audits.
  • Equal Employment Opportunity Commission (EEOC): The EEOC is currently closed but has indicated that it will accept charges that must be filed in order to meet statute of limitations requirements. Charges will not be investigated during the shutdown. EEOC litigation will be suspended unless needed on an emergency basis or if case continuance has not been granted by the court. EEOC mediations and education events will also be cancelled.
  • E-Verify: The E-Verify system is unavailable due to the shutdown. While E-Verify is unavailable, employers cannot access their E-Verify account and will be unable to verify employment eligibility, view or take action on any query, or run reports. The “three-day rule” for E-Verify cases is suspended for cases affected by the shutdown. Employers are still required to complete the Form I-9 no later than the third business day after an employee starts work. Employees are also unable to resolve Tentative Nonconfirmations (TNCs) at this time. The deadline for employees to resolve TNCs will be extended however. Federal contractors subject to the federal contractor E-Verify rule should contact their contracting officer to inquire about extending deadlines.
  • The National Labor Relations Board (NLRB): The NLRB will also reduce its staffing levels significantly, furloughing 99% of its workforce. All pending representation elections are postponed. All hearings at the NLRB have been cancelled, and will not be rescheduled for hearing until the shutdown ends. Any case-related deadlines that occur during the shutdown are suspended, and must be recalculated by the parties on the basis of how long the shutdown eventually lasts. Parties must engage in good-faith efforts to resolve any disputes regarding deadlines, without requiring the intervention of the NLRB. Note that services of the Federal Mediation and Conciliation Service (FMCS) have also been suspended.
  • The Affordable Care Act: The Affordable Care Act’s state-run exchanges opened on October 1, 2013, as set forth in the Act. President Obama has categorically stated that this process will in no way be affected or delayed by the shutdown.
  • Unemployment benefits and entitlement programs like Medicare and Social Security will continue, in spite of the shutdown. Employers must continue to comply with any applicable program requirements, and must appear for any scheduled hearings.


The shutdown also affects the following federal agencies with immigration-related responsibilities:

  • United States Citizenship and Immigration Services (USCIS): USCIS will continue to accept and process applications and petitions. Delays in processing applications presented at the United States border and at border crossings are expected due to staffing cuts at U.S. Customs and Border Protection.
  • DOL’s Office of Foreign Labor Certification (OFLC): OFLC’s employees are also in furlough status. OFLC will not process or accept for processing immigration-related applications including PERM labor certification applications, Labor Condition Applications for H-1B filings, and Prevailing Wage Determination requests.
  • Department of State (DOS): DOS expects consular operations in the United States and abroad to remain functional as long as there are sufficient fees to support operations. Visa issuance is expected to could continue, as several visa application processes are fee-based and not fully dependent on federal funding. However, the shutdown of ancillary consular operations may affect the delivery of visa services, and cause visa processing delays or interview cancellations.


It is not clear at this time if and how the shutdown might impact any applicable statutes of limitation for claims that could be filed with federal agencies. What seems certain, however, is that all applicable federal labor, employment and immigration laws and regulations remain in effect, and employers must continue to comply with them. Federal courts will continue to operate for the time being, and the Supreme Court will continue to operate when it opens October 7, 2013, as it did in previous shutdowns.


We will continue to monitor the government shutdown, and update our clients on further developments, as necessary.


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