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The Impact of the US Government Shutdown on Employers

HR Column
T he longest federal government shutdown in US history lasted 35 days, from midnight EST on December 22, 2018 until January 25, 2019. It was the second federal government shutdown involving furloughs during President Donald Trump’s first term. The shutdown occurred when Congress and Trump failed to agree on an appropriations bill to fund federal government operations for the 2019 fiscal year.

Central to the dispute was an impasse over Trump's demand for US$5.7 billion to fund the construction of a wall on the US-Mexico border. Before the shutdown, a Republican-controlled Senate unanimously passed an appropriations bill that did not include federal funds for the wall.

It appeared likely that the Republican-controlled House of Representatives would approve the bill. On receiving heavy criticism from some right-wing media outlets for backing down on his campaign promise, Trump announced he would not sign any appropriations bill that did not fund the wall. Under threat of a Democratic filibuster, the Senate blocked a stopgap bill passed by the House with funding for the wall.

Overseen by the US Government Accountability Office, the Antideficiency Act prohibits federal agencies from expending federal funds absent an appropriation, and from accepting voluntary services. The shutdown ended when, after contentious negotiations, Trump endorsed a stopgap bill to reopen the government for three weeks until February 15.

To avert a second shutdown thereafter, Congress passed a spending bill which included US$1.38 billion for construction of a new wall. Trump then declared a national emergency to leverage additional funds from military-construction projects and other federal sources to make up the shortfall.

The shutdown’s overall impact

The shutdown impacted an estimated 800,000 employees in approximately nine federal agencies, including the Departments of Agriculture, Commerce, Justice, Homeland Security, Housing and Urban Development, Interior, State, Transportation, and Treasury. Other departments such as the Department of Labor (DOL), National Labor Relations Board (NLRB), and the Department of Health and Human Services (HHS), previously received funding through September 2019, and continued operating through the partial shutdown.

Impact on the Department of Justice

Department of Justice (DOJ) lawyers were furloughed during the shutdown, impacting litigation involving the federal government. When the shutdown began, the DOJ’s contingency plan included allowing its lawyers to seek stays on civil cases and deadlines until the shutdown ended, to the extent possible without materially compromising the cases.

Impact on the Department of Labor (DOL)

Employer audits, wage and hour investigations, and related litigation were not impacted because the DOL was fully funded at the time of the shutdown. Notwithstanding, some courts suspended litigation involving the US government as a party.

The DOL’s Office of Foreign Labor Certification continued to process permanent labor certifications, applications for temporary labor certifications, labor condition applications, and prevailing wage requests. Employers may have experienced processing delays due to a high volume of H-2B applications.

Impact on immigration

The US Citizenship and Immigration Services (USCIS) adjudicates most immigration processes. It relies on filing fees that accompany petitions, and many of its services, along with other sub-agencies of the Department of Homeland Security (DHS), were not affected.

Employers that use the E-Verify system, an online platform that verifies employee work authorizations for jobs in the United States, were negatively impacted. The US Citizen and Immigration Services relieved some of the deadlines applicable to employees being processed through the system.

Impact on the EEOC

The Equal Employment Opportunity Commission (EEOC) significantly scaled back its staffing, issuing a contingency plan with limited services during the shutdown. Claimants could submit claims but EEOC staff were unavailable to answer questions, charges would not be investigated, the EEOC would not litigate or mediate, and FOIA requests were not processed. Employers may therefore see an anomalous short-term increase in claims as the EEOC resumes momentum.

Other unaffected offices

The Occupational Safety and Health Administration (OSHA), Office of Federal Contract Compliance Programs, and the National Labor Relations Board (NLRB) operated during the shutdown.

Conclusion

After Trump declared a national emergency to appropriate federal funds from alternative sources to fund the border wall, 16 states led by California (Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Virginia) filed suit to challenge the president’s move. Employers should keep a close eye on this litigation and assess the potential impact of court decisions as the cases unfold.

About the Author

Spiwe L. JeffersonSpiwe L. Jefferson is general counsel of ChristLight Productions Ltd., LLC, Patron Fellow of the American Bar Foundation, and board secretary and legal advisor to The BrandLab. She is a member of the ACC employment and labor, law department management, and litigation networks.


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