What Can Employers Expect as the Government Shutdown Continues

The federal government has been shut down for almost a month with no end in sight — so far, the second-longest shutdown in United States history. An estimated 750,000 federal workers have been furloughed, and many essential workers are working without pay. During the shutdown, government-funded federal agencies have completely halted or significantly reduced their functions to only the most essential.

While the impacts of the shutdown can be felt in everyday life, from airport delays, closures of national parks and museums, and the impending potential suspension of benefits provided by the Supplemental Nutrition Assistance Program (SNAP),[1] they can also have a far-reaching effect on private businesses who rely on federal agencies for services, are federal contractors, or regularly interface with various federal agencies, including the Department of Labor, Equal Employment Opportunity Commission, the National Labor Relations Board, and the federal judicial system.

According to research conducted by the Society for Human Resources Management (SHRM), a shutdown lasting more than 28 days is estimated to impact 88% of private organizations’ ability to manage day-to-day operations and 80% of private organizations’ ability to meet yearly financial goals.

Here we will break down some of the effects felt by private businesses as a result of the shutdown, but the general takeaway is to expect and plan for continued disruption and delays both during the shutdown and once the federal government is back up and running. Once the shutdown ends,  various agencies and departments will need time to start functioning again and process any backlog. The return to normalcy after a shutdown of this length will likely take quite some time and the effects will linger into 2026.

Federal Contractors

Employers who have federal contracts can likely expect late or delayed payments and project delays and disruptions, which may result in the need to furlough or lay off employees. Delayed payments can make it difficult for some employers to pay subcontractors or employees, which can raise various legal issues, including potential litigation or considerations under the Worker Adjustment and Retraining Act (WARN) or similar state laws, depending on the size of the layoffs.

Department of Labor (DOL)

The DOL has limited its enforcement and regulatory efforts but has continued to pursue essential activities. However, as laid out in the DOL’s contingency plan, updated on October 10, 2025, the work performed by many of the DOL’s subagencies, such as the Bureau of Labor Statistics and the Office of Federal Contract Compliance Programs, has been paused.

The DOL also has suspended many of its immigration activities, which include processing Labor Condition Applications, Permanent Labor Certifications, and Prevailing Wage Determinations, which can halt progress on temporary work visas or green card applications.  

Relatedly, the E-Verify system, which is funded by the federal government, is unavailable during the shutdown, so employers will be unable to initiate queries, access cases, or resolve tentative nonconfirmations. But Immigration and Customs Enforcement (ICE), which is responsible for conducting I-9 audits and raids, will continue to operate and may subject employers to additional scrutiny, especially because employers still remain liable for I-9 violations and any unauthorized employment during the shutdown.

Equal Employment Opportunity Commission (EEOC)

The EEOC has reduced its workforce by over 90%, but, according to its contingency plan, it will continue to accept and screen new charges and pursue cases as necessary to “ensure that no private sector charging party loses their right to file a timely charge of discrimination.” This means, among other things, that the EEOC will continue to litigate cases where no extensions have been granted. The EEOC has halted work on conducting new investigations, scheduling and conducting mediations and hearings, and responding to requests for information or requests under the Freedom of Information Act.

Once the EEOC reopens, employers may begin to receive right-to-sue notices as their first notice of a charge filed during the shutdown or shortly beforehand. It will also take some time for the EEOC to resume normal operations and address pending matters, including scheduling mediations or hearings, that were paused during the shutdown. This could result in an influx of new litigation in the new year, especially since September, the month before the shutdown began, is a historically high-volume filing month for the EEOC.

National Labor Relations Board (NLRB)

In accordance with its contingency plan, the NLRB has paused nonessential operations, such as case handling, outreach, and public affairs. It will only continue to pursue claims where necessary to preserve rights that may be extinguished by delay. In the past, the shutdown would also mean that the NLRB’s ability to issue decisions would be frozen as well, but because the NLRB has been without a quorum since the beginning of 2025, this NLRB function has not been affected by the shutdown.

Occupational Safety and Health Administration (OSHA)

OSHA continues operating to respond to imminent threats to human life, workplace fatalities and catastrophes, and other essential or imminent concerns. But it has paused most workplace inspections and suspended activities related to compliance assistance, outreach programs, training, technical assistance, and rule-making activities. State-specific occupational safety and health agencies will continue to operate during the shutdown.  

Department of Justice and Court System

Employers with pending civil cases in federal court may face delays in the resolution of those cases as a result of a reduction or backlog in the federal judiciary’s operations. The federal courts have been without funding for full, paid operations since October 20, 2025, and have maintained limited operations to perform constitutional functions. When the federal courts reopen, it will likely take some time to resume normal operations and resolve any backlogs created by the shutdown, meaning it may take slightly longer for civil cases to reach a resolution.

Criminal cases, however, which are considered essential to human safety, will continue to be processed by the Department of Justice.

Tips Going Forward

• The shutdown has not suspended an employer’s obligation to comply with its federal obligations, such as I-9 compliance or compliance with OSHA standards, and employers should ensure continued compliance with federal regulations, obligations, and requirements.
• While dealing with potentially unpredictable situations, be proactive and anticipate and address issues before they arise. Seek legal counsel when necessary to help understand employee rights or other legal issues.
• Prepare to address concerns with employee morale and communicate openly with employees about the impacts on business or employees caused by the shutdown.
• Expect and prepare for any backlog to be processed once agencies begin working after the shutdown is resolved and for continued delays for some time as operations return to normal.

Notes

[1] Some of the impacts from the government shutdown can have significant impact on employees personally and employee morale, especially heading into the end of the year and holiday season. Employers who may have employees impacted by the loss of SNAP benefits should consider collecting information on local resources to make such information readily available for employees who may need assistance. Employers who have the resources may also consider providing supplemental assistance to employees if possible.