Government shutdown has wide-ranging effects

Today’s government shutdown will be felt among not only federal employees but also private-sector employers.

According to the Society for Human Resource Management (SHRM), about two out of three businesses’ operations would be affected by a shutdown lasting more than a week.

Key developments impacting the business world include:

• The E-Verify system is not available.
• Federal agencies are scaling back their enforcement efforts and/or pausing planned regulations.
• Federal contractors may see their contracts paused or even withdrawn.

E-Verify is offline

E-Verify is a web-based program operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA) that allows participating employers to electronically verify the information provided by employees on the Form I-9.

E-Verify is not available during the shutdown because of the lapse in DHS appropriations and because its statutory authority was not renewed.

Employers will not be able to access their myE-Verify accounts, Self Check, Self Lock, Case History and Case Tracker. Customer support services also will not be available.

Nevertheless, employers still are required to complete and retain the Form I-9 within the required time (generally, within three business days of the employee’s first day of work for pay) for every person they hire during the shutdown.

Employers using the alternative procedure authorized by the DHS may continue to remotely examine employees’ Form I-9 documents as long as they remain enrolled in good standing in E-Verify during the shutdown.

However, employees cannot resolve E-Verify Tentative Nonconfirmations (mismatches) during the shutdown. The DHS said it will extend the time period during which employees may resolve mismatches – i.e., the number of days E-Verify is not available will not count against the number of days employees have to begin resolving mismatches.

Employees with a Social Security Administration mismatch must wait until E-Verify resumes operations to visit an SSA office; and employees with a DHS mismatch must wait until E-Verify resumes operations to contact DHS.

Federal agencies scale back

Several federal agencies are affected by the shutdown, including:

• The US Department of Labor (DOL) plans to continue monitoring and responding to imminent threats to human life; investigating child labor and mine safety violations; and conducting workplace inspections in high-hazard industries. But the DOL will halt many of its other key activities, including its technical assistance, compliance assistance, research and regulatory efforts. Planned regulations that could raise the salary threshold for overtime-exempt employees, loosen independent contractor classification, amend the tip credit, address the classification of companionship service providers and clarify the standard for joint employment are on hold.
• The US Equal Employment Opportunity Commission (EEOC) plans to accept charges that must be filed in order to preserve the rights of a claimant, but it will not investigate these charges unless it is necessary to protect life or property. It also will continue to litigate lawsuits where a continuance has not been granted.
• The National Labor Relations Board (NLRB) plans to continue taking legal actions that are necessary to protect ongoing cases and monitoring its Office of Inspector General Hotline. However, it will stop docketing representation case petitions and unfair labor practice charges.

Federal contractors face challenges

Federal contractors may confront a pause in funding or even a stop-work order during the government shutdown. As a result, contractors may consider furloughing or laying off employees.

In the case of furloughs, special attention should be paid to wage and hour compliance. As a general rule, salaried, exempt employees must be paid their full salary for any workweek during which they perform any work.

Federal contractors also should check to see if they need to provide advanced notice of changes in pay or meet final paycheck requirements.