Government shutdown

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A partial government shutdown may soon be upon us.  According to the Washington Post, “[t]he White House and a number of federal agencies have started advanced preparations for a partial government shutdown, as President Trump and congressional Democrats appear unlikely to resolve their fight over a border wall before some government funding lapses at week’s end. ” Unlike past shutdowns, because Congress has already passed, and the President has signed, spending bills into law that apply to approximately 75% of government spending, a government shutdown will be far less extensive than those experienced in the past. If one occurs, the departments of the Interior, Agriculture, State, Housing and Urban Development, Treasury, Commerce, and Homeland Security would lose funding – and government contractors with existing contracts with those agencies could face a temporary loss of funding.

On October 1, 2013, the federal government shut down for the first time in seventeen years.  The last government shutdowns in 1995 and 1996 lasted a total of 28 days. 

Government contractors are already feeling the bite of the shutdown.  Within hours of the shutdown, government agencies and departments issued stop work orders, grinding work on government projects to a halt.  As such, government contractors are facing immediate issues regarding how to handle impacted workers while the shutdown continues and their work is on hold.

Preparation for the recent sequester familiarized government contractors with some of the issues they now face.  However, the shutdown implicates different issues than the sequester and solutions for one do not necessarily apply to the other.  With respect to the sequester, government contractors faced the possibility of canceled contracts.  In contrast, the shutdown should only result in a temporary suspension of government contracts that hopefully will be fully restored once the federal government reopens.

Contractors have been asking for input regarding how to handle employees impacted by the federal shutdown.  Although the discussion below is not comprehensive, it discusses many of the most significant employment-related issues.