The federal government shutdown is now entering its third week.  Although there are some hopeful signs here in Washington that an agreement that will allow the federal government to reopen will be reached, it is unclear when a deal will be forged. 

This political tug-of-war has left many government contractors in limbo.  Already facing stop-work orders and lost revenue, many government contractors that had hoped short-term, stopgap measures would get them through a brief shutdown are facing the tough employment law realities arising from a protracted government shutdown with no definitive end in sight.

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.