Connie N. Bertram, co-head of Proskauer’s DC Labor and Employment practice and co-head of the Government Regulatory Compliance and Relations Group, was interviewed by Metropolitan Corporate Counsel regarding the impact of the government shutdown on government contractors and the steps contractors should take in preparation for another possible
After more than two weeks, the federal government shutdown finally ended late in the evening on October 16, 2013. Although the end of the shutdown is great news for federal employees and government contractors, the last three weeks have forced many government contractors to take emergency steps as a result of the economic impact caused by stop-work orders, delays, and temporary work suspension.
In previous client alerts on October 4 and October 15 Proskauer discussed the legal issues government contractors were facing due to the government shutdown, including FLSA and wage and hour considerations, leave policies, the WARN act, the temporary suspension of the E-Verify system, the closure of the OFCCP, unemployment benefits, COBRA benefits, and the impact of the shutdown on foreign workers.
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.