3 Considerations Before a Future Closure

The Federal government shutdown that ended on Friday, January 25 was officially the longest in history. The shutdown’s impact is still being felt at staffing agencies in the greater Washington, D.C. area and across the country. Approximately 380,000 Federal employees were furloughed and an additional 420,000 employees were working without pay. The government shutdown also meant services that employers rely on, like E-Verify, were no longer available, and pay for existing government contracts was on hold.

While the government has reopened, a possible shutdown could occur again after the short-term funding bill expires on February 15, 2019. Concerns continue around contractor placements, payments and the E-Verify lapse. Government departments like the Internal Revenue Service (IRS) are struggling to catch up following the closure. The IRS has a backlog of 5 million unanswered pieces of mail and the Washington Post reports it could take the IRS between 12 and 18 months to catch up.

Given ongoing uncertainty around the reopening, these are some considerations for businesses to keep in mind.

E-Verify is back online and employers must take action by February 11.

Employers use EVerify to confirm that a new hire is eligible to work in the United States. E-Verify compares information submitted on an employee’s Form I-9 with information on file with the U.S. Department of Homeland Security (DHS) and Social Security Administration (SSA). E-Verify services went offline on December 22, 2018, which meant companies could not confirm employee-eligibility or resolve outstanding Tentative Non-Confirmations (TNCs).

Now that E-Verify is back online, employers have until February 11, 2019 to create cases for employees who were hired while E-Verify was not available. Any employee hired after the government reopened is still subject to the usual 3-day time window.

During the shutdown, employers were required to continue completing the Form I-9 process; however, the following rules were in place:

  • The “three-day rule” for creating E-Verify cases was suspended.
  • The time period for resolving TNCs was extended. The number of days E-Verify is down will not be counted against the TNC period.
  • Employers may not take adverse action against an employee because their E-Verify case is in an “interim case status” during the E-Verify lapse.

 Temporary placements increase– with some turning permanent.

In the absence of regular paychecks, some contractors and furloughed workers turned to staffing firms for temporary placements. For companies in need of contractors, this is a unique opportunity to connect with expert talent that would otherwise be unavailable. Following the shutdown, some contractors have chosen to stay on at their temporary placements. The IRS, for example, lost an estimated 25 IT staffers each week of the shutdown to alternate, full-time positions.

Understandable, a shutdown is a difficult time for furloughed employees. Should a shutdown occur again, temporary placements must be arranged with sensitivity to employees’ work situations. Some government employees may also face restrictions on the type of outside work they can seek. Working with an experienced staffing agency is important for sidestepping these complications and ensuring a smooth placement, whether this placement ends up being for a week, a month or longer.

Government contract payment resumes.

If your company relies on payments for government contracts to make payroll, you may have faced your own capital challenges during the shutdown. Staffing firms that contract with the government, for example, are still responsible for paying their contractors during a shutdown – even if these firms are not receiving their typical compensation from the government. Even though the government has reopened, companies that rely on government contracts may still be experiencing cash flow crunches or be hesitant to take on additional employees given the ongoing uncertainty.

Was your company impacted by the government shutdown or taking proactive measures to prepare for another possible closure? Let us know how you handled the shutdown in the comments below.

 

 

 


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