As the federal government shutdown passes the three-week mark with no resolution in sight, private employers face increasing uncertainty regarding compliance matters. While enforcement has paused, employer obligations have not. In this alert, we summarize the current impact of the government shutdown from an employment compliance perspective and suggest best practices for employers.
Federal Agencies Operating at Minimal Capacity
The federal employment agencies are now focusing only on essential operations, with contingency plans suggesting that the vast majority of staff have been or will be furloughed. For example, the Equal Employment Opportunity Commission (“EEOC”) has furloughed or will furlough 95% of its workforce, keeping only 128 employees of its roughly 1,814 total staff. New discrimination charges are being docketed to preserve filing deadlines, but the EEOC will not begin new investigations, conduct mediations or hearings, or process Freedom of Information Act requests during the shutdown. Employers should expect significant backlogs once operations resume and paused investigations come back online.
According to its contingency plan, the Department of Labor expects only 3,141 out of 12,916 employees to continue working during the shutdown. Most regulatory and enforcement activities at the Wage and Hour Division have ceased, except for those involving health and safety, such as child labor violations. Standard investigations, compliance audits, and technical assistance are paused. The Office of Federal Contract Compliance Programs, which audits federal contractors for bias against disabled workers and veterans, has suspended operations completely.
The National Labor Relations Board (“NLRB”) is “closed” and is only engaging in “such government activities necessary to prevent an imminent threat to the safety of human life or the protection of property.” There will be no processing of new representation petitions, all union elections and administrative hearings are postponed, and all case handling, investigations, and public outreach are halted. The Board has tolled all filing deadlines, meaning they are paused and will resume only when the shutdown ends.
Similarly, Occupational Safety and Health Administration (OSHA) operations are limited to critical functions such as inspections of imminent danger situations and investigation of workplace fatalities. All programmed inspections, compliance assistance, training classes, rulemaking, and outreach programs have ceased.
Finally, employers with immigration matters are facing acute impacts from the shutdown. The E-Verify website was offline for approximately one week, and while that program is now back online, the Office of Foreign Labor Certifications has suspended operations, halting H-1B labor condition applications and PERM processing for employment-based green cards, among other things.
Federal Courts Face Funding Crisis
Beginning on Monday, October 20, 2025, the federal judiciary announced that it no longer has funding to sustain full, paid operations. Federal courts are now maintaining only limited operations, although federal judges will continue to serve in accordance with the Constitution. The Case Management/Electronic Case Files (“CM/ECF”) system remains in operation for electronic filing of documents, and case information remains available on PACER.
Individual courts are handling cases differently — some district courts have automatically stayed all civil litigation involving government lawyers, while others are proceeding case-by-case. Employers with pending federal litigation should consult their specific court and judge websites for updates.
Strategic Recommendations
While enforcement activity is slowed during the shutdown, employers should remember that legal obligations have not changed. For employers planning workforce reductions, remember that federal and state WARN Act obligations remain in effect — mass layoffs or extended furloughs require 60 days’ advance notice, with limited exceptions for unforeseeable business circumstances.
Now may even be a good time for some compliance-related housekeeping, such as conducting internal compliance audits of wage and hour practices, reviewing discrimination complaint procedures, and ensuring workplace safety protocols meet OSHA standards. Documenting compliance efforts during the shutdown may be more important than ever as agencies will likely face enormous backlogs and may be particularly alert to opportunistic non-compliance by employers’ actions during the shutdown period once government operations resume.
Looking Ahead
As this shutdown continues with no clear end date, employers should prepare for significant delays in government services lasting weeks or months beyond the shutdown’s conclusion. Agencies will face unprecedented backlogs, and response times for investigations, certifications, and adjudications will likely extend far beyond normal processing periods. Proactive compliance, clear documentation, and strategic planning during this pause will position employers for success when federal operations fully resume.
For assistance navigating shutdown-related employment issues, please contact a member of AGG’s Employment team.