How Will the Federal Government Shutdown Affect You?

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With Congress failing to reach a compromise on the Continuing Appropriations Resolution of 2014 and approve Federal spending guidelines, the government was forced to shut down on October 1st.

Roughly 800,000 federal employees have been furloughed and are not working. However, 1.3 million federal employees have been designated as ‘essential employees’ are continuing to work throughout the shutdown, but will likely face indefinite paycheck delays. Additionally, overall economic worries are surfacing as IHS Global Insights, an economic consulting firm, has reported the United States economy will lose roughly $1.6 billion each week the government is shut down – approximately $12.5 million per hour.


While all of this is important to the economy, one question that remains is– how will this federal shutdown affect you?

Small business loans

As a result of the shutdown, the Small Business Administration (SBA) is unable to initiate new loan guarantees, which thousands of small businesses depend on. In fact, within the last four years alone, the SBA has provided $106 billion in loans to nearly 200,000 small businesses, according to the Washington Post.

Depending on how long the shutdown lasts, the lack of new loan guarantees may directly impact many small businesses’ are able to hire new employees. Pepperdine University’s Graziadio School of Business and Management recently conducted a survey of 1,387 small business employers and found that 41 percent of respondents will be unable to hire as many new employees as planned if the shutdown occurs for three months or more—a vital part of the U.S. job market

Government Contract employment

The National Association of Government Contractors also released a survey regarding the impact the shutdown will have on contractors’ employment options. According to the survey, 29 percent of participants will need to delay their hiring as a direct result of the shutdown, and 58 percent believe the shutdown will negatively influence their business operations. Even if the shutdown only lasts for a week, the National Federal Contractors Association believes 250,000 to 300,000 contract employees will be impacted in one way or another.

Social Security Administration

The Social Security Administration (SSA) is also affected by the government shutdown as some employees have been furloughed. Due to a reduction in staff, the SSA will only be able to conduct essential services, such as beneficiary check issuance.

As a result, the SSA is unable to field social security card replacements or applications. Additionally, new hearings for disability cases will also not be scheduled and new disability application processes may be delayed. Consequently, employers will likely be unable to complete I-9 forms until the shutdown ends.

Department of Labor shutdowns

A majority of the Department of Labor’s agencies are closed including the Wage and Hour Division and the Occupational Health and Safety Administration (OSHA), and the Employment and Training Administration. Applications for temporary (and permanent) employment certification, labor condition applications, and applications for prevailing wage determination will not be processed or even accepted during the shutdown.

Another noticeable byproduct of the shutdown was the lack of a BLS jobs report on the first Friday of October. Employment reports will not be released until the government reopens.

E-Verify usage

The Department of Homeland Security’s E-Verify program, an essential service for employers interested in reviewing the legal immigration status of potential employees, is also closed during the government shutdown. Employers will not be able to enroll in the program, or interrogate new or prospective employees until the shutdown ends.

Passports and international travel

If employees must acquire passports to travel internationally for business purposes, they should be able to apply during the shutdown as long as the State Department maintains its necessary fees. However, a delay in processing is very possible.

Audits and taxation

In the midst of the shutdown, businesses must continue to file federal tax returns and pay their taxes. However, the Internal Revenue Service has suspended audits until the shutdown concludes.

With so many Federal offices and programs having a direct impact on how businesses operate and the overall workforce, it’s no wonder that the nation is watching Congress closely. Business and consumer sentiments weigh heavily in fiscal well-being, making the shutdown a huge piece of the economic confidence puzzle. While it’s still unclear when the Federal government will re-open, one thing is certain– all eyes are on Washington.

Is the shutdown affecting you personally? How is it impacting your business? Tell us in the comments!

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