Takeaways

• A government shutdown on Oct. 1 may trigger WARN Act, wage and hour, union, and other compliance challenges for federal contractors.
• Exempt pay, PTO, benefits, unemployment, and immigration rules require careful consideration and compliance.
• Clear, timely communication with employees is essential to maintain morale and reduce confusion.

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Article

A government shutdown looms at 12:01 a.m. on Wednesday, Oct. 1, when the current government funding expires. Appropriations bills that fund government operations are not expected to pass before the start of the new fiscal year.

The employment and labor law concerns that a government shutdown raise for federal contractors include compliance issues with the Worker Adjustment and Retraining Notification (WARN) Act and wage and hour law, the impact on employee benefits and immigration status, and labor union and collective bargaining agreement issues. A plan for timely and effective communications with employees on these matters is equally important for employers.

WARN Act Issues

Under the federal WARN Act, a covered “employer” that orders a “mass layoff” or a “plant closing” must provide at least 60 days’ advance written notice to affected non-union employees, union representatives, and certain government officials. Whether a “plant closing” or a “mass layoff” will occur depends on the work location and whether the requisite number of employees who work at that location will suffer “employment losses.”...

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