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Government Shutdown: What IEC Members Should Know

Posted in: Announcements, Legislative Updates

Late into the evening on Monday, the United States Congress failed to reach an agreement on legislation to fund federal agencies by the September 30 appropriations deadline before the start of Fiscal Year 2014, leading to a government shutdown effective at midnight on October 1. In contention was House Republican language tacked on to a short-term spending resolution that would defund President Obama’s health care bill, which the Democrat-controlled Senate stripped in its consideration of the measure. Republicans countered with a one-year delay of only the “individual mandate” of Obamacare which was again defeated by the Senate, assuring government closures and furloughs Tuesday morning.
 
As a result, nearly 800,000 federal workers deemed to be “non-essential” are estimated to be furloughed today – some told not to report to work, and others serving without pay – leading to widespread shutdowns and delays across the federal government.
 
Following is a list of impacted agencies, services, and activities that IEC members should be aware of:
 
Federal Contracts
Contractors working on federally-funded construction projects can expect to see a significant and immediate impact, with notices halting further work on a number of projects to be issued from their contracting agencies. According to a Department of Homeland Security memo obtained by the Washington Post, “certain existing contracts may be stopped, reduced in scope, terminated, and partially terminated.” There are no public details at this time of which contracts will be honored during the shutdown and which will be suspended.

In instances where the government will not permit a contractor to proceed with work on a project, contractors may wind up on-the-hook for damages such as idle labor or equipment costs, unabsorbed overhead, and lost profits as a result of the Sovereign Act Doctrine, according to law firm Smith Currie & Hancock:  “The doctrine provides that, when the federal government interferes with the performance of a contract to which it is a party, the government will not be liable for breaching the contract if the action causing the interference was taken in the national interest and had a public and general application.”  The congressional impasse on appropriations could qualify suspended contracts under the Sovereign Act.  
 
In some contracts, the government may have agreed to assume the risk of damages incurred or will have preemptively issued a stop order in anticipation of the shutdown to protect contracted companies in advance. IEC recommends that members with active contracts with the federal government contact their contracting officer for guidance. 
 
That said, many contracting officers will not be available during the shutdown, so there may be delays or an inability to process contractor invoices at this time. The Department of Labor speculates that payments may not be made until after the government reopens, even if a contract has sufficient funding to allow continued contractor work during the shutdown.

The Office of Federal Contract Compliance Programs (OFCCP) will also be entirely shut down, with all employees furloughed.
 
Department of Labor
OSHA

OSHA will temporarily cease all operations except for those which relate to “emergencies involving the safety of human life or protection of property.” While OSHA’s guidance states that the agency will still respond to safety and health complaints which involve potentially hazardous conditions that “present a high risk of death or serious physical harm,” it is expected that most if not all workplace inspections will be halted. Activities related to OSHA Alliances are also suspended at this time.

DOL Wage and Hour Division
The Wage and Hour Division has suspended all operations.

Unemployment Benefits
While the federal government will continue to make Unemployment Insurance (UI) benefits available to states, several state agencies have issued warnings that they could stop cutting checks to recipients if the shutdown lasts into next week.

Office of Apprenticeship (OA)
OA will not be able to accept the registration of apprentices or programs during the shutdown. Apprentices who complete an apprenticeship during this time will experience delays in the receipt of their certificates of completion, which could impact their wages and prohibit them from taking a licensing examination in states that require a completion certificate.

During the shutdown, the Registered Apprenticeship Partners Information Data System (RAPIDS) will be deactivated, causing a backlog in reporting data on apprenticeship programs by IEC chapters and prohibiting them from retrieving data from the site.

ETA Grants and Workforce Investment Act (WIA) Funding
Those ETA grants which have been obligated to grantees for Fiscal Year 2013 will be able to continue operating with funds that have already been allocated. However, if a continuing resolution is not passed by Congress, ETA will be unable to award new grants and delays or stoppages in services provided by grantees can be expected.

WIA Adult and Dislocated Worker formula allotments may be affected. However, WIA Youth program funds have been allotted for Fiscal Year 2013, so states may continue to operate these programs during the shutdown.

Job Corps centers are maintained by contracts using Fiscal Year 2013 funds through November 1, 2013 and will continue operating at this time. If Congress does not authorize additional funding by that date, operations could be suspended.

NRLB
All NLRB field offices will be shut down, and all but a skeleton crew of 11 staff – the five Board Members, Acting General Counsel, and a few senior staff at the NLRB – are furloughed until further notice. Essentially all of the Board’s services will be suspended, including the following: representation case petition docketing, investigations, hearings and elections; Unfair Labor Practice charge docketing, investigations, hearings, complaints, and settlements; District, Circuit and Supreme Court litigation; Administrative Law Judge and Board decisions; resolution of workplace disputes (such as collective bargaining and representational issues); resolution of employee/employer disputes with a union; and any public affairs, information, or outreach services.  

Equal Employment Opportunity Commission (EEOC)
The EEOC will retain only 5 percent of its staff during the shutdown but will continue to docket new charges and federal sector appeals. It also will “litigate lawsuits where a continuance has not been granted; examine new charges to determine whether prompt judicial action is necessary to protect life or property and, if appropriate, file such action to obtain preliminary relief.” However, investigations of new charges will not be launched during the shutdown, nor will mediations be conducted at this time.

Affordable Care Act Implementation
The October 1 launch of state and federal health insurance exchanges is going forward as planned. Enrollment will become active as expected for most state exchanges as of January 1, 2014. Employers are still required to notify their workers of the exchange options available to them by the end of the day. However, there are no penalties or fines for failure to do so.
 
A full list of government agency contingency plans can be viewed here: http://www.whitehouse.gov/omb/contingency-plans.
 
If you have any questions or concerns related to the impact of the government shutdown, please do not hesitate to contact the members of IEC’s advocacy team:

Alexis Moch, Vice President of Government Affairs, (703) 650-0054 or amoch@ieci.org
Bob Baird, Vice President of Industry and Regulatory Affairs, (703) 650-0051 or bbaird@ieci.org
John Masarick, Vice President of Codes and Standards, (703) 650-0053 or jmasarick@ieci.org