United States: The Wage And Hour And Immigration Consequences Of A Government Shutdown: What Federal Contractors Need To Know

As of December 20, 2018, media reports indicate that President Trump does not intend to sign the stopgap funding bill that the U.S. Senate recently passed. If it is left unsigned, the risk of a partial government shutdown increases dramatically. Below are answers to some frequently asked questions regarding the consequences of a shutdown on federal employers and contractors.

Q: What are the wage and hour considerations for federal employees and federal contractor employees during a government shutdown? Are federal contractors' obligations different depending on whether the furlough is for a full week or less than a full week?

AL ROBINSON (AR): The wage and hour considerations under the Fair Labor Standards Act (FLSA) and prevailing wage statutes during a partial federal government shutdown are virtually the same. So here are a few rules. Nonexempt employees must be paid at least the minimum wage, or applicable prevailing wage rate, on any hours worked in a workweek of and during a partial federal government shutdown. When such an employee works more than 40 hours in a workweek, he or she is entitled to overtime compensation. Also, these nonexempt employees must be paid for their hours worked on their usually scheduled payday. If a nonexempt employee of either the federal government or a federal contractor does not work during a partial government shutdown, he or she is not entitled to be paid for hours or days of work missed due to a partial government shutdown.

Exempt employees, on the other hand, are entitled to their regular salary for any workweek in which they perform any work or if they work a partial workweek due to the partial federal government shutdown. Also, section 541.710 of the regulations defining exempt employees addresses the propriety of deductions from a public-sector employee's salary when he or she is absent from work due to a government shutdown resulting from the absence of a budget.

Finally, employees who are deemed essential or critical by an agency and who work during a partial government shutdown are entitled to be paid as they were before the shutdown.

Q: Must employers pay H-1B employees placed on a nonproductive status or reduced work schedule at the full rate specified on their visa documentation?

LEIGH GANCHAN (LG): To protect U.S. workers, employers must complete and sign a certified LCA as part of the H-1B petition. It is in the LCA that the employer makes certain attestations regarding its responsibilities, including the wages, working conditions, and benefits it will provide to H-1B foreign workers. By completing and signing an LCA, an employer attests to the U.S. Department of Labor (DOL) that it will pay the higher of the actual or prevailing wage rate, compensate these employees for nonproductive time, and offer benefits on the same basis as offered to U.S. workers.

In LCAs, employers also attest that:

  • they will provide working conditions that will not adversely affect similarly situated U.S. workers;
  • there is no strike, lockout, or other work stoppage in the occupational classification at the place of employment;
  • they will notify the bargaining representative, if any, or post a notice that an LCA is being filed; and
  • they will provide the H-1B worker with a copy of the certified LCA. 

Q: Will the DOL continue to handle amended LCAs during a partial shutdown?

LG: The DOL reviews and certifies the LCA request within five to seven business days of the filing date.

During a full shutdown, the part of the DOL that handles the LCA requests, the Office of Foreign Labor Certification (OFLC), typically ceases processing all applications because its staff is not available to respond to inquiries. The OFLC's web-based application filing systems, such as iCERT, which is used to file and process LCAs, are inaccessible as well. If an employer needed to file an amended LCA for any reason (change in work location, material change in duties, etc.) during a shutdown, it would not be able to do so.

However, if a shutdown were to occur, because the DOL has already been funded through October 2019, it would continue to operate in the event of a partial shutdown.

Q: Would employers still have obligations to confirm employment eligibility in the event of a shutdown—even if E-Verify is inaccessible?

LG: I-9 compliance is related but separate from E-verify. Every employer will be expected to continue to complete the I-9 verification process when required during any government shutdown. Employers may complete hard copies of the relevant forms or electronic versions of those forms on software that employers can obtain from non-government vendors. 

During past shutdowns, E-Verify was not available. Thus, E-verify participants would not be able to access E-verify during a government shutdown, and employers would not be able to access their E-Verify accounts or:

  • enroll in E-Verify;
  • create E-Verify cases;
  • view or take action on any case via E-Verify;
  • add, delete, or edit any user account;
  • reset passwords;
  • edit company information;
  • terminate accounts; and
  • run reports or view any information about an account.

Additionally, E-Verify customer support is usually closed during a shutdown.

Recognizing the unique compliance challenges caused by a shutdown, U.S. Citizenship and Immigration Services (USCIS) typically implements temporary policies to lessen the burden on employers and employees. These policies may include the following:

  • As noted above, employers must still complete Form I-9 no later than the third business day after an employee starts work for pay and comply with all other Form I-9 requirements. In the event of a shutdown, USCIS may suspend the "three-day rule" for E-Verify cases affected by the unavailability of E-Verify.
  • USCIS may extend the time period during which employees may resolve Tentative Non-Confirmations (TNCs).
  • USCIS may instruct federal contractors covered by the E-Verify federal contractor rule to contact contracting officers to inquire about extending federal contractor deadlines.
  • USCIS temporary policies may prohibit employers from taking any adverse action against an employee while the employee's case is in an extended interim case status due to the unavailability of E-Verify.

Q: What obligations do employers have under the Worker Adjustment and Retraining Notification (WARN) Act in the event of a government shutdown?

AR: Essentially, the WARN Act requires employers with 100 or more full-time employees to provide 60 days' advance notice before a plant closing or a mass layoff. The WARN statute defines a "plant closing" as a "shutdown of a single site of employment" that results in the employment loss for 50 or more employees at that single site of employment. It also defines the term "mass layoff" to constitute a reduction in force resulting in a loss of employment for at least 33 percent of certain active employees and at least 50 employees from a "single site of employment" in any 30-day period. Generally any business entity that has 100 or more employees, not including part-time employees, qualifies as an employer subject to the WARN Act. Failure to provide the required notice of the WARN Act could expose an employer to damages, civil penalties, and an award of attorneys' fees.

Federal, state, and local governments generally are not covered by the WARN Act. The statute recognizes the existence of certain limited circumstances in which the required 60-day notice period may be reduced. One is the "unforeseeable business circumstances" exception, which includes a "[a] government ordered closing of an employment site that occurs without prior notice."

Q: The scale of this partial shutdown is expected to be different from those in years past because many agencies already are funded through the federal fiscal year ending September 30, 2019, and only some agencies are expected to be  shut down. Would a smaller-scale shutdown affect federal contractors?

AR: The prospect of a federal government shutdown, regardless of the scale, is a disruptive and costly exercise. Agencies and departments that are impacted expend many resources on planning for a shutdown and then actually implementing their plans. It is a time-consuming, costly process also to identify critical or essential employees who must continue to work through a shutdown. A partial federal government shutdown also causes confusion for contractors and their employees in assessing whether they are impacted. A direct impact of the partial shutdown should be felt by contractors and their employees who work with agencies that close under the partial federal government shutdown, but there could be ripple effects for contractors and agencies that are funded.      

To the chagrin of many taxpayers, a shutdown of the federal government does not result in any savings to the taxpayers since Congress usually agrees to compensate all employees for their missed worktime during the shutdown. The DOL's Wage and Hour Division (WHD) has issued a frequently asked questions document on furloughs to address these issues.

The authors of this article were previously quoted on this topic on SHRM Online.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions