The Federal Government Shutdown Lingers: HR Professionals Take Action

The government shutdown is in its third week and human resource professionals find themselves in a tough spot. They must balance continuing operations as normal with the knowledge that their employees may be feeling stressed or tapped out, especially if they are not getting paid or fear losing their job. 

HR Teams in federal contractor businesses should take the workforce’s pulse to determine whether there are any additional ways in which their organization can support their employees.   

Employees may be feeling the impact of the government shutdown on several fronts, and human resource professionals can play a meaningful role in guiding employees through these anxious times. 

Empathy and Ideas 

Here are some of the ways in which HR professionals can show empathy towards employees who may be facing stress and hardship as the government shutdown lingers. 

Employee Resources 

• Publish resources about employees’ use of retirement savings and the consequences of early access if a family member has been furloughed or terminated 
• Highlight employee assistance plan offerings and any associated costs, letting employees know of the availability of these resources 
• Explain any other programs to which employees may have access to deal with stress and anxiety 

Funds 

• If your organization is facing the loss of government contracts or funding sources, consider whether it’s permissible and fiduciarily responsible to notify impacted employees in advance to afford them the time and ability to arrange their finances 
• Determine whether your organization has any emergency funds to offer employees facing hardship because a spouse or domestic partner has been furloughed or fired from the government 

Additional Items 

• Consider your own policies on the use of credit reports in post-offer background checks and determine whether they need adapting because otherwise qualified applicants fired from government jobs may be unable to pay their bills on time in the short-run 
• If you have employees with seniors in high school, who are facing obstacles without the financial aid resources that the Department of Education would typically provide, consider offering supplemental unpaid or paid leave opportunities for parents to attend meetings with school officials and counselors who are trying to bridge the information gap, or perhaps seek the assistance of other educational professionals who can conduct remote informational financial aid sessions for employees at your organization 
• Communicate with applicants awaiting security clearance and explain what is or is not happening with fingerprinting and industry investigations (https://www.dcsa.mil/About-Us/News/ ) 
• Develop business travel contingency plans should employees face sudden obstacles if Air Traffic Controllers and TSA Officers begin to call out sick to protest working without pay, or weigh the feasibility and desirability of switching upcoming live meetings to virtual meetings  

Reductions in Force 

If your organization is going to have to cut its workforce if the shutdown continues for much longer, consider whether it’s feasible to offer terminated employees outplacement assistance and garden leave.   

Prior to the shutdown, it was estimated that more than 200,000 federal employees were looking for work, and that number didn’t include the number of non-federal employees in organizations who were let go earlier in 2025 because the federal government ended their contracts and grants or because of DOGE-recommended cuts.  

It’s a hard time to be laid off and looking for work, and sometimes, a little empathy now goes a long way towards reducing future litigation. 

If your organization is going to have to reduce its workforce, it is important to ensure that your selection decisions are made based on job-related reasons, and it is strongly recommended that you conduct impact ratio analyses of the proposed termination decisions by race, sex, and age to determine whether there is any legal risk in from disproportionate selections.  

Although the mathematical results are not a foolproof way to prevent individual discrimination claims, the equations can help to identify whether the organization could be facing a pattern and practice of disparate treatment claim, which the Equal Employment Opportunity Commission has made clear it still intends to pursue. 

It also is a best practice to conduct these analyses under attorney-client privilege and to have an employment attorney review the rationale behind the decisions. 

The Older Workers Benefit Protection Act, Waivers, and Severance Payments 

The Older Workers Benefit Protection Act (OWBPA) applies when an employer with 20 or more employees is taking an action that affects employees who are 40 years old or older, especially in cases of layoffs, severance agreements, or early retirement packages.  

The Act requires employers to provide specific information and protections when asking these employees to waive their right to sue for age discrimination.  

Important information about OWBPA:  

• Applies when a layoff or staff reduction affects two or more employees over 40 
• The employer must provide detailed information about the ages and job titles of those eligible, selected, and not selected for the program.  
• Employees must also be given 45 days to consider the agreement.  

The OWBPA sets strict requirements for any waiver of an age discrimination claim to be "knowing and voluntary". This is relevant when an employer offers severance pay in exchange for the employee signing a release agreement.  

The act applies to voluntary early retirement plans that ask employees to sign a waiver of age discrimination claims.  

Requirements for waivers and releases under the OWBPA 

For a waiver to be valid, employers must ensure it is:  

• Knowing and voluntary: The employee must understand the rights they are waiving.  
• Written in plain language: The agreement must be easy to understand and avoid misleading language.  
• In writing: It must be a written document.  
• For adequate consideration: The employee must receive something of value in exchange for the waiver, such as severance pay.  
• Specifically refers to the ADEA: The waiver must include a clear reference to the Age Discrimination in Employment Act.  
• Allows for a waiver period: The employee is given at least 21 days to consider the agreement (or 45 days for group layoffs).  
• Advises consultation with an attorney: The employee must be told in writing that they have the right to consult with an attorney before signing.  

Federal Worker Adjustment and Retraining Notification (WARN) Act 

Some employers that are faced with having to close a plant or conduct a very large layoff as the result of shutdowns and may need to review whether state or federal WARN acts apply.   

The federal WARN Act applies when a company with 100 or more employees plans a plant closing or mass layoff. It requires employers to provide 60 days' advance notice before such an event, which includes layoffs of 500 or more workers, or layoffs of 50 to 499 workers if they constitute at least 33% of the workforce at a single site.  

At least 18 states have mini-WARN acts, which require employers to provide advance notice of layoffs and facility closings, often with stricter thresholds than the federal WARN Act. These states include California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Oregon, Rhode Island, South Carolina, Tennessee, Vermont, and Wisconsin.   

What Can HR Do During This Shutdown?

As the government shutdown continues, HR’s role will continue to evolve. Keep the following in mind during this difficult time: 

1. Offer empathy towards employees where possible.  
2. Stay abreast of government services that currently are affecting your business or may affect your business in the short term.  
3. Develop contingency plans for travel and meetings 
4. Consult employment counsel if you are faced with having to implement a reduction in force.  

If you need help with any HR compliance related items or guidance on what to do, please contact OutSolve.