Speakers: Michael T. Jackson
With the U.S. Congress failing to extend funding for the U.S. government before the start of its new fiscal year on 1 October, the federal government has entered its first shutdown since 2019. This represents the seventh shutdown that has occurred since 1995, with three of those being one week or more in duration. At this point, it is unclear how long this shutdown will last, but at the earliest, formal resolution will not happen until Congress reconvenes next week.
Efforts are ongoing to find a resolution to the current shutdown, with discussions primarily revolving around passing a short-term continuing resolution to reopen the government for several weeks. This would then allow the House and Senate to work on both a longer-term funding option and the question of extending subsidies for Affordable Care Act-related insurance plans that are set to expire at the end of 2025.
During the duration of the shutdown, agency activities funded by congressional appropriations that are not deemed by an agency or department to be “excepted” will be impacted. Excepted functions typically relate to required obligations under U.S. law that must continue (such as Social Security payments) or activities the suspension of which could endanger human life and/or protection of property (such as the military, law enforcement, and border security). With areas that are deemed excepted, many federal employees supporting these functions will likely do so without compensation until Congress appropriates funding that permits payment.
For agencies or departments that are funded in part or in whole by fees or other sources, activities are likely to be able to continue, provided they can do so via their alternative funding. However, these agencies may still see impacts if they rely on activities that involve non-excepted staff who are furloughed or collaboration with agencies that are affected by the shutdown.
During a shutdown, many government employees who are not deemed to be excepted may be furloughed until funding is restored. This year, however, the Trump administration and its Office of Management and Budget (OMB) have indicated that, in addition to furloughs, the administration may also implement formal reductions in force (RIF) for some non-excepted positions, which would likely compound staffing pressures in many agencies resulting from position eliminations and personnel departures that have already occurred since President Trump returned to office in January 2025. These RIFs, depending on the scale and where in the U.S. government they occur, could compound pressures that impact agencies and departments and impact a wide range of activities, including mobility-related ones.
With some of the services and activities that support various mobility-related functions already impacted by the shutdown and more likely to become impacted in the coming days as the last of previously appropriated resources are exhausted, mobility professionals need to think through how the shutdown could impact their organizations and mobility programs. These existing or potential impacts include:
Immigration Impacts
A U.S. government shutdown has numerous implications on immigration-related processes that then impact employers. These include:
- Department of Labor-related services: Immigration-related processes and services offered by the U.S. Department of Labor will be significantly impacted throughout the duration of a shutdown. These include, but are not limited to, the suspension of processing labor condition applications (LCAs), PERM labor certification applications, and prevailing wage requests. Mobility professionals with employees who will be needing these services soon should discuss the implications and courses of action with their immigration counsel/provider.
- Department of State-related services: Because the U.S. Department of State (DOS) is partially funded by visa application and other service-related fees, this funding will enable DOS to continue providing U.S. citizen services, including passport issuance and visa processing during a shutdown. Similarly, consular services for foreign nationals applying for and being adjudicated for a U.S. visa will continue during the shutdown. Despite this, employers should plan for delays in the processing of services due to the furlough of non-essential staff. A prolonged shutdown could lead to a shutdown of non-emergency services if the fee-related funds are exhausted prior to the appropriating of funds by Congress. It is not clear when, or if, this might occur, as it would be based on how much fee-related funding is available for the agency to use.
- USCIS-related services: As a fee-funded agency, U.S. Citizenship and Immigration Services (USCIS) and its operations generally continue during a shutdown. However, it is likely that reduced staff capacity and delays with interagency information requests will result in processing delays.
Employment Verification Impacts
The main E-Verify system ceased operations at the start of the shutdown on 1 October and will remain inoperable until funding resumes. All employers are still required to meet Form I-9 employment verification obligations despite the unavailability of E-Verify.
Social Security Impacts
The Social Security Administration (SSA) has indicated that it will still issue new Social Security cards and numbers during the shutdown. However, it is anticipated that processing for these, and for other services, will likely be delayed throughout the shutdown duration, which would result in challenges for organizations that have employees needing those services. This would particularly impact foreign nationals working in the United States who need the number to establish a U.S. bank account or get set up on the U.S. payroll.
Delays will likely also occur with the ability of SSA to engage in identity verification services related to mortgages. During past shutdowns, the electronic Consent-Based Social Security Number Verification System (eCBSV) was unavailable until funding was restored, which resulted in delays in the ability of lenders and other parties to complete parts of the mortgage process involving this system.
Internal Revenue Service (IRS) Impacts
The IRS has announced that it will be able to continue operations for five business days after the start of the shutdown on 1 October. After that point, non-excepted staff would likely be furloughed, and services would also likely be significantly curtailed. This would result in, among other things, significant delays in securing tax transcript verifications as part of the mortgage process. Delays could also impact policy-related items such as enactment of provisions of the One Big Beautiful Bill Act (OB3) and the agency’s implementation of President Trump’s executive order transitioning away from physical payments across the U.S. government.
The 15 October deadline for individuals and businesses that received an extension on their tax year 2024 filing(s) remains in place despite the shutdown, and taxpayers are expected to file by the deadline. However, IRS processing of submitted returns may be impacted depending on the length of the shutdown.
FHA and VA Loan Impacts
Processing of FHA and VA loans should proceed during the shutdown, but staffing reductions at the Department of Housing and Urban Development and the Department of Veterans Affairs may significantly impact processing times.
Government Relocation Impacts
The General Services Administration’s ERRC has indicated that its “operations will continue in the near term” during the shutdown. Depending on the length of the shutdown, transfer orders and/or civilian-related relocations by U.S. government entities could be delayed. Organizations that support U.S. government-related relocations could also experience delays in agencies processing payments for items related to non-essential services. GSA’s ERRC advises mobility providers that have services previously booked and scheduled for completion when the government is shut down to connect directly with the applicable agency for specific guidance.
Other Impacts
Depending on the length of a shutdown, flight-related delays could occur if furloughs and/or non-compensation of employees at the Transportation Security Administration (TSA) impact staffing levels. Additionally, federal employees across the U.S. government who are not receiving compensation during the shutdown may engage with lenders about their options related to forbearance or modification of payment terms. Additional impacts could occur depending on the scope and nature of any personnel actions taken by agencies and departments, particularly if reductions in force are implemented in connection with the shutdown.
WERC and its public policy forums will continue to monitor developments and provide updates as appropriate as they are available.