Today, October 1, 2025, the federal government officially shut down after Congress failed to pass funding legislation, pausing a range of non-essential government services. This shutdown has significant implications on federal contractors, as well as trickle-down effects on private employers.
Potential Layoffs
Employers facing potential layoffs due to the shutdown must be mindful of notice requirements:
- Federal WARN Act: Generally, requires employers with 100 or more employees to provide 60 days' written notice before a plant closing or mass layoff.
- Washington State Mini-WARN Act: Effective since July 27, 2025, this law applies to Washington employers with 50 or more employees. Employers must provide at least 60 days' written notice to affected employees and the Washington Employment Security Department (ESD) prior to a mass layoff or business closure. It is important to note that Washington’s Mini-WARN is broader than the federal WARN and not limited to a single site of employment.
- Oregon: Oregon does not have a separate state "Mini-WARN" Act and because of that, employers in Oregon should continue to follow the requirements of the Federal WARN Act.
Additionally, both the Federal and Washington WARN Acts have a potential "unforeseen circumstances" exception. Employers should immediately and carefully analyze whether the government shutdown qualifies for this exception if they anticipate needing to implement sudden layoffs.
Business Shutdowns
For employers considering partial or full-week business shutdowns, specific wage and hour laws apply depending on the employee’s classification. It is important to note that for exempt employee salary deductions, both Washington and Oregon generally follow the same rules as federal law.
For non-exempt employees, employers are only required to pay them for the actual hours worked. However, exempt employees must receive their full salary for any week in which they perform any work, regardless of the number of days or hours worked. Therefore, salary deductions depend entirely on the shutdown's length and whether any work was performed during that period.
Full-Week Business Shutdowns
For a full week shutdown where no work is performed, employers are not required to pay exempt employees their salary. Employers can require exempt employees to use Paid Time Off (PTO) for these shutdowns.
Partial-Week Business Shutdowns
For a partial-week shutdown, employers must pay exempt employees their full salary, even if the employee only worked, for example, one hour that week. While employers can require the use of PTO, if an employee's PTO is exhausted, the employer cannot deduct from their guaranteed weekly salary.
Regulatory and Investigative Delays
The government shutdown will significantly slow the enforcement and investigatory roles of Department of Labor (DOL), Equal Employment Opportunity Commission (EEOC), and National Labor Relations Board (NLRB) due to all non-essential staff being furloughed. Because of this, nearly all non-urgent ongoing and new cases, audits, and investigations (including workplace, wage and hour, discrimination, or union-related claims) are typically paused or significantly slowed. Additionally, agencies will not issue new guidance or rulemaking during this time.
E-Verify Interruptions
For employers enrolled in E-Verify for I-9s, be aware that the system is typically taken offline during a government shutdown. This means you cannot create new E-Verify cases, manage existing cases, or resolve Tentative Nonconfirmations (TNCs). The U.S. Citizenship and Immigration Services (USCIS) usually responds by temporarily removing the three-day E-Verify case submission rule and extending deadlines for addressing TNCs. It is important to remember that employers cannot take adverse action against employees with unresolved E-Verify cases due to system unavailability.
Additionally, even though the requirement to create the E-Verify case is suspended while the system is down, employers are still required to complete the I-9 document examination (physical or remote alternative) on time. For remote employee verification, E-Verify employers in good standing can still use a permanent remote I-9 process that includes a live video session to examine employee documents.
Cascade will continue to monitor this and its impacts on the workplace. Never hesitate to reach out if you have any questions.