The United States is currently undergoing a government shutdown, impacting HR departments across the country and forcing leaders to confront employee anxieties. Is your business prepared?
Leaders Should Know:
How Will the Government Shutdown Impact Your Business?
The current government shutdown went into effect at 12:01 am EST on October 1, 2025, due to Republican and Democratic politicians failing to resolve a budget dispute. Employers are expecting suspension of key functions at various governmental agencies until lawmakers come to a resolution. The last government shutdown occurred in 2018, lasting five weeks and resulting in about $3 billion in lost GDP.
SHRM research found that a 4–7-day government shutdown could disrupt daily operations at 43% of organizations and hinder 31% of organizations’ ability to meet their year financial goals. These numbers increase the longer the shut down lasts.
The Impact
Department of Labor:
- Scaled back enforcement and regulatory efforts
- Stopped processing foreign labor certifications, labor condition applications, and prevailing wage determinations
- OSHA suspended most workplace inspections
- Bureau of Labor Statistics suspended operations
- Ongoing litigation expected to continue
EEOC:
- Ceased nonessential operations
- Current litigation continues unless courts granted stays/extensions
- Can still file charges and appeals
- No new investigations, hearings, mediations, or outreach programs
- Staff unavailable to answer public questions or correspondence
NLRB:
- Already lacked a quorum for several months prior to the shutdown
- Ceased nonessential activities
- Stopped processing new representation petitions or unfair labor practice charges
- Expected to grant automatic extensions for filing deadlines
- No administrative litigation or hearings
Immigration:
- E-Verify is completely unavailable
- USCIS expected to continue processing petitions and applications
- Form I-9 obligations remain in effect
HR Concerns
- Suspended access to immigration services may create a bottleneck in new hire verification and work visa acquisition.
- No new EEOC or NLRB filings will be reviewed or investigated, slowing down proceedings surrounding union petitions and EEOC cases.
- No OSHA inspections will occur.
- SHRM notes that HR departments will need to manage furloughs, process payroll changes, and address employee anxiety.
Change Management Essentials
If your workforce is one of the many impacted by the government shutdown, employees may be feeling concerned. As a leader, it’s your role to guide and support them through uncertain times.
- Communicate Transparently
Be direct about the situation from day one. Establish a regular cadence for updates and use multiple accessible channels to ensure all employees receive updates. Compile comprehensive information about resources, including financial resources, HR, and legal guidance. Leaders should be available to answer questions.
- Lead with Empathy
Acknowledge the emotional toll this situation may be taking on your employees. Demonstrate that employee well-being is more important than productivity or workflow. Push for resolution and support for your team. Facilitate peer support networks and create spaces for employees to express concerns.
- Plan for Recovery
Prepare a robust reentry plan addressing back pay logistics, workload catch-up strategies, and the emotional toll of the experience. Reinforce efforts around encouraging employee well-being, financial well-being, job security, and workload management.
A government shutdown creates a ripple effect across the economy, but strong leadership can shield your team from many of its impacts. Communicate transparently, lead empathetically, and plan thoughtfully to guide your workforce through uncertainty without losing trust or morale. PuzzleHR has the resources you need to ensure your business gets through the shutdown unscathed, from development courses on change management and people-first leadership to dedicated HR compliance experts. Contact us to learn more.
