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What employers should expect when the government reopens: Key considerations for the days ahead

11/14/25

By: Sunshine Fellows

After more than 40 days of disruption, the longest U.S. government shutdown in history is nearing its end. Triggered by a lapse in appropriations on October 1, 2025, the shutdown has deeply impacted federal agencies, contractors and regulatory enforcement. As of November 12, Congress is poised to pass a bipartisan funding bill that would reopen the government through January 30, 2026. The legislation includes retroactive pay for furloughed employees, reverses recent layoffs and restores funding for critical programs like SNAP. With the House expected to vote imminently and President Trump signaling support, employers and defense counsel should begin preparing for the operational and legal ripple effects of the reopening process.

Agency Backlogs and Delays

When agencies resume full operations, stakeholders should expect a surge in backlogged activity. During the shutdown, many non‑essential functions, such as investigations, audits, contractual reviews and approvals, were suspended or significantly curtailed. As a result, employers should anticipate longer processing times for pending matters (for example, charge investigations at the Equal Employment Opportunity Commission (EEOC) or contractor deliverables under agency review). That backlog can affect the scheduling of enforcement actions, mediation or litigation calendars and contract procurements. Employers with federal contracts or investigations in progress should monitor status updates, preserve communications and records and plan for potential delays in resolution. Counsel should also track whether agencies issue guidance or prioritize certain categories of work, such as those tied to life‑safety, national security or major procurement programs.

Contracting and Procurement Impacts

For employers in the federal contracting arena, the shutdown and the subsequent restart will bring specific operational risks. Funding gaps may have triggered suspension of contract work, pausing of invoices or delays in new awards. Upon reopening, contractors should anticipate a wave of catch‑up in acquisitions, stronger oversight of funding streams and closer scrutiny of performance metrics and eligibility. Employers should review contract terms (including clauses triggered by funding lapses), ensure prompt submission of invoices and compliance documentation and prepare for audits of work performed (or suspended) during the funding gap. Defense counsel should advise clients to maintain contemporaneous records of shutdown‑related delays, furloughs or reductions in force that may affect deliverables or performance metrics.

Enforcement and Oversight Priorities

Reopening of the government does not simply mean a return to “business as usual.” Agencies are likely to prioritize enforcement and oversight of areas where delay and disruption may have accumulated exposure. For example, employers should expect renewed focus on wage and hour compliance in the federal sector, contractor labor issues, affirmative action and subcontractor obligations under federal contracts, immigration and onboarding practices and regulatory obligations. Some guidance suggests that investigations paused during the shutdown may now be resumed with added urgency. Employers and their counsel should proactively review internal compliance programs, catch up on delayed filings or self‑audits and consider whether previously postponed actions (e.g., internal investigations, training updates, vendor audits) should be brought forward now.

Rulemaking and Policy Timelines

Another key area for employers: rule‑making, guidance issuance and policy updates may now accelerate. While many regulatory actions were held in abeyance during the funding lapse, the reopening phase often sees agencies moving aggressively to catch up, issuing proposed rules, finalizing previously published notices and scheduling stakeholder outreach. Employers should monitor Federal Register filings and docket activity, especially in employment‑ and contractor‑related arenas (e.g., contractor equal opportunity obligations, joint employer standards, artificial‑intelligence hiring oversight, wage transparency rules). Counsel should advise clients to stay alert to newly‑scheduled comment periods, compliance deadlines and implementation timelines. It is also important to recognize that agency staff shortages or transitions (including possible reductions‑in‑force or hiring freezes) may impact the quality or timing of guidance.

Key Takeaways for Employers and Defense Counsel

• Conduct an operational assessment: Identify contracts, investigations or regulatory matters impacted by the shutdown and map anticipated reopening timing and risk.
• Review contractual documentation, including clauses relating to funding lapses, extensions, delays and performance metrics.
• Refresh internal compliance programs, focusing on areas where enforcement may accelerate.
• Track regulatory activity: Set up alerts for Federal Register notices and agency dockets.
• Work closely with counsel to prioritize and sequence post‑shutdown tasks.

By taking these steps now, employers and defense counsel can better manage the transition period, mitigate exposure and capitalize on the opportunity to reset compliance programs and strategic oversight. Though the government shutdown has disrupted many processes, the reopening phase offers a chance to engage thoughtfully, address backlog risk and position organizations for smoother operations ahead.

For more information, please contact Sunshine Fellows at sunshine.fellows@fmglaw.com or your local FMG attorney. 

Information conveyed herein should not be construed as legal advice or represent any specific or binding policy or procedure of any organization. Information provided is for educational purposes only. These materials are written in a general format and not intended to be advice applicable to any specific circumstance. Legal opinions may vary when based on subtle factual distinctions. All rights reserved. No part of this presentation may be reproduced, published or posted without the written permission of Freeman Mathis & Gary, LLP.