Pexels Free to use - see Description;

Possible Government Shutdown

Unless Congress passes a Continuing Resolution funding for the federal government will run out at midnight Saturday, September 30, 2023. As a federal contractor, the shutdown may have an immediate and significant impact on your revenue stream.  Your contracting officer will have the latest guidance from your agency on how to proceed during the shutdown period, but it will differ considerably based on whether your present contract is funded or not and the nature of the services you provide.

While there is legislation that makes federal employees whole following the conclusion of the shutdown, there is nothing that will make federal contractors or their employees whole if you are directed to stop work other than the potential to collect termination costs. As a result, you should be looking at ways to immediately reduce your spending balancing that against the need to maintain your workforce. By far, the most important thing you can do is keep your employees informed of the steps you intend to take to mitigate the impact on the Company and on them.

Among your choices, the easiest to employ are forcing the use of PTO and/or sick leave and allowing negative PTO balances to accrue. If the shutdown continues for a longer period, mandatory furloughs or layoffs can be implemented. Depending on the state where your employees live or work, they might be eligible for unemployment benefits if the stop work period continues for an extended time.

Something to keep in mind is that exempt employees are paid a salary and if they perform ANY work during a pay period, they must be paid their full salary. Regardless of what choices you make, keep accurate records of the impact of the shutdown.  Without accurate records, your opportunity to recoup any portion of the loss incurred due to the government shutdown will be severely reduced if not eliminated.

The most important thing you can do today, is contact your contracting officer for the most recent agency guidance.