E-Verify, the online system used by enrolled employers to verify the identity and employment eligibility of newly hired employees against records available to the Social Security Administration (SSA) and the Department of Homeland Security (DHS), is temporarily suspended. It’s a barely noticed consequence of the government shutdown, unless, of course, you happen to be one of the more than 800,000 employers enrolled in the program and are in a position to hire new employees.

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By now, we have all read the horror stories of federal employees who are either furloughed or forced to work without pay during this historic shutdown. Less well-known, however, is the impact this shutdown has had on small business contractors who rely on federal government contracts for much – if not all ‒ of their revenue. Whereas large government contractors may have ample cash reserves for a situation like this, small businesses are likely less fortunate. In fact, many small businesses hire highly skilled, in-demand personnel specifically in support of their government contracts. Unfortunately, with much of the government shuttered and its coffers empty, these highly skilled personnel, and the companies for which they work, find themselves emptyhanded and operating in the red. Absent a stream of revenue, small businesses cannot pay the employees they specifically hired for the contracts that are now unfunded. While many small business contractors have been able to weather the first few weeks of this shutdown by either diverting these employees to other projects or using vacation or sick leave, many thousands of contractors are now facing grim choices as the shutdown enters its fourth week. Simply stated, these companies are in real danger not only of losing those employees hired to support existing contracts, but of losing the opportunity to leverage those employees to compete for future contracts. To make matters worse, unlike federal employees who will likely receive back pay, most if not all contractors will not be reimbursed for the revenue lost during this time of political chicken.

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Week three of the U.S. Government shutdown has begun, and agencies responsible for administering export controls, sanctions, and other trade-related functions have been affected by the lapse in federal appropriations.  This means that companies need to be prepared for extended licensing and processing wait times, along with increased wait times for any communications with the agencies, including advisory opinions. Accordingly, companies must operate — and continue to operate — in accordance with law and regulation. The shutdown requires increased vigilance on the part of those regulated by or working with the government (see here for advice for federal contractors). With that in mind, see below for the key international trade-related agencies impacted by the shutdown and suggestions on how industry should properly respond.

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Here we are again. Large swaths of the federal government have been closed since December 22 because Congress and the president cannot agree on legislation to fund the government. Nearly a million federal employees are not receiving their paychecks. Even larger numbers of government contractors are – as is often the case – left squarely at the bottom of the hill, dodging the boulders of political mismanagement that are raining down in a landslide of “stop-work” orders. For example, as has been reported, the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) took affirmative steps to publicize and issue a “blanket” stop-work order on December 26 – the day after Christmas – giving many affected contractors a post-holiday cocktail of uncertainty and dread. Other agencies have followed suit, with the Departments of Justice, Agriculture, Commerce, Housing and Urban Development, Interior, State, Transportation, and Treasury issuing such orders over the past few weeks.

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As the potential for a Government shutdown gets closer to reality with each passing minute, United States Government contractors and subcontractors may soon find themselves in a confusing position as to what actions they should take in light of their existing contract obligations. In an effort to resolve that confusion, the Department of Defense has released guidance to be used by its elements and contracts in the event of a Government shutdown tonight. While directly applicable to Defense activities and constituent contracts, the guidance may assist other non-Defense contractors in addressing some of their questions or concerns.

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