Prolonged Shutdown Endangers Trump’s Labor Department Agenda

The extended government shutdown has the potential to shorten the lifespan of President Donald Trump’s labor agenda, holding up highly anticipated rule changes and leaving backlogs that will slow services for weeks after federal funding is restored.

The Trump Labor Department set out a sweeping agenda to revamp standards on joint employer classification and minimum and overtime wages, and to launch immigration enforcement initiatives. Many of the planned changes would reverse Biden-era DOL policies.

“Every month that goes by without something happening means that it will be easier, if we have a Democratic president in 2028, for that president to go back to earlier initiatives,” said Joe Schmitt, a management-side attorney with Nilan Johnson Lewis PA.

Under the Antideficiency Act agencies are generally only allowed to perform work that is necessary to save lives or protect property. As a result, the DOL furloughed around three-quarters of its workforce and halted almost all investigations into workplace disputes when appropriations ran dry on Oct. 1, hampering resolutions for employers and their workers.

The department updated its contingency plan Oct. 31 to bring back 255 employees to process prevailing wage determinations and labor certification applications after the agricultural industry raised concerns about entering their peak season without access to critical labor through the H-2A seasonal visa program.

Regulations Put on Ice

The DOL this year placed over 60 proposed or final rules on the chopping block and said it plans to re-evaluate Biden-era regulations on prevailing wage, overtime, heat safety, and independent contractor rules.

The department has also launched initiatives like cracking down on immigration violations and easing regulations around employer fertility care.

This summer’s de-regulatory measures also included more than two dozen policies at the Occupational Safety and Health Administration and the Mine Safety and Health Administration targeting rules that require employers to record work-related musculoskeletal disorders and govern miners’ exposure to diesel particulate matter.

The DOL’s skeleton crew can work on rulemaking, but they will likely be occupied with the work deemed to pertain to imminently dangerous situations, said Paul DeCamp, a wage and hour attorney with Epstein Becker Green.

According to DOL’s newest contingency plan, there are 3,396 employees exempted from furlough because they’re presidential appointees, paid through finances aside from appropriations, or are performing duties implied by law to protect life and property.

The solicitor’s office said in the plan it wouldn’t be able to support the rulemaking process during the shutdown.

“I don’t think they have the time and the bandwidth in current circumstances to be working on regulations,” DeCamp said.

The Associated Builders and Contractors, which supports Trump policies around joint employer classification and prevailing wage, urged Congress to pass a continuing resolution in an Oct. 3 letter to “enact policies that support economic growth.”

“When the shutdown ends, it doesn’t mean that everything comes out the next day,” said Michael Altman, director of federal contracting and regulatory affairs at ABC. “There could be weeks or months of delay on some of these important policies.”

Enforcement, Safety Backlog

The DOL has also halted almost all of its enforcement work, investigations, and inspections.

Only matters that are deemed emergencies are allowed to be addressed by staff at the Wage and Hour Division, and OSHA. At WHD, only 10 of the agency’s 1,270 employees stayed on board to conduct child labor investigations, and probes into violations of federal minimum wage, overtime, or medical leave laws have largely stopped.

Seth Harris, former deputy labor secretary in the Obama administration, said the length of the shutdown is building a backlog.

“The rest of the world doesn’t stop doing what it’s doing. You still have health and safety violations, you still have wage theft, people are still embezzling money from pension plans. All of this additional work is going to have to be addressed when people get back and that’s on top of the regular workload,” he said. “It’s incredibly disruptive.”

DeCamp, former DOL Wage and Hour administrator under President George W. Bush, said agency employees and leadership will have to do some kind of “triage” of the case backlog when the shutdown is over. Cases that aren’t deemed vital because they don’t impact many workers or involve egregious violations of the law could be pushed down expedited resolution pathways.

“How aggressively the department does that will determine how long it takes to clear the backlog,” DeCamp said.

Ramifications for employers that are caught in DOL investigations could include higher back-pay costs as the case drags on, although some employers cease unlawful practices once investigations start, DeCamp added.

“The investigations don’t just go away now because of the shutdown,” he said. “This isn’t a get out of jail free card. This is an opportunity to stop incurring any further liability and bring your practices into compliance.”

OSHA also suspended nonessential enforcement efforts, keeping only 460 out of 1,664 staff members to continue investigations into situations deemed as emergencies. It ceased all compliance assistance, training classes, rulemaking, and other outreach programs.

Workforce Considerations

The shutdown and ensuing backlog of work could also exacerbate staff tensions within the agency.

The DOL has lost thousands of workers through layoffs and various buyout programs, even after the department brought back last month around 100 workers who had accepted deferred resignation offers.

The DOL wasn’t impacted by layoffs that the administration initiated during the shutdown but DeCamp said that if workers continue on furlough for another month or two, staffers may begin leaving the government altogether.

Harris said the shutdown has made “a difficult situation at the Department of Labor worse.”

“The workers in the Labor Department believe in their mission and want to carry it out, and now, because of politics, they are not being allowed to do the work that they care the most about,” Harris said. “That has got to be deeply distressing after everything else that’s happened.”