As of Friday evening, January 19, many parts of the federal government have shut down.
The Senate has passed a bill to end the shutdown, giving Congress until February 8 to resolve outstanding issues and continue government funding. To be enacted, the bill must first be passed by the House, then signed by President Trump.
Though critical services for “life or property” such as the postal service remain intact, several federal government agencies and their employees are furloughed during this period. Here’s how the absence of these services will affect you, as well as areas where you can turn to Nextep for assistance.
New tax tables
Though the IRS may be delayed in implementing the sweeping tax reforms included in the recently passed tax bill, deadlines remain intact for businesses. Nextep has implemented the new tax withholding tables as of today. We encourage employees to review their paystubs dated after January 22, 2018 and log in to make any needed changes to their tax withholding statuses. Here’s how.
Since the US Postal Service runs on its own revenue stream, mail delivery will continue uninterrupted. There will be no change or delay in payments made by Nextep to employees, vendors, benefit carriers, or other parties to whom Nextep makes payments for our clients.
Company tax filing
Automated process will continue, but the Internal Revenue Service (IRS) is largely unmanned during the shutdown. Timely tax reports and payments are still due, though. Nextep will continue our regular schedule of reporting and remitting all payroll and other applicable taxes on behalf of our clients.
W-2 filing
January 29 is the official IRS opening of tax filing season, during which employees can file for individual tax refunds using their W-2 forms. While it’s currently unknown whether the government will reopen by January 29, here’s what could happen.
When the government previously shut down in October 2013, the IRS pushed back the 2014 tax season by 10 days. Since the timing of this shutdown comes significantly closer to tax season, the implications may differ from last time.
Based on the IRS contingency plan, it appears that taxpayers will still be able to electronically file their taxes and remit any applicable payments beginning January 29, but may not receive refunds until the shutdown has ended and the IRS has worked through its backlog. Bottom line: until we hear otherwise, expect to file your taxes and payments on time, but depending on the length of the shutdown, don’t expect to get a timely refund.
Nextep will still distribute all 2017 W-2s to employees no later than January 30. For answers to your frequent W-2 questions, visit our W-2 FAQ.
Benefits
Though the furloughed government employees may be home from work, their benefits should continue uninterrupted. The shutdown isn’t expected to create a federally-approved qualifying event that allows furloughed workers to join a spouse or parent’s benefit plan, but there may be exceptions. Contact Nextep’s benefits team for case-by-case assistance.
Labor
The Department of Labor (DOL) has significantly reduced operations during the shutdown. Divisions include:
- Wage and Hour Division (WHD)
- Occupational Safety and Health Administration (OSHA)
- Equal Employment Opportunity Commission (EEOC)
While investigations will cease during the furlough, companies must comply with labor laws, including overtime pay, worksite safety, and Title VII. Nextep’s HR team is available to help with any guidance or issues.
Unemployment
Most unemployment proceedings are operated by state governments, which are still currently operational. Therefore, unemployment claims, responses, and hearings will continue as usual. Nextep’s HR department will continue to handle unemployment claims and recommend best practices to safeguard your company.
Employee verification
E-Verify, used for employee eligibility verification, is closed during the government shutdown.
Employers must still comply with existing requirements for correctly completing the I-9 form within three days of a new employee’s first day.
Workplace health
The government shutdown comes at a particularly bad time for public health since the flu is currently categorized as an epidemic.
Much of staff at the Center for Disease Control (CDC) are furloughed, limiting public health officials’ response to the flu. Nextep advises employers to promote health in the workplace using the CDCs existing educational materials. Our benefits team is also on hand to help with benefit claims or questions for ill employees
Disaster response
While disaster preparedness programs are suspended, disaster response is still operational under the Federal Emergency Management Agency (FEMA). Any individuals or businesses impacted by catastrophic events will receive FEMA assistance. Current relief efforts for those recovering from recent wildfires and hurricanes will continue. Nextep encourages company leaders to review your disaster preparedness plan.
Issues on the table
On Congress’ table during this shutdown: DACA, defense spending, border security, and children’s health care. Regulations concerning employee eligibility to work and reside in the US may or may not change based on the outcome of negotiations. We may also see possible reinstatement of the CHIP program. Nextep will continue to closely monitor the situation and keep clients informed.
As mentioned above, funding could be extended through February 8 if the House and the president finalize the vote to end the shutdown. The government is currently still closed, but is expected to reopen as early as this afternoon.
For additional questions, please contact Nextep.
