Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

What Does the Government Shutdown Mean for New York and New Jersey Businesses?

Author: Dan Brecher

Date: October 2, 2013

Key Contacts

Back

What does the shutdown mean for New York and New Jersey businesses?

Federal Government New Jersey New York Business
Photo by Jonathan Simcoe on Unsplash

The federal government officially entered a partial shutdown as members of Congress failed to reach an agreement on a budget bill Monday night. Around the country, “closed” signs went up at national monuments, and many federal agencies are working with skeleton crews.

But what does the shutdown mean for New York and New Jersey businesses?

Companies that rely on government contracts or conduct direct business with the federal government will certainly feel the impact. Businesses that provide engineering, logistics, support and technical services to federal agencies are already reporting that delayed contracts and payments will impact their bottom line. The severity of the hit depends on how long the shut down lasts. For now, many have delayed hiring new workers, shifted existing employees’ job assignments, and temporarily scaled back operations.

Practically speaking, the shutdown also impacts the availability of government services. For now, both the U.S. Patent and Trademark Office (USPTO) and the Securities and Exchange Commission (SEC) report that they have enough in their reserves to operate for several weeks.  However, an extended closure will mean delayed patent applications and IPO registrations.

As for our courts, the Administrative Office for the U. S. Courts advised Thursday that the federal courts will remain open for at least ten business days from today, and that the Judiciary will reassess the situation on or about October 15th. In the meantime, in the Southern District, Chief Judge Loretta Preska signed an order that categorized that District’s personnel as “essential,” meaning all employees will still come to work. Should the shutdown run past October 15th, employees designated as “essential” would still come to work but would not be paid until Congress approves retroactive compensation. The money covering the next ten days comes from fees and fines.  If the courts run out of money, anything “not related case resolution or life and safety” will stop.

The contingency plans for other government agencies (available on the Office of Management and Budget website) are much more grave. The Small Business Administration (SBA), which has been preparing for the shutdown by processing loan applications at a lighting pace, ceased many of its operations on Monday night.

Agencies like the Equal Employment Opportunity Commission (EEOC) will continue to accept new claims, but will halt ongoing proceedings, such as litigation and mediation. The Internal Revenue Service, which will retain only 12 percent of its staff, will continue electronic tax return processing and criminal enforcement, but will put manual return processing and audits on hold.

On a broader scale, the implications of the shutdown are far less certain. While the dollar weakened slightly, the global markets appear to have taken the shutdown in stride, at least for now. However, a protracted shutdown would likely have a much more significant effect both in the United States and abroad. The impact of a three to four week government closure would cost the still fragile economy approximately $55 billion, according to Moody’s Analytics.

A court official during the 1995 Government shutdown observed that the courts have “the internal power” to continue operating, and that “The judiciary is too important. There’s a Constitution. The courts have to remain open.”  The same could be said for the minds of certain political ideologues.

If you have any questions about the federal government shutdown or would like to discuss how it may affect your business, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
How Understanding Bankruptcy Trends Can Benefit Your Business post image

How Understanding Bankruptcy Trends Can Benefit Your Business

The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]

Author: Brian D. Spector

Link to post with title - "How Understanding Bankruptcy Trends Can Benefit Your Business"
SEC Takes Actions Against Issuers for Failure to File Form D post image

SEC Takes Actions Against Issuers for Failure to File Form D

In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]

Author: Kenneth C. Oh

Link to post with title - "SEC Takes Actions Against Issuers for Failure to File Form D"
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda post image

Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda

On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]

Author: Matthew F. Mimnaugh

Link to post with title - "Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda"
What Are FIRPTA Withholding Requirements? post image

What Are FIRPTA Withholding Requirements?

If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]

Author: Jesse M. Dimitro

Link to post with title - "What Are FIRPTA Withholding Requirements?"
Does Your Homeowners Insurance Provide Adequate Coverage? post image

Does Your Homeowners Insurance Provide Adequate Coverage?

Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]

Author: Jesse M. Dimitro

Link to post with title - "Does Your Homeowners Insurance Provide Adequate Coverage?"
Understanding the Importance of a Non-Contingent Offer post image

Understanding the Importance of a Non-Contingent Offer

Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]

Author: Jesse M. Dimitro

Link to post with title - "Understanding the Importance of a Non-Contingent Offer"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: