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.
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 […]
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 […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
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.
What Does the Government Shutdown Mean for New York and New Jersey Businesses?
Author: Dan Brecher
What does the shutdown mean for New York and New Jersey businesses?
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.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
