As the federal government shutdown continues, it’s critical for our clients and business partners to understand how it might disrupt operations across key sectors — legal, regulatory, and transportation, to name a few. Barakat + Bossa attorneys Peter Dzuba, Paula Ibarra, Tereza Horáková, Ali Iftikhar, Alejandra Muñiz Marcial, Barış Han Özkan, Rich Richards, Thalia Zagalo Pacheco, and Terrance Ayala have complied a list of notable impacts that could affect business owners — especially if they work with governmental agencies or have pending legal matters:
Legal and Regulatory Delays
- FOIA Requests Halted
Freedom of Information Act (FOIA) requests will not be processed, delaying access to critical government-held information. - IRS Delays
IRS operations slow dramatically. Fax submissions (often required for tax matters) may go unprocessed, creating backlogs and delaying tax resolutions, audits, and refund claims. - Federal Courts Disrupted
Courts may close or operate with limited staff. Active cases can be delayed, and deadlines for motions, discovery, and hearings may shift unpredictably. - Stalled Litigation
Ongoing federal cases may be paused or slowed, making it difficult to provide reliable guidance on case timelines. - Judicial Standing Orders
Some federal judges have already issued blanket deadline extensions to reduce administrative burden. These vary by jurisdiction and should be monitored closely. See a recently filed Court Order Here. - Jury Operations at Risk
Prolonged shutdowns may hinder courts’ ability to pay jurors or maintain jury operations, further delaying trials. - Settlement Uncertainty
Parties affected by the shutdown may hesitate to finalize settlements due to regulatory or financial instability.
Employment and Labor Law
- EEOC Closed — But Deadlines Still Apply
The Equal Employment Opportunity Commission (EEOC) does not operate during a shutdown, but statutory deadlines for filing discrimination charges remain. This creates risk for both employers and employees. - NLRB and DOL Delays
The National Labor Relations Board and Department of Labor may suspend investigations, hearings, and enforcement actions, delaying labor-related matters.
Transportation and Aviation
- FAA Furloughs
Over 11,000 FAA employees may be furloughed, including inspectors and regulators critical to airlines, charter operators, and aviation support companies. This may trigger force majeure claims due to regulatory inaction. - Aircraft Purchases & Registrations Halted
The FAA’s Aircraft Registry would close, halting aircraft sales, purchases, and deliveries. The backlog could take months to clear, disrupting operations well beyond the shutdown. - Air Traffic System Under Stress
Essential FAA personnel (e.g., air traffic controllers) must work without pay. Staffing shortages may worsen, leading to flight delays and cancellations.
Business Operations and Contracts
- Federal Contracting Delays
Agencies cannot issue new contracts or process payments on existing ones. This affects contractors, suppliers, and subcontractors relying on federal business. - Grant Processing Suspended
Federal grants may be delayed or frozen, impacting nonprofits, research institutions, and businesses relying on government funding. - The Small Business Administration has stopped approving new loan applications
This includes no longer providing ongoing program support, preventing small businesses from obtaining financing. - Regulatory Filings and Approvals Delayed
Agencies such as the SEC, EPA, and FDA may suspend or delay reviews, filings, and approvals — affecting IPOs, environmental permits, and drug/device approvals. - Immigration and Visa Processing Disruptions
While USCIS may continue limited operations, other agencies involved in visa issuance (e.g., Department of State) may experience delays, affecting workforce mobility. - The Alcohol and Tobacco Tax and Trade Bureau has suspended almost all its activity
This will impact the processing of permits, label approvals, and formula approvals. The agency intends to furlough 398 of its 459 employees. - Government-Dependent Industries at Risk
Sectors such as defense, healthcare, transportation, and energy may face operational uncertainty due to paused oversight, funding, or approvals.
Real Estate
- Federal Housing Administration (FHA) Loans Impacts
Home Equity Conversion Mortgages (HECM) and Title I loans will not be processed. Loans requiring manual underwriting may be delayed due to reduced staffing. - Department of Veterans Affairs (VA) Loans Impacts
VA will continue to guarantee home loans, but furloughs may slow down some of the process - USDA Loans Halted
New direct and guaranteed loans will be halted. Scheduled closings for USDA loans will be postponed. This affects buyers in rural and eligible towns, where USDA loans are often used. - National Flood Insurance Program (NFIP) Halted
NFIP is administered by FEMA and cannot issue new or renewal policies during a shutdown. - National Flood Insurance Program (NFIP) Halted
The NFIP is administered by FEMA and cannot issue new or renewal policies during a shutdown. This is something that affects Floridians in particular.
Despite the challenges posed by the federal government shutdown, our Firm remains fully committed to supporting businesses, individuals, and organizations navigating legal complexities during this time. We continue to monitor developments closely and will provide timely guidance as circumstances evolve. Where possible, we will move cases forward, maintain communication with courts and agencies, and advocate for our clients’ interests. If you have questions or require assistance, our team is here to help you assess risks, preserve rights, and make informed decisions in an uncertain regulatory environment.
