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The Looming Federal Shutdown - What It Means For You

by Cedric M. Shen

April 8, 2011 | 4:39 pm

For the past week, every media outlet has been talking about the repercussions of a federal government shutdown.  To be sure, this will impact Americans (and non-Americans) in many ways.  Federal employees will be furloughed, U.S. military personnel may not get paid, just to name a few things.  The federal shutdown will have an effect on the U.S. immigration systems as well.  The primary department is the United States Citizenship and Immigration Service.  Thankfully, the USCIS has indicated that will continue operations throughout the shutdown – largely because it is funded by the filing fees.

E-Verify, a system that allows employers to determine an employee’s eligibility to work in the United States based on the completed I-9 forms, may not operate.  The Department of State has reported that it will likely shutdown the majority of its operations, only processing visas that under “life or death” emergencies.  The Department of Labor has indicated that it will cease all operations in the event of a shutdown.  Many popular visas, such as the H-1B, require the employer to file a Labor Condition Application, which is processed by the DOL.

So what does this all mean?  We are not really going to know the long-term effects of a federal shutdown.  Much of it will depend on how long the shutdown lasts.  It is probably safe to say that citizens trying to apply for passports in order to travel may face long delays – resulting in cancelled travel plans.

The effects could be more far-reaching for U.S. employers.  A shutdown of the E-Verify system could mean an inability to place newly hired employees on payroll.  Employers of foreign workers may also face a delay in their work visa applications – most notably any H-1B applications.  Prior to filing an H-1B application, an employer must submit a Labor Condition Application to the Department of Labor attesting, among other things, that it will pay the foreign worker a salary higher than the prevailing wage, as determined by the DOL.  This process usually takes at least a week, and the H-1B application may not be filed with the USCIS until the employer receives a certified LCA.  The 2012 H-1B fiscal year began on April 1st, so many employers who plan to hire foreign workers likely submitted their H-1B applications on March 31st.  So they do not have to worry about the DOL shutdown.  However, those employers who are just now starting the LCA process may have to wait considerably longer than one week to get it certified.  Given that the H-1B quota is 65,000 (plus an additional 20,000 for those with master’s degrees), time is of the essence for employers and any delay in filing could result in an inability to get timely approval of a work visa for their foreign employees.

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