It’s been just over three weeks since the government shutdown started, and lots of people and processes have been affected. Knowing which of these closures affect you from an HR and payroll compliance standpoint can get overwhelming, so I’m going to break down a few of the big ticket items quickly so you can be sure all your processes stay on track. After all, even though we can’t predict how long the shutdown will last, it never hurts to be prepared, right?
What’s currently affected
There are a few HR and payroll compliance processes that are already seeing impacts from the shutdown, so we’ll start there:
1. E-Verify/Form I-9 completion
Currently, the E-Verify database is out of service since the department that runs it isn’t staffed. This means you won’t get the typical quick response about whether or not your new hires are eligible to work in the US. This doesn’t mean you’re free from the responsibility, though. The government still expects you to file I-9 forms for all your employees within their first three business days. SHRM has a longer explanation on this, as well as some good points on what’s still open and the effects of the government shutdown on businesses. In the meantime, a good option for making sure your new hires still meet the correct standard is to work with a background check company since they operate outside the government. Bonus points if you can get one that integrates with your HCM system for easy records tracking.
2. The EEOC
The Equal Employment Opportunity Commission (EEOC) is also closed, which means there’s limitations on the services available through their office during the shutdown. While this may not directly affect HR and payroll compliance processes, this is the office that oversees employment discrimination cases and enforces federal anti-discrimination policies. It’s important for HR professionals giving advice to employees about situations related to workplace discrimination to remember that the EEOC’s capabilities are currently limited. They can still accept cases, but progress may be slow. Check out the statement they released on their website for in-depth details on what is and isn’t available through their office during the shutdown.
3. AIR XML file testing for ACA
Anyone filing their Affordable Care Act (ACA) information through the government’s ACA Information Returns (AIR) system for the first time this year might run into some issues since the help desk that supports the system is currently closed. After you submit your communication test file for AIR and get it accepted, the usual process is to call in to the help desk and get your account switched over to Production so you can actually submit your real AIR XML file. Since no one’s there, there’s no way to complete this process at this point. ACA submission is supposed to open today, January 15th.
4. The IRS/tax season
This one goes out to all the payroll and finance people who are gearing up for yearly tax filing, but could also have an impact on HR professionals too. The shutdown is heavily impacting the IRS, but they’re still maintaining that tax filing season will start as normal on January 28, 2019. That said, all the personnel who typically respond to tax filing questions and maintain support services during tax season are furloughed, so although you can file you may have trouble getting answers from the IRS if you run into issues or are wondering how to handle specific parts of your filing.
What makes this lack of support even more difficult this year is the fact that this is the first tax filing season where the new tax code is in place, so there have been a lot of changes to our tax forms and processes. There are also differences of opinion on how the government shutdown combined with the tax code changes will affect tax refunds, with some news outlets saying refunds will go out as scheduled and others saying there may be impacts on refund timelines.
So what does it all mean in terms of your HR and payroll compliance processes this tax season? Be prepared. Get all your filing information in order and submit early to get in the queue for processing quickly. Submit electronically if at all possible to ensure efficient processing since personnel won’t be available to check and process paper forms. Finally, from an HR perspective, make sure you keep up with the latest news on the government shutdown so you can answer employee questions about their personal tax filing and refunds.
What could be affected soon
Now that we’ve got a picture of what’s going on currently with the government shutdown, let’s take a look at where there could be further impacts soon if it continues:
1. 2018 ACA filing
ACA filing for 2018 officially opens today, and as you’ve probably guessed from the AIR XML file testing point earlier, there may be some issues with the process if the shutdown continues deep into the ACA filing cycle. The current deadlines for ACA are March 4th to get all 1095-C forms to employees, February 28th to complete paper 1095-C filing (only available if you’re filing less than 250 forms total), and April 1st for electronic filing through the AIR system. As I mentioned, the support staff that runs the AIR process isn’t available, so it’s hard to say how smoothly filing will go this year. Having an automated ACA process embedded in your HCM system will be more important than ever, since it will help ensure your forms get generated correctly and comply with the latest standards even if there are no government employees available to confirm that.
2. Industry-specific impacts
Depending on what your organization’s business is, you may see some more specific impacts from the government shutdown. For instance, right now the FAA is closed, which is affecting airplane certifications, causing delays in airlines receiving new planes and impacting this sector of the transportation industry’s ability to comply with federal standards. Also, the FDA isn’t doing any of their routine inspections to clear domestic food processing facilities and is trying to restart their inspections of high-risk food items. Clearly this could result in increased risk for some organizations in the food processing, food services, and hospitality industries. And these are just a couple examples. The longer the government shutdown continues, the greater the chance for these types of scenarios.
Wrapping up: protecting HR and payroll compliance
The moral of the story here is there’s a lot that the government shutdown is either directly or indirectly impacting. Though there aren’t any hard and fast rules or fixes for the current situation, it pays to stay informed and make sure you’re collecting the right HR and payroll compliance information to put yourself in a good position when everything starts back up.