The Domino Effect of a Government Shutdown: How Can Employers Help?

The effects of the federal government shutdown can cascade through the economy, affecting businesses and employees alike. What can employers do to support team members and their families who may be losing essential resources? Proactive strategies can lessen the impact and build resilience in the workplace.

Increase in mental health issues

Mental health problems have been on the rise for several years, and the government shutdown is adding to anxiety for many workers during an already stressful time of year. Those struggling with food and money issues are feeling it even more. Like it or not, employers play a crucial role in employee mental health. Our recent article, How corporate culture can support employee mental health, explores the benefits of prioritizing employee mental well-being and how business leaders and HR professionals can address the needs of the entire workforce.

What employers can do

• Acknowledge that uncertainty creates stress, for both employers and employees alike.
  
  
• Normalize mental health discussions among managers. Equip them with compassionate talking points and training to recognize stress. Encourage flexibility with schedules and deadlines, and emphasize that seeking help is a strength, not a weakness.
  
  
• Remind your employees about the control they have and the actions they can take by utilizing existing resources, such as short-term counseling or time off benefits for themselves or to support friends or family facing hardships.

Job insecurity in industries that rely on federal contracts

When private companies rely on government contracts, funding, or supply chains, they might lose money and even face stop-work orders. This situation can create job insecurity for employees worried about staff reductions.

What employers can do

• Work with your benefits advisor to determine ongoing plan eligibility during a furlough or layoff and when and whether COBRA should be offered. Ensure that eligible employees receive COBRA election notices in a timely manner. In addition, advise on the status of FSA contributions and reimbursements; 401(k) contributions and matching contributions; paid time off usage and payoff; life and disability coverage and potential conversion; and eligibility for unemployment benefits.
  
  
• Be transparent. Communicate honestly and openly with employees about how the company is affected by the shutdown. Provide an avenue for employees to direct their questions.
  
  
• Be direct. Reach out to affected employees individually about how their situation may change.
  
  
• Be empathetic. Offer support with outplacement services and counseling resources.

Food insecurity due to loss of SNAP benefits

While major benefits like Social Security, Medicare, and Veterans’ benefits are continuing during the government shutdown, other programs like the Supplemental Nutrition Assistance Program (SNAP) will run out of funds starting November 1. More than 42 million Americans rely on monthly SNAP benefits to feed their families. If the shutdown is prolonged, the supplemental nutrition program for Women, Infants and Children (WIC) may also face uncertainty.

What employers can do

• Connect employees to local and state resources. Searching for “[State] food assistance” or "[State] emergency food assistance program” will link to non-federal programs.
  
  
• 211 is a confidential and free referral service across all 50 states that connects people to assistance with food, housing, utility bills and healthcare. 211 is available by phone, on the web, and by text in certain regions.
  
  
• Donate to local food banks to make an impact in the communities where your employees work and live. Promote participation in local food drives and offer or remind employees of volunteerism hours. Share resources such as Feedingamerica.org, an organization that partners with local food pantries and meal programs. A zip code search is available on their website.

Housing insecurity due to loss of family income

Families depending on a government worker’s income may have challenges paying for essential housing during the shutdown.

What employers can do

• Remind employees of any budgeting or debt management benefits offered through the company’s employee assistance program (EAP), or provide information on free organizations such as the National Foundation for Credit Counseling.
  
  
• 211 and searching for state housing resources apply here as well.
  
  
• Educate employees on the pros and cons of 401k hardship withdrawals and emergency loans.
  
  
• Provide interest-free paycheck advances for employees struggling with rent and mortgage payments.

How Alliant can help

Creative agility is embedded in our employee benefits consulting approach. We encourage a modern, holistic definition of health that includes physical, mental, social, emotional, and financial well-being. By supporting employee well-being, Alliant helps employers foster a positive work culture that can increase employee engagement and productivity, and build resilience for their workforce and their business.