Federal Government Shutdown Ends: Congress Still Has a Budget to Pass

The federal government shutdown ended on Nov. 12, 2025, when the president signed into law Senate amendments H.R. 5371. The House of Representatives passed the bill after the Senate voted 60-40 earlier in the week on the funding measure. The 43-day shutdown is the longest in U.S. history.

A major aspect missing from the Senate bill — and the reason behind the lengthy shutdown — was the Democrats' demand to have language in the bill that would extend expiring enhanced subsidies (tax credits) from the Affordable Care Act that would make health insurance from the marketplace more financially manageable. The credits are set the expire Dec. 31, 2025.

The new law funds most federal agencies until Jan. 30, 2026. It also includes appropriations for a full year for some parts of the government, including military construction and the Department of Veterans Affairs, operations for the legislative branch, and the Department of Agriculture and the FDA (SNAP benefits are under the Agriculture department).

For the past month-plus, all non-essential federal government employees had been on furlough, which is about 737,000 people. In addition to those individuals returning to work, the law also restores jobs the administration cut, as well as prevents any additional cuts until Jan. 30.

Congress is not out of the woods yet. There are more appropriation bills that must be negotiated, passed by both chambers of Congress, and signed by the president to fund government operations through their fiscal year 2026, which ends Sept 30, 2026. Failure to do so before the current funding runs out Jan. 30 would trigger a partial government shutdown at that point.

This marks the 14^th time since 1981 that the government has been partially or fully shut down, including five in the past decade.

A shutdown is costly. The nonpartisan Congressional Budget Office estimates that between $7 billion and $14 billion will be permanently lost as a result of this latest shutdown.¹ Long shutdowns also hurt private-sector investment because, among other impacts, access to federal loans is disrupted.

Businesses and their employees should understand more about what a government shutdown is, how it might impact them, and then plan accordingly.

What Is a Government Shutdown?

A government shutdown means the government can’t spend money that requires annual appropriations, which affects its ability to pay its employees and keep facilities and buildings open where those employees work. Some employees are considered essential such as air traffic controllers and would have to work without pay during the shutdown.

Federal employees are entitled to backpay for as long as appropriations are lapsed under the Government Employee Fair Treatment Act of 2019. It should be noted that employees of federal contractors are not guaranteed backpay under the 2019 law, but a company can decide if they want to provide backpay to these employees. The administration has started to talk about not paying certain furloughed federal employees when the shutdown ends, while opponents continue to point out that such a move would be illegal.

What Agencies and Services Would Be Affected by a Shutdown?

Here are some closures or partial closures that could impact your business based on previous shutdowns:

• Small Business Administration (SBA): Most of the SBA’s loan approval and processing (e.g., microloans, working capital loans, etc.) would be unavailable during a shutdown.
• Internal Revenue Service (IRS): All tax payments and filed returns will continue to be accepted as the IRS hits the peak of tax filing season, but refunds might arrive after a shutdown ends. The exception to that is e-filed, error-free returns with direct deposit refunds.
  • Expect delays in correspondence from the IRS.
  • All IRS toll-free hotlines will be closed, impacting the ability to get a client EIN Verification via this method.
• E-Verify: The federal internet-based employment verification system will be unavailable for employers to complete the process, but businesses are still required to complete the Form I-9 for new hires. If your business is in a state that mandates the use of E-Verify, you should check with your state’s website for information, including on alternative methods for employee verification.
  • Delays should be expected with onboarding new employees.

On-site audits and food/environmental inspections might be put on hold by agencies such as OSHA, the Department of Labor, the National Labor Relations Board, and others.

Medicare and Medicaid are federal programs that are not subject to annual appropriations, but a shutdown could cause a disruption for participants. For example, there might be a delay in getting Medicare replacement cards. Access to call centers and federal healthcare marketplace resources could be lost, as well.

How Could Businesses Be Impacted by a Shutdown?

There are tangential impacts to consider such as the closing of national parks and national museums (e.g., Adirondack and Yellowstone, the Smithsonian) during a shutdown that could affect businesses that rely on the patronage of federal employees or tourists.

States might have to suspend their unemployment programs and possibly find alternative sources of funding because federal unemployment funding to states will cease during a shutdown.

Although most shutdowns in U.S. history have not influenced the stock market because their durations were brief, a shutdown of significant length could shift the stock market. This would impact employee retirement plans (401k), as well as delay federal reports on job growth, housing starts, and other indicators that investors rely on to make decisions..

What Won’t Be Impacted by a Government Shutdown?

Based on previous shutdowns, the list is small of federal agencies and processes that continue to function through a shutdown.

• Social Security checks will go out to recipients. However,
  • Social Security Administration will not issue Social Security cards.
  • The Employee Services toll-free hotline will not be available.
• Medicare open enrollment should not be impacted.
• Medicaid enrollment is handled through individual states.
• The U.S. Postal Service may continue to deliver the mail.
• Members of Congress still get paid.

What’s Next?

Accounting professionals and financial advisors should have conversations with their impacted clients to gain a better understanding of each client’s financial situation and be prepared to offer any resources that might help.

Paychex continues to monitor the developments in Congress and will provide updates as the legislative branch works toward producing a bill that funds the government. We understand the challenges facing employers and offer educational resources and a variety of funding options to consider that might fit your business needs.

¹ Analysis of the Effects of the Government Shutdown on the Economy, Congressional Budget Office, Oct. 29, 2025