This Friday at midnight, the federal government once again faces the prospect of a shutdown unless Congress reaches a compromise or passes a short-term funding extension. Although this potential shutdown would be limited to a single agency, that agency—the U.S. Department of Homeland Security—plays an outsized role in the functioning of the U.S. labor market.
Because of funding provided in the July 2025 budget reconciliation bill, several experts have noted that certain enforcement operations at U.S. Immigration and Customs Enforcement would likely continue. However, a lapse in appropriations would still disrupt large portions of DHS, including the Federal Emergency Management Agency, the Transportation Security Administration, the U.S. Coast Guard, and administrative operations that support more than 260,000 employees across the department.
A shutdown could last for weeks, but even a short disruption would create immediate and compounding challenges for staffing firms and their clients. Below are several of the most significant issues staffing firms may face during a prolonged DHS shutdown.
Employee Verification and Onboarding Delays
Although ICE enforcement activities may continue during a shutdown, agency resources are likely to be redirected toward priority enforcement functions. As a result, administrative processes such as E-Verify case resolution, data corrections, and follow-up inquiries could slow significantly.
For staffing firms, even modest delays in employment verification can create serious operational challenges. Candidates may take longer to clear, onboarding timelines can stretch, and open assignments could remain unfilled longer than anticipated. When discrepancies arise, staffing firms may be forced to choose between delaying placements and assuming additional compliance risk.
Visa and Immigration Processing Stalls
A DHS shutdown would also likely deprioritize visa and immigration processing. For health care staffing agencies that work with international professionals, this could mean applications stuck in limbo for weeks or longer. Qualified nurses, therapists, and other clinicians may be left overseas while U.S. health care facilities struggle to fill critical roles. Over time, this can exacerbate staffing shortages, increase burnout among existing employees, and potentially have a negative effect on patient care and safety.
Compliance Uncertainty and Rising Costs
A DHS shutdown does not eliminate oversight or enforcement risk, but it does eliminate predictability. When access to timely guidance, processing, or clarification is disrupted, staffing companies and their clients are forced to operate with less certainty and higher risk. Labor uncertainty translates directly into higher costs: increased overtime, premium pay for cleared workers, delayed projects, and reduced productivity. Companies pay more for less coverage while staffing firms absorb operational strain and reputational risk.
Conclusion
A DHS shutdown may appear narrow in scope, but its ripple effects across the labor market would be anything but limited. When DHS operations slow or stall, the impact is felt not just by staffing companies, but also by hospitals, manufacturers, transportation providers, and communities that rely on a flexible and responsive workforce.
If a shutdown does occur, staffing firms should consider communicating to their clients, letting them know they are aware of the situation and that the shutdown could lead to delays in employment verification and immigration processing. Advising clients to plan for slightly longer onboarding timelines demonstrates that your staffing firm is there for clients as a workforce provider and business partner.