43-Day Shutdown Ends, But the Ripples Remain: What Hawaii Employers Need to Know
Mallory Martin
Corporate Counsel / Director of Legal Operations, ProService Hawaii
Quick Summary: The 43-day federal shutdown has ended, but its effects on Hawaii were significant. Employers should immediately resume any paused compliance activities (I-9s, tax filings, agency communications) and reassess labor costs and schedules, thoughtfully restoring hours and staffing where feasible. At the same time, support employee wellbeing by making space for check-ins and proactively sharing trusted local resources—such as Hawaii Emergency Food Benefits, Hawaiian Humane Society’s Pet Pantry, Catholic Charities Hawaii, housing voucher programs, and Hawaiian Community Assets—since many households are still recovering. With the current continuing resolution set to expire January 30, 2026, now is the window to build “Compliance Capital”. ProService is ready to support employers as they stabilize operations and will guide them to make smart people decisions during this time.
After 43 days, the longest federal government shutdown in U.S. history is finally over, and for many in Hawaii that brings much-needed relief. But as employers and community members, we know the effects didn’t stop at the federal level. They rippled outward touching families, slowing local businesses, and straining systems that were already running lean.
Data from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics shows that Hawai’i bore the brunt of this shutdown—5.6% of local jobs are federal positions, the highest percentage outside D.C. Beyond the 25,000 federal workers, the ripple effects touched an estimated 40,000+ private sector employees across tourism, retail, and services.
From longer TSA lines to canceled flights, from cut hotel hours to quiet lobbies—the economic slow-down was real. Now that agencies are reopening and funding is slowly trickling in, there's hope on the horizon. But it’s important to remember: this isn’t an overnight reset. Getting back to full strength will take time.
In the midst of all that uncertainty, Hawaii did what it always does, stepped up with aloha for the community.
Some of our very own clients—Hawaii Foodbank, Aloha United Way, and the Hawaiian Humane Society’s Pet Pantry—stepped in to support our community while navigating the same uncertainty themselves. And they weren’t alone. Across our client network, local businesses donated time, shared resources, checked in on employees, and made adjustments to keep everyone afloat.
Hawaii Business Compliance Requirements After Federal Reopening
As federal agencies ramp back up, employers should expect to see more activity in several key areas of oversight and enforcement. Here's what to prepare for:
The Equal Employment Opportunity Commission is roaring back to life with newfound vigor. After postponing investigations, litigation, and hearings for 43 days, the agency isn't just playing catch-up, it's playing hardball. Watch carefully for notices about reopened cases or rescheduled proceedings, as the EEOC works through its backlog with a newly confirmed commissioner who's publicly committed to aggressive enforcement.
The National Labor Relations Board faces a mountain of postponed cases that accumulated during its forced hiatus. If your company has any open labor matters (union elections, unfair labor practice charges, or pending decisions) expect movement soon, though potentially with delays as the understaffed agency tackles its backlog. Stay in close contact with your labor counsel and monitor all NLRB communications carefully, especially if you’re involved in an open matter.
The Department of Labor's Wage and Hour Division is preparing to release guidance on critical employment issues, particularly around minimum wage requirements, overtime rules, and the ever-contentious independent contractor classification standards. This isn't the time to get casual about employee classifications or pay practices. Ensure your job descriptions, classification decisions, and compensation structures are bulletproof and properly documented.
OSHA is resuming inspections and enforcement activities that were paused during the shutdown, and increased activity is expected as inspectors work through their backlog. The action required is straightforward: review your safety protocols now and ensure all required documentation (particularly injury logs and training records) is both complete and readily accessible for inspection.
Federal contractors should prepare for a surge in activity as agencies rush to restart stalled projects and process delayed payments. This restart affects not just prime contractors but flows down to subcontractors, potentially impacting project timelines, staffing requirements, and compliance obligations across the board.
At ProService, we prepare our employers whether that’s reviewing documentation, supporting inspection readiness, or delivering safety training to stay ahead of compliance expectations.
What Employers Should Do Right Now
Here are a few ways to stabilize operations and take care of your team:
- Resume Compliance Activities: If you paused I-9 verifications, tax filings, or agency communications, now is the time to pick them back up.
- Reassess Labor Costs and Scheduling: If you made any temporary cuts or hour changes, reassess staffing plans and restore where you can, thoughtfully and with clear communication.
- Support Employee Wellbeing: Shutdown or not, households across the islands may still be recovering. Make space for check-ins. Compassion goes a long way.
- Share Helpful Resources: Not everyone will ask for help, so making support easy to find is one way to lead. Here are some trusted local resources to share:
Building Compliance Capital: Your January 30, 2026 Insurance Policy
The federal shutdown ended with the passing of a continuing resolution, which included a full year of funding for certain programs and extended others temporarily. The continuing resolution expires January 30—just 10 weeks away. Employers should use this window to build “Compliance Capital,” turning the next potential shutdown from crisis into competitive advantage. Here's your action plan:
Start by documenting what broke, what held, and what got fuzzy during this shutdown. Many employers experienced significant payment delays, creating ripple effects across cash flow and project timelines. Others faced mounting backlogs in approvals, disrupted vendor timelines, stalled hiring processes and uncertainty around compliance obligations. These operational and financial disruptions are not just pain points, they provide a blueprint for what must be reinforced in the next nine weeks.
Evaluate whether your internal systems can withstand prolonged operational strain. Can your payroll handle 45 days of mixed schedules—some employees at 100%, others at 50%, some furloughed—while maintaining accurate overtime and benefits? Do your systems flag compliance issues automatically or depend on someone remembering? Fix the gaps now while you have time.
Run 90-minute tabletop drills where managers practice the conversations that matter: “Why is my paycheck different?” “Can I file for unemployment?” Front line leaders are your compliance first responders. Ensuring they can communicate with clarity and accuracy prevents costly mistakes under pressure.
Develop a clear, repeatable communication framework for your workforce. Map out what employees need to know in the first 24, 48 and 72 hours of a shutdown. Create templated talking points, FAQs and updates for every stage of disruption. Train leaders on how to deliver these messages and schedule internal communication checkpoints.
Convene your “First 48 Alliance”—HR, Finance, Operations, plus key external partners. Document who does what in hours 1-12, 13-24, and 25-48 of any shutdown. The companies that struggled most weren't those without plans; they were those whose plans existed only in one leader's head. Shared ownership is what keeps operations stable when uncertainty hits.
In the final week, run a full scale shutdown simulation that tests every component of your plan: payroll contingencies, communication protocols, leadership readiness, and cross-department handoffs. Pressure test your documentation, validate your assumptions and identify any remaining blind spots. Once the simulation is complete, finalize updates to your playbook, ensure redundancy in critical roles, and lock in communication and operational templates. By the end of this week, your organization should be prepared to execute with speed and confidence.
The Payoff
Local businesses are choosing vendors based on stability. Nobody wants a supplier that fails during the next disruption. Even employees are making job decisions based on which employers handled the shutdown professionally. In a world where disruptions are routine, Compliance Capital isn't just about avoiding penalties, it's about becoming the reliable partner everyone wants when uncertainty hits.
ProService Is Here for You
The shutdown tested Hawaii's businesses, but it also proved something critical: local expertise matters. While federal agencies scramble through backlogs and new commissioners ramp up enforcement, Hawaii employers need a partner who understands both the regulatory landscape and the local business ecosystem. That's the difference between just surviving the next crisis and building resilient operations that thrive regardless of what the federal government does. At ProService, we understand the complexities of doing business in Hawaii—especially during times of transition. Whether you need help catching up on compliance, preparing for inspections, or simply making smart people decisions, our team is here to guide and support you.
