Late on September 30, 2013, the Office of Management and Budget (OMB) gave notice to federal agencies that an emergency shutdown furlough would be put in place as a result of the impending lapse in annual appropriations for FY2014. Federal agencies had been directed to develop contingency plans in preparation for this eventuality. On the previous Friday, the Department of Homeland Security (DHS) released its "Procedures Relating to a Federal Funding Hiatus." This document included details on how DHS planned to determine who was required to report to work, cease unexempted government operations, recall certain workers in the event of an emergency, and restart operations once an accord was reached on funding issues. On October 17, 2013, the President signed into law legislation which carries a short-term continuing resolution (CR) funding government operations at a rate generally equivalent to FY2013 post-sequestration levels through January 15, 2014. This act resolves the lapse in funding that began October 1, 2013, returns federal employees to work, and retroactively authorizes pay for both furloughed and exempted employees for the duration of the funding lapse. This report discusses the DHS contingency plan and the potential impacts of a lapse in annual appropriations on DHS operations, and then it discusses several legislative vehicles that mitigated or had the potential to mitigate those impacts. For a broader discussion of a federal government shutdown, please see CRS Report RL34680, Shutdown of the Federal Government: Causes, Processes, and Effects , coordinated by [author name scrubbed]. Lapses in annual appropriations result in a partial shutdown of government operations and emergency furlough of employees—however, they do not result in the complete shutdown of operations. DHS personnel who continue to work without passage of annual appropriations or a continuing resolution generally fall into two categories: those whose activities are not funded through one-year appropriations and those whose work is necessary for the preservation of the safety of human life or the protection of property. The former generally continue to be paid as scheduled, contingent on the availability of funds, whereas the latter are not paid while the lapse in annual appropriations continues. Of DHS's estimated 231,117 civilian and military employees, nearly 200,000 were projected to be exempted from the emergency furlough, according to the department. Most of these employees relied on annual appropriations for their salaries, and therefore were not paid during the funding lapse. Further information about exemptions from operational shutdown and emergency furlough due to a lapse in annual appropriations is outlined below. DHS has a number of functions that are paid for by fee revenues and multi-year appropriations. According to DHS, in the event of a funding lapse, these activities would continue and employees of these programs would continue to work and be paid as long as those revenues and multi-year appropriations were available, because emergency furlough and shutdown of these activities would occur only if resources were depleted. DHS noted several specific activities that would continue to be funded through fee revenues and multi-year appropriations. Under the National Protection and Programs Directorate (NPPD) Office of Biometric Identity Management Federal Protective Service Under the Federal Emergency Management Agency (FEMA) Radiological Emergency Preparedness Program Chemical Stockpile Emergency Preparedness Program Disaster Relief Operations National Flood Insurance Program Under U.S. Citizenship and Immigration Services (USCIS) All programs except for E-Verify In addition to these programs, a survey of the procedures document reveals that some exempt employees at U.S. Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), the Transportation Security Administration (TSA), and the Federal Law Enforcement Training Center (FLETC) may have continued to receive pay despite the lapse in appropriations for FY2014. Fees and multi-year funding must continue to be used for the purposes for which they were collected or provided—they cannot be used to fund broader component or departmental activity (such as salaries) than originally envisioned. In the event of a lapse in annual appropriations, some activities continue if they directly relate to preserving the safety of human life or the protection of property. According to the DHS plan, for an activity to continue under this exception, "there must be some reasonable likelihood that the safety of human life or protection of property would be compromised in some significant degree by the delay in the performance of the function in question. Specifically the risk should be real... and must be sufficiently imminent that delay is not permissible." The DHS procedures go on to note that support functions related to an exempt activity should continue "only to the extent that they are essential to maintain the effectiveness of those activities." Employees who work under this exemption are constrained in their activities—limited to performing activities that are exempted (those that relate to the protection of life and property). At DHS, this work includes the following functions, broken down by component. Under Customs and Border Protection (CBP) Border Security Programs Ports of Entry Operations Under Immigration and Customs Enforcement (ICE) Immigration Enforcement and Removal Operations Immigration and Customs Enforcement Homeland Security Investigations Under Transportation Security Administration (TSA) Transportation Security (including passenger screening) Federal Air Marshal Service Under U.S. Coast Guard (USCG) Military/Defense Operations Maritime Security Maritime Safety Under Secret Service (USSS) Protection of Persons and Facilities Under National Protection and Programs Directorate Cyber Security Under Analysis & Operations (A&O) State and Local Fusion Centers National Operations Center Watch Operations DHS Intelligence Operations Under the Office of Health Affairs BioWatch While a large percentage of DHS employees were still working under this exemption, only those who were exempt from furlough on the basis of funds to pay their salaries being available continued to receive pay for the duration of the funding gap. OMB provides the following guidance regarding pay for exempted employees who are reliant on one-year annual appropriations for their salaries: Without further specific direction or enactment by Congress, all excepted employees are entitled to receive payment for obligations incurred by their agencies for their performance of excepted work during the period of the appropriations lapse. After appropriations are enacted, payroll centers will pay all excepted employees for time worked. Work that is needed for an orderly shutdown : This is a narrow exception that allows for work to shut down non-exempt operations in an orderly fashion when a funding lapse occurs. OMB has determined that this should cover no more than four hours of work completely dedicated to de-activating a function, such as securing documents, completing payroll, etc. Presidential appointees : Presidential appointees who are not covered by a formal leave system—who are entitled to their pay because of their duties rather than the hours worked—cannot be put in "nonduty status" and therefore cannot be subject to furlough. DHS reports that it has 28 such personnel. The terms "exempted employee" and "essential employee" are not interchangeable when discussing federal employees. This is a common misunderstanding, even among members of the media that focus on the federal government on a regular basis. Exemption or exception is determined based on definitions of the Anti-Deficiency Act and the structure of funding that supports various operations. "Essential employees" and "essential functions" are labeled as such because of their roles in providing continuity of government operations (COOP). By DHS's standards, "essential personnel" include "mission critical" and "mission essential" personnel, as well as personnel identified for possible activation depending on the nature of the emergency, emergency personnel, and exempted employees not otherwise covered by the foregoing categories. Therefore, at DHS, one can be considered essential, but not exempt, but not vice versa. Section IV of the DHS procedures document explores these distinctions in more detail. DHS's contingency plan for the October 1, 2013, funding lapse was detailed enough to outline the impact of a shutdown by component using the number of staff in the component as a metric. Staffing impacts of a shutdown are relatively easy to quantify, but should carry a caveat. The number of initially furloughed employees does not tell the entire story of the impact of a government shutdown. In this situation, the government likely draws back significantly from its contracting activities overall, as it cannot spend monies normally provided through the appropriations process. In addition, hiring, procurement, and other projects in process are often stalled, and research efforts could be disrupted. Many excepted personnel are not paid during the lapse in appropriations, and their economic activities are curtailed as well as a result. Therefore, the following numbers only provide a limited perspective on the impact of the funding lapse. Figure 1 shows a graphic representation of the impact of the lapse in appropriations on the department's workforce as outlined in the DHS emergency furlough procedures document. The table immediately following provides the detailed data upon which the graphic is based. As of July 31, 2013, the five largest components by number of staff comprised 87% of total DHS personnel. These components carried the largest share of the projected furlough for DHS as a whole—Customs and Border Protection, Coast Guard, Transportation Security Administration, Immigration and Customs Enforcement, and the Federal Emergency Management Agency bore 77% of the projected furlough total. The remaining 13% of departmental manpower therefore bore 23% of the furlough burden—management, research and development, training, and some operations functions were projected to furlough more than 90% of their personnel. The impact of a shutdown on these functions over the long term, as well as the impact of the projected more than 50% reduction in the staffing for the DHS Office of Inspector General, is unknown, and analysis of those impacts is beyond the scope of this report.