On Friday, the Chairman and the General Counsel of the National Labor Relations Board authored a letter to Congress, informing lawmakers that without additional funds in the upcoming year, the NLRB will be forced to furlough employees amidst a budget crisis — even as the agency’s workload surges. The letter paints the issue in stark terms, informing Congress that after adjusting for inflation, the NLRB has “lost one-quarter of our purchasing power over the past nine years.”  But how did we get here?

Since 2014, the NLRB’s budget has remained stagnant at $274 million, despite inflation and an increase in expenses. Indeed, the number of petitions for union representation has increased over 50% in the last year alone, in addition to a large spike in the number of charges filed alleging unfair labor practices. In fiscal year 2023, the NLRB will incur $18.7 million in added costs outside the agency’s control, with employees receiving a 4.6% pay increase and a relocation of several field offices. The NLRB has already shed hundreds of employees over the past several years to cut costs, and is down to 1,200 staff members with a hiring freeze to manage the growing caseload.

So, how will this affect employers? The NLRB’s contingency plan for shutdown in the absence of appropriations indicates that it will discontinue case handling, outreach and public affairs during furloughs, and that several other services will be impacted, including the processing of charges. Although about 60% of unfair labor charges are dismissed by the NLRB or withdrawn by the complainant, employers can anticipate a longer delay in processing these charges, even where the allegations are meritless.

What is the outlook? President Biden proposed a 16% percent funding increase for the NLRB in March; although the House passed a bill that would have increased the board’s budget to $317 million, it stalled in the Senate. Congress has until Dec. 16th to pass spending legislation, which could be the last chance for the next several years to boost the agency’s budget, with the upcoming change to a Republican majority in the House. Employers should stay tuned, but anticipate that the NLRB furloughs are likely.