After what has already been a difficult year for working families, federal workers and contractors find themselves dealing with yet another government shutdown, which is entering its first week at the time of this writing. Making matters worse, the Administration is threatening to permanently lay off/fire some federal workers during the shutdown.
Please note that the shutdown will not only affect federal workers. It will also impact people working for federal contractors, the stores and businesses where those people shop, the creditors they may be unable to pay, etc. A shutdown of even just a few weeks can be enough to produce a significantly negative ripple effect across our entire economy.
The most critical takeaway at the moment is that federal workers are guaranteed backpay during shutdowns, but those workers employed by contractors are not.
Furloughed vs. essential (“excepted”) federal workers
Federal workers typically fall into two categories during a shutdown. Furloughed employees will neither work nor receive pay. Essential employees (also referred to as “excepted” workers in the federal guidance that follows) are required to work but will not receive pay.
- Unfortunately, federal workers deemed essential are required to work without pay and are currently not eligible for unemployment insurance (UI). Essential employees are already eligible for backpay, but UI could help tide them over, particularly if the shutdown goes on for weeks or months.
- Government employees who are furloughed may be eligible for unemployment insurance. The UI program for federal civil servants is called Unemployment Compensation for Federal Employees (UCFE).
How furloughed federal workers can apply for unemployment compensation
- UCFE is administered by the states, so you’ll need to apply for UCFE in the state where you work. You can find your state UI agency and application here.
- States will verify your federal employment and earnings. States typically use two forms to verify this information: Standard Form-8 (SF-8) or Standard Form-50 (SF-50). Unfortunately, many workers may not have received these forms as the shutdown approached. The U.S. Department of Labor has also warned that there may be delays in federal agencies’ verification of workers’ employment.
- You can still apply without agency forms or verification. Workers can support their applications with an ES-395 affidavit, “Claimant’s Affidavit of Federal Civilian Service, Wages and Reason for Separation” – available through their state agency – or they can use the form here. This form can be used to confirm that you work for the federal government and also as proof of your earnings (such as through paystubs or W-2 forms). Please note, however, that if the federal agency you work for subsequently provides information that conflicts with your ES-395, you may have to repay some or all of those benefits.
- State eligibility criteria, benefit amounts and processing speeds will vary. Most states have implemented a mandatory one-week waiting period to receive benefits. While each benefit formula varies, workers can expect to receive a benefit of about one-third to one-half of their salary, up to a maximum benefit. A full table of the minimum and maximum weekly benefits is available here and includes information as of January 2025.
- If you have difficulty applying for or receiving benefits, you should contact the corresponding state unemployment insurance agency, your union or UI advocates in the state where you’re claiming benefits.
Be advised: backpay and repayment of benefits
If you’re a furloughed worker who received back pay after the shutdown ends, you’ll likely have to repay any UCFE benefits you’ve received. While state laws vary, you’ll most likely be found to have a UI “overpayment,” which the state will then seek to recover. As soon as you’ve received back pay, you should repay your state, as the agency could charge penalties for not repaying overpayments in a timely manner.
Layoffs vs. voluntary separation
If the Administration fires or lays off federal workers, they should be entitled to UCFE. However, workers who receive Voluntary Separation Incentive Payments or take part in a Deferred Resignation Program may not qualify if their separation is determined to be a voluntary resignation without good cause.
The following guidance was published by the federal Office of Personnel Management.
Shutdown of federal operations – What does it mean to me?
In the event of a federal government shutdown, Federal employees may be eligible for Unemployment Compensation for Federal Employees (UCFE). The UCFE program is administered by state unemployment insurance (UI) agencies acting as agents of the Federal government. The program is operated under the same terms and conditions that apply to regular state UI. In general, the law of the state in which an individual’s official duty station in federal civilian service is located will be the state law under which an individual’s eligibility for benefits is determined.
What is a government shutdown?
Every year, Congress appropriates funds for federal agencies to operate in each fiscal year. In the absence of either a signed appropriations or a continuing resolution, federal agencies must “shut down” – that is, cease normal spending.
Which federal employees are affected?
When there is a shutdown, not all government operations cease. Expectations generally provide for the continuation of activities involving national defense, law enforcement and other activities directly involved with the protection of life and property. In addition, employees not paid from appropriated funds and those “excepted” to administer shutdown operations will continue to work.
Pay status during the government shutdown
During a government shutdown, employees who are not required to work under one of the exceptions above may not even volunteer their services. Employees not required to work are “furloughed,” that is, placed in a non-pay, non-duty status, until the shutdown ends.
Will “excepted” employees be paid?
Employees designated as “excepted” who continue to work during the shutdown will almost certainly be paid for this period. However, this requires specific Congressional approval and that has occurred in the past.
Am I eligible for unemployment benefits?
State UI laws regarding eligibility vary. You may apply on or after the first day you are furloughed. The state where you file your claim will determine your eligibility. In general, furloughed employees should be eligible as long as all other state eligibility factors are met.
How do I file an unemployment claim?
Contact the state where you worked to file a claim. To find contact information for your state, please visit this website. Employees may be asked to provide proof of wages, such as an earnings and leave statement or Form SF-50 and may also be asked to provide a Form SF-8.
What is the weekly amount of UCFE benefits paid, and how long do benefits last?
Most states pay a maximum of 26 weeks of regular benefits. The maximum weekly benefit amount of UCFE is based on the state law. The amounts will vary.
How soon will benefits begin to be paid?
Some states require individuals to serve a waiting week, which means that the first week after a claim is filed is an unpaid week. In general, most states will issue payments to eligible individuals within 14-21 days after the claim is filed.
What will happen if federal employees are paid for time during the government shutdown period?
Should an appropriation or continuing resolution occur that retroactively provides for the payment of salary, state and Federal UI laws governing benefit overpayments will need to be applied to those weeks in which benefits were paid.