Unemployment guidance during the 2013 federal shutdown

CLASSIFICATION
           EMPLOYMENT AND TRAINING                             UI
        ADMINISTRATION ADVISORY SYSTEM                         CORRESPONDENCE SYMBOL
           U.S. DEPARTMENT OF LABOR                            OUI/DUIO
                Washington, D.C. 20210
                                                               DATE
                                                               October 11, 2013


ADVISORY:           UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 31-13

TO:                 STATE WORKFORCE AGENCIES

FROM:               ERIC M. SELEZNOW /s/
                    Acting Assistant Secretary

SUBJECT:            Impacts of the Federal Government Shutdown and Unemployment Compensation for
                    Federal Employees and State Administrative Funding for State UI Programs

1. Purpose. To respond to questions from state workforce agencies and provide guidance about the
   Federal government shutdown and the Unemployment Insurance program, including Unemployment
   Compensation for Federal Employees (UCFE) and Emergency Unemployment Compensation (EUC).

2. References.

    •   Code of Federal Regulations, Title 20, Section 609.8(b)(1)(ii);
    •   UCFE Handbook No. 391 for State Agencies;
    •   Office of Personnel Management, Guidance for Shutdown Furloughs
        [http://www.opm.gov/policy-data-oversight/pay-leave/furlough-guidance/guidance-for-shutdown-
        furloughs.pdf?nocache=1];
    •   Office of Management and Budget Circular A-87.

3. Background. The failure of Congress to pass a budget by October 1, 2013, caused a lapse in
   appropriations for much of the Federal government, which in turn led to a partial Federal government
   shutdown. Many Federal workers, including some Congressional staff, were placed on “furlough”
   status. Because they are not performing services they are considered to be unemployed and may be
   eligible for unemployment insurance.

4. Action Requested. State Administrators should provide the information in this UIPL to appropriate
   staff.

5. Inquiries. Questions should be directed to Betty Castillo at [email protected] or Candace
   Edens at [email protected].

6. Attachment. Questions and Answers: Unemployment Insurance and the Federal Government
   Shutdown.




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Attachment 1 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2013/UIPL_31_13_Attachment_Acc.pdf)

Questions and Answers:
             Unemployment Insurance and the Federal Government Shutdown



A. Exempt and Excepted Federal Employees and Presidential Appointees

    1. Question: What guidance is available to help Federal furloughed workers and states understand a
      federal employee’s status during a shutdown?

       Answer: The Office of Personnel Management has published the guidance for Federal workers
       regarding the impact of a shutdown at http://www.opm.gov/policy-data-oversight/pay-
       leave/furlough-guidance/#url=Shutdown-Furlough.

    2. Question: Employees are “exempt” from furlough if they are not affected by a lapse in
      appropriations. This includes employees whose salaries are funded with other than annually
      appropriated funds and continue to be paid during a government shutdown. Are full-time exempt
      employees eligible for UCFE benefits?

       Answer: No. Employees are “exempt” from furlough if they are not affected by a lapse in
       appropriations. These employees will continue to work and be paid.

    3. Question: Are full-time “excepted” employees eligible for UCFE benefits?

       Answer: Employees are “excepted” if their salaries are funded through annual appropriations, but
       are nonetheless excepted from furlough because they are performing work that may continue to
       be performed during a lapse in appropriations. “Excepted” employees who remain on their jobs
       on a full-time basis are generally not eligible for unemployment benefits because states may
       determine that they are still fully employed. Excepted workers will not be paid for their work
       until Congress appropriates the funds.

    4. Question: Are “excepted intermittent” employees eligible for UCFE benefits?

       Answer: “Excepted intermittent” employees are similar to “excepted” employees, except that
       they are called in to work on an as-needed basis. Individuals classified as “Excepted
       Intermittent” employees are generally working less than full-time and may not be working at all.
       Therefore, they may be eligible for partial or full UCFE benefits depending on the hours of work
       or the amount of wages earned during the week. These employees will not be paid for their
       excepted work until Congress appropriates the funds.

    5. Question: What about employees who are neither “excepted” nor “exempt”?

       Answer: Workers who are not exempt and who are funded through annual appropriations but are
       not designated as excepted are barred from working during a shutdown except for minimal
       activities necessary for orderly shutdown. These employees have been furloughed and are
       eligible for UCFE under the same state requirements and conditions for other laid-off workers.




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    6. Question: Are leave-exempt Presidential appointees eligible for UCFE benefits?

       Answer: No. Individuals appointed by the President, with or without Senate confirmation, who
       are not covered by the Federal leave system are not subject to furlough. A leave-exempt
       Presidential appointee cannot be placed on nonduty status. These individuals will continue to be
       paid during a government shutdown.

B. Required Documentation for UCFE Claims

    1. Question: What documentation is acceptable from furloughed Federal employees as proof of
      employment and wages for a UCFE claim?

       Answer: Normally, furloughed Federal employees should provide copies of the Standard Form-8
       (SF-8) or the Standard Form-50 (SF-50) when filing for UCFE. However, due to the
       circumstances involved with the Federal government shutdown, many of these employees were
       not issued either the SF-8 or an SF-50. Further, given the very limited Federal human resources
       staff that is working during the shutdown, the processing of the states’ Request for Wage and
       Separation Information, ES 931, may be delayed. Therefore, states are encouraged to have
       claimants complete an affidavit to establish their employment and wages using earnings and leave
       statement(s), W-2 forms, furlough notices, and/or other types of documentation that can establish
       that the individual is a current Federal employee and has worked and earned sufficient base
       period wages to qualify for benefits.

    2. Question: Is there a specific affidavit form that states must use in taking these UCFE claims?

       Answer: States may use either the Form ES-935, Claimant’s Affidavit of Federal Civilian
       Service, Wages and Reason for Separation or their own affidavit form(s) in taking the UCFE
       claim. Form ES-935 can be found at http://oui.doleta.gov/unemploy/.

C. Work Search Requirements

   Question: What work search requirements apply to furloughed Federal workers determined to be
   eligible for UCFE?

   Answer. States should apply the work search provisions in accordance with state law and/or policy,
   including waivers of the work search requirements that may apply when a claimant remains work
   attached, but is only temporarily furloughed.

   The Office of Personnel Management provided the following information to Federal employees in its
   Guidance for Shutdown Furloughs (see Question and Answer under Working during a Furlough -
   question C.3 in the Guidance for Shutdown Furloughs), which mentions requirements that may make
   it particularly challenging for Federal employees to seek other employment during a furlough period.

       May employees take other jobs while on furlough?

       A. While on furlough, an individual remains an employee of the Federal Government. Therefore,
       executive branch-wide standards of ethical conduct and rules regarding outside employment
       continue to apply when an individual is furloughed (specifically, the executive branch-wide
       standards of ethical conduct (the standards), at 5 CFR part 2635). In addition, there are specific
       statutes which prohibit certain outside activities, and agency-specific supplemental rules that
       require prior approval of, and sometimes prohibit, outside employment. Therefore, before
       engaging in outside employment, employees should review these regulations and then consult
       their agency ethics official to learn if there are any agency-specific supplemental rules governing
       the employee.

   D. Furloughed Federal Employees Residing Outside the United States

   Question: Are furloughed Federal employees working outside the U.S at the time of the furlough
   eligible for Unemployment Compensation for Federal Employees (UCFE) if they are unable to be
   physically present to file an unemployment claim in one of the states, the District of Columbia, Puerto
   Rico or the Virgin Islands?

   Answer: No. Section 20 CFR 609.8(b) of Title 20 CFR provides:

   (b) Assignment of service and wages.
       (1) An individual's Federal civilian service and Federal wages shall be assigned to the State in
       which the individual had his or her last official station prior to filing a first claim unless:
           (i) At the time a first claim is filed the individual resides in another State in which, after
           separation from Federal civilian service, the individual performed service covered under the
           State law, in which case all of the individual's Federal civilian service and wages shall be
           assigned to the latter State; or
           (ii) Prior to filing a first claim an individual's last official station was outside the States, in
           which case all of the individual's Federal civilian service and Federal wages shall be assigned
           to the State in which the individual resides at the time the individual files a first claim,
           provided the individual is personally present in a State when the individual files the first
           claim.
                                                     * * * * *

   We interpret this regulation to require that individuals must be physically present in a state, the
   District of Columbia, Puerto Rico or the Virgin Islands in order to file a claim for Unemployment
   Compensation for Federal Employees.

E. Wage Garnishments for Overpayments

   Question: Are states able to require a Federal agency to recover a benefit overpayment through wage
   garnishment for any employees overpaid UCFE, including in the event that a payment that was
   appropriate at the time paid becomes an overpayment because back pay is granted?

   Answer. Yes. After providing claimants the opportunity for appeal and voluntary reimbursement, the
   state may, if state law requires employers to recover overpayments, request that a Federal agency
   garnish wages to recoup any overpayments. In these cases, the state should notify the Federal agency,

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   in writing, of its responsibility to collect the overpaid amount(s) from the employee (see UCFE
   Handbook No. 391, page V-5). States are strongly encouraged to remind Federal employee claimants
   that they will be required to repay unemployment benefits that are paid to them for wages lost during
   the furlough period that are later repaid.

F. Administrative Funding

    1. Question: Can states continue to pay unemployment benefits if the state no longer has any
      administrative funding available?

       Answer: Yes. States can, and are encouraged to, use other state resources to pay for the
       administration of UI program operations to prevent the disruption of UI benefit processing.
       The Department will advise states as soon as possible about funding available for administrative
       costs associated with the government shutdown. Additional guidance will be provided to states
       once the government shutdown ends.

    2. Question: If a state uses state resources to enable continued administration of the UI program
      after Federal administration funding for the program is exhausted, will the state receive full-year
      funding once a Federal appropriation for the program is enacted?

       Answer: In prior government shutdowns, once a Federal appropriation was enacted, the
       appropriation provided for funding of the administration of the UI program to avoid a gap (i.e.,
       funding was provided from the point in the fiscal year when the shutdown began). While there is
       not a guarantee, every effort will be made to ensure that funding for state UI administration will
       be provided as though a lapse in appropriations had not occurred.
    3. Question: What Federal funding sources should states consider using to enable continued UI
      program operations in the event the state exhausts all available state UI administrative funding?

       Answer: In the event that a state is approaching exhaustion of currently available state
       administration funding the state should immediately contact Gay Gilbert, Administrator, Office of
       Unemployment Insurance, at 202-693-3029 or [email protected].

       States are encouraged to identify other available funding sources that may be used for
       administration of the state’s UI program such as Reed Act funds, other special distributions
       similar to Reed Act distributions that could be used for state administration of the program, and
       UI Modernization incentive funds. States are also encouraged to consider the use of penalty and
       interest funds for this purpose.

    4. Question: Can states use EUC administrative funds to cover administrative costs for the regular
      UI program?

       Answer. Administration of the EUC program has undoubtedly required some common use of
       existing physical resources (copiers, office space, phone lines, etc.), information technology

       infrastructure, and states staff also used for administration of the state regular UI program. States
       should ensure that costs of these resources used for EUC administration are, to the extent possible
       under the cost allocation principles set forth in OMB circular A-87, charged to EUC
       administration. In doing so, states may help reduce pressure on available UI administrative
       funds.

G. Notification to Claimants If Benefit Payment Are Stopped Due to Lack of Administrative Funds

   Question: If a state must stop paying benefits due to a lapse in administrative funding, what, if any,
   claimant notification is required?

   Answer: States must make every effort to provide individual notification to claimants prior to
   stopping benefit payments. States are also strongly encouraged to ensure that notification is posted
   on state Web sites and in various state-wide media announcements. If possible, states should accept
   claims and encourage claimants to continue to certify continued claims for benefits even if payments
   cannot be issued. This would help to avoid work associated with backdating of claims once the
   administrative funding issue is resolved.




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