Recovering benefits after 2013 federal shutdown pay

CLASSIFICATION
           EMPLOYMENT AND TRAINING                        Unemployment Insurance
        ADMINISTRATION ADVISORY SYSTEM                    CORRESPONDENCE SYMBOL
           U.S. DEPARTMENT OF LABOR                       OUI/DUIO
                Washington, D.C. 20210
                                                          DATE
                                                          October 24, 2013



ADVISORY:         UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 31-13,
                  Change 1

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 (UCFE) and State Administrative
                  Funding for State Unemployment Insurance (UI) Programs

1. Purpose. To provide guidance related to the processing of UCFE claims filed by furloughed
   Federal employees during the October 1-16, 2013, Federal government shutdown.

2. References.
   • Continuing Appropriations Act, 2014, Public Law (Pub. L.) 113-46 (the Act);
   • Code of Federal Regulations, Title 20, Part 609.3(d);
   • UCFE Handbook No. 391 for State Agencies; and
   • Unemployment Insurance Program Letter (UIPL) No. 31-13.

3. Background. During the recent shutdown of the Federal Government from October 1, 2013
   through October 16, 2013, hundreds of thousands of Federal workers were placed on
   “furlough” status for some or all of that period. On October 11, 2013, the Department issued
   UIPL No. 31-13. This UIPL advised state workforce agencies that Federal workers who were
   placed on “furlough” status during the shutdown, during which time they were not allowed to
   perform their Federal services, were considered to be unemployed and may have been eligible
   for UCFE. Many furloughed Federal workers filed for UCFE. For example, Initial UCFE
   claims (unadjusted) totaled 70,068 in the week ending October 5, an increase of 68,677 from
   the week ending before the shutdown.

  Effective October 17, 2013, the Continuing Appropriations Act ended the lapse in
  appropriations and allowed furloughed Federal workers to return to work. Section 115(a) of
  the Act requires that Federal employees be compensated “at their standard rate of
  compensation, for the period of such lapse in appropriations, as soon as practicable after such
  lapse in appropriations ends.” On October 17, 2013, the United States Office of Personnel
  Management (OPM) issued a Memorandum for Chief Human Capital Officers
  (Memorandum) “to assist agencies in administering pay and benefits” pursuant to section
  115(a). The Memorandum states that “[a]n employee furloughed during the lapse in

 RESCISSIONS                                              EXPIRATION DATE
 None                                                     Continuing

  appropriations that began on October 1, 2013, must now be considered to have been in a pay
  status from October 1, 2013, until the end of the lapse in appropriations.” Accordingly, in
  order to compensate furloughed employees for what they would have received absent the
  lapse in appropriations, the Memorandum directs the payment of full compensation including,
  for example, regularly scheduled overtime “as if the employee actually continued to work”
  and allowances, differentials, and certain other payments “as if the work had been performed.”
  The Memorandum provides that the hours for which furloughed federal workers are to be
  compensated are “considered 'hours of work' for pay administration purposes under the Fair
  Labor Standards Act.” Therefore, all Federal employees will be reimbursed their full pay for
  the period during the government shutdown for which they would have received
  compensation but for the lapse in appropriations.

  As described above, the Federal government is now treating furloughed Federal employees as
  having been in pay status during the lapse in appropriations. It is the Department’s position
  that this treatment of furloughed Federal employees renders them ineligible for UCFE under
  20 CFR 609.3(d), because they are not considered to have been totally, part-totally, or
  partially unemployed for that period. States must take appropriate action, based on the pay
  status of furloughed Federal employees during the lapse in appropriations, and consistent with
  state law, to address the recoupment of UCFE payments to Federal employees. States must
  ensure that, in accordance with 20 CFR 609.9, UCFE will be paid by the state in the same
  amount, on the same terms, and subject to the same conditions as the payment of state
  unemployment compensation is provided to individuals covered under the applicable State
  law.

4. Action Required. State Administrators must:
   a. Provide the contents of this directive to all appropriate staff;
   b. Review UCFE payment records to determine if payments were made to furloughed
      Federal employees for weeks during which the shutdown was in effect;
   c. Initiate all overpayment recovery actions permitted under the UCFE program for
      furloughed Federal workers covering the period for which those workers received
      retroactive pay; and
   d. Fully cooperate with the Federal agencies in any UCFE overpayment determination and
      recovery activities.

5. Inquiries. Questions should be directed to the appropriate Regional Office.




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