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Provides a temporary program allowing certain federal "excepted" employees who perform emergency work during lapses in appropriations in fiscal years 2026 and 2027 to apply for and receive state unemployment compensation for weeks they worked but were unpaid, and requires the federal government to fully reimburse states for those benefits and related administrative costs from the Unemployment Trust Fund. States must allow recovery of benefits if the employee later receives back pay and deposit any recoveries into their unemployment funds.
The bill ensures unemployment coverage for excepted federal workers and protects state unemployment funds during FY2026–FY2027 funding lapses, but increases federal outlays and creates repayment and implementation burdens for employees and state agencies.
Excepted federal employees who perform emergency work during FY2026–FY2027 funding lapses can apply for and receive unemployment benefits for those weeks, providing direct income support.
State unemployment agencies and state governments will be fully reimbursed from the Unemployment Trust Fund for 100% of benefits paid and related administrative costs, preventing state budget hits.
Recovered amounts from employees later paid under 31 U.S.C. §1341(c)(2) are returned to the state unemployment fund, preserving program integrity and maintaining state trust fund balances.
Taxpayers indirectly fund these payments via the Unemployment Trust Fund, increasing federal outlays for FY2026–FY2027.
Excepted employees may be required to repay benefits if later paid under §1341(c)(2), creating administrative burden and potential temporary financial hardship for those workers.
States must change laws and procedures to implement the new rules, imposing administrative costs and operational burdens despite federal reimbursement timing or certification delays.
Introduced September 26, 2025 by Sarah Elfreth · Last progress September 26, 2025