Sponsors (38)
The bill provides short-term unemployment relief to excepted federal employees during funding lapses and shields state budgets by using federal reimbursements, but it shifts near-term cost and operational risk onto the federal Unemployment Trust Fund, creates repayment and cash‑flow burdens for workers, and requires administrative changes by States.
Excepted federal employees (those working during FY2026–FY2027 funding lapses) can receive unemployment benefits for weeks they worked emergency duties, providing short-term income support.
State governments and taxpayers are protected from bearing direct costs because the Federal government reimburses States from the Unemployment Trust Fund for benefits and related administrative costs.
If federal workers later receive retroactive pay and must repay benefits, those recoveries are returned to State unemployment funds, helping preserve program solvency at the state level.
Excepted federal employees who receive unemployment benefits may face temporary double‑payment complexity and cash‑flow stress because they must repay benefits if later paid retroactive wages, creating administrative and financial burdens for workers.
Reimbursing States from the Unemployment Trust Fund increases withdrawals from a fund that normally covers civilian unemployment, which could reduce fund reserves and, if widespread, pressure future solvency or lead to higher employer taxes or reduced benefits.
The bill requires States to change unemployment law for FY2026–FY2027, imposing administrative costs and implementation work on state agencies.
Based on analysis of 2 sections of legislative text.
Permits unpaid excepted Federal employees to claim state unemployment for emergency-work weeks during FY2026–FY2027 shutdowns and requires federal reimbursement to States.
Allows certain Federal employees who are required to work during a lapse in appropriations in FY2026 or FY2027 ("excepted Federal employees") to apply for and receive state unemployment benefits for weeks they perform emergency work during those shutdown periods, with the federal government reimbursing states for payments and administrative costs. States must recoup benefits from employees later paid for those weeks under the applicable federal anti-deficiency pay statute and deposit recoveries into their unemployment funds.
Official title: To amend section 303 of the Social Security Act to require States to provide unemployment compensation benefits to Federal employees during a government shutdown, and for other purposes.
Introduced September 26, 2025 by Sarah Elfreth · Last progress September 26, 2025