Sponsors (7)
The bill lets excepted federal employees receive unemployment during certain FY2026–FY2027 funding lapses while protecting state unemployment funds via full federal reimbursement, at the cost of repayment rules for some workers, added state administrative burdens, and drawing on the federal Unemployment Trust Fund.
Excepted federal employees who perform emergency/excepted work during FY2026 or FY2027 funding lapses can collect state unemployment benefits for those weeks, providing income support during shutdowns.
State unemployment programs will be fully reimbursed by the Treasury (from the Unemployment Trust Fund) for benefits and related administrative costs, and recovered repayments are returned to state funds, avoiding hits to state budgets and preserving solvency of state benefit pools.
Excepted federal employees who also receive lapse-period pay under 31 U.S.C. §1341(c)(2) will have to repay state unemployment benefits when that pay is received, creating paperwork and potential short-term financial uncertainty for workers.
State unemployment agencies and governments will face added administrative burden and complexity to process claims, certify reimbursements, and recover overpayments, increasing workload and operational costs despite federal reimbursement.
Using the federal Unemployment Trust Fund to reimburse States redirects federal unemployment reserve resources and could influence national-level unemployment financing priorities and federal fiscal flexibility.
Based on analysis of 2 sections of legislative text.
Allows excepted Federal employees to receive state unemployment benefits for emergency work weeks during FY2026–FY2027 funding lapses, with full federal reimbursement and repayment rules to avoid double payment.
Allows certain Federal employees who perform emergency (excepted) work during government funding lapses in FY2026 or FY2027 to receive state unemployment compensation for those weeks, while preventing duplicate federal pay. States are reimbursed 100% from the federal Unemployment Trust Fund for benefits paid and related admin costs; amounts later paid to the employee by the federal government must be repaid to the State and deposited back into the state unemployment fund.
Official title: 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 30, 2025 by Angela Deneece Alsobrooks · Last progress September 30, 2025