Sponsors (7)
The bill provides short-term income relief to federal employees and protects state unemployment funds from shutdown-related payouts, but it creates repayment complexity for some workers, adds state administrative burdens, and shifts federal unemployment financing priorities.
Federal employees who performed emergency work during FY2026 or FY2027 shutdown weeks can receive unemployment benefits for those weeks, providing direct income support during lapses in funding.
States will be fully reimbursed by the Treasury (from the Unemployment Trust Fund) for unemployment benefits paid and related administrative costs, preventing hits to state budgets.
Any repayments recovered must be returned to state unemployment funds, helping preserve solvency of state benefit pools and limiting longer-term fiscal strain on state UI systems.
Federal workers who also receive lapse-period pay under 31 U.S.C. §1341(c)(2) will have to repay state unemployment benefits, creating potential financial uncertainty and extra repayment burden for those individuals.
States face increased administrative burden and costs to process applications, certify reimbursements, and recover overpayments, which may strain agency resources even if reimbursed.
Using the Unemployment Trust Fund to reimburse states diverts federal-level UI resources and could affect national unemployment financing priorities or reserve levels, with implications for taxpayers.
Based on analysis of 2 sections of legislative text.
Permits excepted federal employees who worked unpaid during FY2026–FY2027 funding lapses to receive state unemployment benefits, with full federal reimbursement and repayment rules to avoid double payment.
Introduced September 30, 2025 by Angela Deneece Alsobrooks · Last progress September 30, 2025
Allows certain federal employees who are required to work during government funding lapses in FY2026 or FY2027 (so-called "excepted" employees) to apply for and receive state unemployment benefits for weeks when they performed emergency work but were not being paid because of the lapse. States must treat any later federal pay for the same period as repayable overpayments; the federal government (Treasury, using the Unemployment Trust Fund) will fully reimburse states for benefits paid and related administrative costs.