Can Federal Employees Collect Unemployment? What to Know

Millions of federal employees are currently facing job uncertainty due to recent moves by the Trump administration, including deferred resignation offers and proposed spending freezes affecting federal grants and loans. While the situation is complex, some federal employees may be able to claim unemployment benefits depending on the circumstances of their job separation.

Why It Matters

The Trump administration released a furlough plan on January 28, offering federal employees a buyout with eight months of pay and benefits as part of the administration’s plan to reduce the federal workforce. As of the deadline on February 6, approximately 20,000 federal employees had accepted the offer.

More than 2 million federal employees are being threatened with furlough or termination if they don’t accept the deferred resignation offer. Additionally, millions more could be impacted by a proposed spending freeze, which affects federal grants and loans across various sectors, including education, healthcare and housing assistance. The spending freeze aims to realign federal spending with the administration’s priorities.

With growing uncertainties around job security, federal employees are increasingly worried about their jobs and financial stability, highlighting the importance for federal workers to understand their rights regarding unemployment benefits.

What To Know

Federal employees can collect unemployment benefits through the Unemployment Compensation for Federal Employees (UCFE) program. Eligibility depends on the circumstances of job separation, such as layoffs, furloughs or resignations under duress.

To apply for unemployment benefits, federal employees should file a claim with the state unemployment agency where they last worked. This process involves submitting the Standard Form 50 (SF-50), which details employment history and provides documentation of earnings.

The amount of unemployment benefits varies by state but typically considers prior earnings. Benefits are generally a percentage of former wages, subject to state maximums. As of recent data from the U.S. Department of Labor, the average weekly unemployment benefit paid to Americans is approximately $463.66 for the month of December 2024, though this amount can vary significantly depending on the state.

Some states also offer additional support during high unemployment periods, which can temporarily increase the average benefit amount. Unemployment benefits for federal employees typically last up to 26 weeks, although this duration can vary depending on the state and specific circumstances. In times of high unemployment, some states may offer extended benefits beyond this standard period.

Furloughed federal employees are generally eligible to file for unemployment benefits through their state’s unemployment insurance program. However, the eligibility criteria and benefit amounts can vary by state.

If furloughed employees receive retroactive pay once the government reopens or they start working again, they are typically required to repay any unemployment benefits received for the same period, as it would be considered a duplication of income. Additionally, employees who are required to work without pay during a shutdown are usually not eligible for unemployment benefits since they are still considered employed and performing work duties.

Deferred resignation, a recent policy trend, complicates unemployment claims. Generally, employees who agree to deferred resignation are not eligible for unemployment benefits because it is considered a voluntary separation. However, if an employee can demonstrate that the resignation was made under coercive conditions or due to circumstances beyond their control, they may still qualify for benefits. Eligibility will ultimately depend on the specific facts of each case and the state’s unemployment regulations.

What People Are Saying

Tamara Slater, shareholder at employment law firm Alan Lescht and Associates, told Newsweek: “Federal employees are eligible for unemployment benefits according to the laws of the state in which they work, just like private sector or municipal government workers. Whether a federal employee will be eligible to receive unemployment benefits depends on a number of factors including the reason for the separation.

For example, resignation in almost every circumstance makes one ineligible for unemployment. It is very unlikely that federal employees who accept the deferred resignation offer would be eligible for unemployment, whether or not they are paid through September 30, 2025, as has been promised; and whether or not they felt coerced into accepting the offer of resignation.”

What Happens Next

A federal judge in Washington, D.C., extended a block on President Trump’s federal funding freeze on February 3 due to concerns that the administration was still moving forward despite previous court orders. Additionally, a federal judge recently halted the Trump administration’s deferred resignation program. Hearings are set for Monday, February 12, 2025, at 2 p.m. ET before U.S. District Judge George A. O’Toole Jr. in Boston. The judge has extended the application deadline until after the hearing.