Health & Human Services

After Shutdown, Weary Unemployment Offices Tasked with Getting Money Back

Agencies were quick to process claims during the shutdown, but the way states are going about getting that money back from federal employees could be a lengthy one.
October 31, 2013
Several states are now working to get money back form federal workers who collected unemployment during the government shutdown. flikr user Bytemarks

Federal employees may have flooded state unemployment offices at the start of the federal government shutdown this month, but the benefits for which states are now seeking reimbursement are relatively small.

Still, the processes by which states are going about getting that money back looks to be a lengthy one as many states are still figuring out how they get the money back.

In the mid-Atlantic, home to the lion’s share of the nation’s federal jobs, Maryland’s Department of Labor, Licensing and Regulation took approximately 21,000 federal claims during the shutdown, which ended Oct. 16, and paid benefits to approximately 3,900 people.

“The whole shutdown produced loads of extra work for the division of unemployment insurance,” said Maureen O’Conner, spokesperson for DLLR. “People really did have to rally as a team and put off vacations and come in on weekends. Many put in 12-hour days.”

But now that those federal employees received their backpay, the process by which the state is going about getting back roughly $2.4 million in overpayments is far less frenzied. In the next few weeks, the department will send out letters notifying claimants of their ineligibility for benefits and that they were overpaid. The letter (which the department is still developing now) will have information on how and where claimants can send their repayments.

The $2.4 million figure may seem like a lot but it's a small amout for the DLLR – the department paid out $428 million in total claims for fiscal year 2013, which ended June 30.

Because claims take about a week to process, the most furloughed federal employees received was a week’s worth of pay during the two-week shutdown.

The District of Columbia and Virginia paid out far less to federal workers. The Virginia Employment Commission paid a total of $49,228 in benefits to 152 federal claimants. It’s a relatively small figure compared to the average 402,404 claims per year between 2008 and 2011 (more recent data was not available). The commission has yet to notify anyone of overpayment, according to spokesperson Joyce Fogg.

D.C.’s Department of Employment Services paid out $500,000 to 1,700 federal employees who now must give that money back. The figure amounts to less than 10 percent of what the department issues in a typical month; in the month of July alone the department paid out $14.4 million. DOES spokesperson Najla Haywood said the department is sending notices to workers informing them they will be required to pay the funds back directly in a lump sum or establish plans to pay back thier unemployment in installments.

Despite the unusual circumstances surrounding the slew of federal workers filing for unemployment benefits, overpayments of benefits are a common annual occurrence. In 2012, the U.S. Department of Labor estimated that a total of $14 billion in benefits should not have been disbursed. The most common reasons for a determination of ineligibility are: the claimant isn’t actively searching for a job, was fired or quit voluntarily, or returned to work and continued to file claims.

During the 1995-96 shutdown, all federal workers who received unemployment benefits were required to pay back their disbursements. However this year, at least one state is giving federal workers a pass. Roughly 1,300 workers in Oregon who received a total of $680,000 in benefits will get to keep that money because of a rule that allows furloughed employees to keep jobless benefits if it is unclear that they will receive back pay and there is no set date for their return to work.

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