Shutdown Shocker: Unemployment Benefits for All

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Published April 07, 2011

| FOXBusiness

In the event of a government shutdown, some 800,000 federal employees who are furloughed without pay may collect unemployment insurance. 

Government workers are covered under the Unemployment Compensation for Federal Employees Program, which is funded by the federal government, but administered by the states.

Generally, unemployment claims are filed in the place where you work, not where you live. The states are reimbursed by the federal government for the funds they pay out.

The Washington, DC, area would likely feel the brunt of a shutdown. The U.S. Department of Labor told Virginia that 171,000 workers in the state could be eligible. Maryland has 252,000 federal workers in the state.

Maryland and Virginia are preparing for a shutdown; their state labor departments plan to post information on their websites tomorrow, if there is a shutdown, with instructions for workers on how to file.

But not everyone will be treated the same, because state unemployment compensation requirements vary. Some states, like Virginia, have a one-week waiting period before an individual qualifies for payments. Others, like Maryland, will pay immediately.

But workers might not get unemployment if a shutdown is short lived. If an unemployment claim is less than what an employee makes in the week, he or she would not be paid. For example, if a worker could collect a $400 weekly unemployment insurance benefit, but earned $450 for working a partial week, he or she would not collect unemployment.

The claims process will be a little more complicated. Because the federal government would be shut down, employees would have to send in a copy of their W-2 and/or pay stubs because the state would have no way to verify employee wages.

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