Federal employees working without pay during shutdown won’t get NC unemployment benefits

Federal employees march in protest of the government shutdown in Raleigh

Nearly a hundred government workers marched in protest of the government shutdown outside the Federal Building on New Bern Avenue on Friday, January 11, 2019 in Raleigh, N.C.
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Nearly a hundred government workers marched in protest of the government shutdown outside the Federal Building on New Bern Avenue on Friday, January 11, 2019 in Raleigh, N.C.

The state’s Department of Employment Security confirmed Friday that the federal workers who have been working throughout the government shutdown without pay are ineligible to receive unemployment insurance from the state.

On Wednesday, the U.S. Department of Labor had issued guidance on the issue — determining that furloughed government employees working without pay would not be eligible for unemployment insurance because they would eventually be paid for the time worked, according to the Wall Street Journal.

But DES, the state agency that manages unemployment insurance in North Carolina, did not confirm it had received those instructions until Friday.

“After clarification from the Department of Labor this week, we now have a clear path to pay unemployment benefits to furloughed workers,” DES spokesman Larry Parker told The News & Observer in an email on Friday.

The Department of Labor made that guidance because those workers — people like TSA agents at Raleigh-Durham International Airport, for example — will be paid for the hours they worked once the government reopens, and therefore are not considered unemployed, according to the Wall Street Journal.

Federal workers who have not been working throughout the partial government shutdown are still eligible for unemployment benefits and can have their unemployment claims processed by DES, Parker said referring to the Labor Department’s guidance.

On Wednesday, DES had told The News & Observer that one of the major stumbling blocks to processing unemployment applications from federal workers was unanswered notices of claims.

DES requires that employers respond to a claim of notice before fulfilling an unemployment insurance application. It’s part of its process of ensuring that unemployment claims are legit.

But the people that would respond to those claims for furloughed federal workers are also furloughed themselves, said Lockhart Taylor, assistant secretary for Employment Security, in an interview on Wednesday. “Right now, the new law says that employers have 10 days to respond and we can’t pay out until they respond,” he said.

Parker said on Friday that DES is getting around that stumbling block by not challenging applications from workers that list a federal agency as an employer.

“We are working under the knowledge that they are furloughed,” he said. “If they are listing a federal agency as an employer, and they put in the system that were affected by the furlough, we won’t challenge that. We will ask for pay stubs and W2s to help determine an unemployment benefit amount.”

So far, 800 workers have filed claims with DES because of the shutdown, Parker said, though it is unclear how many of those might now be ineligible because of the Labor Department’s ruling.

For workers who have now gone almost three weeks without being paid unemployment benefits could be a critical stopgap. The maximum unemployment benefit is $350 per week. The average weekly benefit is around $247.

The shutdown has affected a wide range of employees in North Carolina, from Environmental Protection Agency workers in Research Triangle Park to correctional officers at a prison complex in Butner, The News & Observer reported. In total, an estimated 7,800 people in the federal workforce in North Carolina are affected by the shutdown caused by the budget impasse over President Donald Trump’s proposed border wall, The Washington Post reported last week.

Back pay

On Wednesday President Donald Trump signed a bill that will provide back pay to all furloughed federal workers. But just because they will get back pay at some point, does not make them ineligible for applying for unemployment insurance, said Parker, referring to guidance DES received from the Labor Department.

“Based on the response by USDOL, the guarantee of being paid does not impact eligibility until the appropriation is passed and they have received their pay,” he said.

But “If a federal employee receives unemployment benefits during the shutdown and receives back pay wages, they will need to report those earnings and the state is required to seek repayment,” he added.

Throughout the shutdown, another complicating factor for DES has been its small staff’s capacity to handle a surge of unemployment claims from the shutdown as well as the lingering impacts of Hurricane Florence.

While DES has a trust fund balance of more than $3.3 billion to pay unemployment benefits, its own budget for hiring staff was recently cut by 7.5 percent, Taylor said.

And with the agency still handling Hurricane Florence-related claims, DES has had to borrow workers from other divisions to handle the number of claims coming in. “It’s a pretty big impact, considering our claims load is 2,000 claims a week, and certainly, we have been above that since before the Hurricane,” he said.

Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.