Furloughed vs. Essential (Excepted) Federal Workers; Who’s Eligible for Unemployment Insurance?
10/16/2025
Federal workers and contractors find themselves dealing with a government shutdown. The shutdown will not only affect federal workers, it will also impact people working for federal contractors, the stores and businesses where those people shop, the creditors they may not be able to pay, etc. A shutdown of even just a few weeks can be enough to produce a significantly negative ripple effect across our entire economy.
The most critical takeaway at the moment is that federal workers are guaranteed backpay during shutdowns, but those workers employed by contractors are not.
Furloughed vs. Essential (“Excepted”) Federal Workers
Federal workers typically fall into two categories during a shutdown. Furloughed employees will neither work nor receive pay. Essential employees, also referred to as “Excepted” workers, are required to work but will not receive pay.
Unfortunately, federal workers deemed essential are required to work without pay and are currently not eligible for unemployment insurance (UI). Essential employees are already eligible for backpay, but UI could help tide them over, particularly if the shutdown goes on for weeks or months.
Federal workers who are furloughed may be eligible for unemployment insurance. The UI program for federal civil servants is called Unemployment Compensation for Federal Employees (UCFE).
How Furloughed Federal Workers Can Apply for Unemployment Compensation
UCFE is administered by the states, so you’ll need to apply for UCFE in the state where you work. You can find your state UI agency and application here.
States will verify your federal employment and earnings. States typically use two forms to verify this information: Standard Form-8 (SF-8), or the Standard Form-50 (SF-50). Unfortunately, many workers may not have received these forms as the shutdown approached. The U.S. Department of Labor has also warned that there may be delays in federal agencies’ verification of workers’ employment.
You can still apply without agency forms or verification. Workers can support their applications with an ES-395 affidavit, “Claimant’s Affidavit of Federal Civilian Service, Wages and Reason for Separation”, available through their state agency, or they can use the form here. This form can be used to confirm that you work for the federal government and, can also be used as proof of your earnings (such as through paystubs or W-2 forms). Please note, however, that if the federal agency you work for subsequently provides information that conflicts with your ES-395, you may have to repay some or all of those benefits.
State eligibility criteria, benefit amounts, and processing speeds will vary. Most states have implemented a mandatory one-week waiting period to receive benefits. While each benefit formula varies, workers can expect to receive a benefit of about one-third to one-half of their salary, up to a maximum benefit. A full table of the minimum and maximum weekly benefits is available here, and includes the information as of January 2025.
If you have difficulty applying for or receiving benefits, you should contact the corresponding state unemployment insurance agency, your union, or UI advocates in the state where you’re claiming benefits.
Be Advised: Backpay and Repayment of Benefits
If you’re a furloughed worker who received back pay after the shutdown ends, you’ll likely have to repay any UCFE benefits you’ve received. While state laws vary, you’ll most likely be found to have a UI “overpayment,” which the state will then seek to recover. As soon as you’ve received back pay, you should repay your state, as the agency could charge penalties for not repaying overpayments in a timely manner.
Layoffs vs Voluntary Separation
If the Administration fires or lays off federal workers, they should be entitled to UCFE. However, workers who receive Voluntary Separation Incentive Payments or take part in a Deferred Resignation Program may not qualify if their separation is determined to be a voluntary resignation without good cause.
Navicore is here to help
If the shutdown has left you struggling financially, a credit counseling session with one of Navicore's certified counselors can help you focus on the next steps to get you through this period. Contact Navicore here.