Federal employees to return jobless benefits received during shutdown

Federal employees furloughed during the partial shutdown of the US government this month would have to return any jobless benefits they were eligible for, after the US Congress approved retroactive pay, the labour department said.

States would be required to collect and send back to the federal government unemployment benefits granted to thousands of federal workers after the deadlock and suspension of most salaries for two weeks, under a notice sent to state workforce agencies from Eric Seleznow, an acting assistant secretary at the Department of Labour.

In the first week of the 1-16 October shutdown, the number of federal workers filing for benefits increased to 70,068, 50 times the number of filers the week before, the notice said.

The US Congress had approved payment to employees for the furloughed days with the approval of the budget.

With funds covering the benefits coming directly from the federal government, states are required to spend money only on administrative costs.

Due to its state law, Oregon had said federal employees in the state might be able to retain their benefits.

Reuters quoted Tom Fuller, spokesman for the state's employment department, as saying, with the notice clearing up the confusion, the state would send letters to all those who received benefits requesting they return the money.

According to the state's employment department, about 730 federal workers in Oregon made an initial claim for unemployment insurance during the shutdown and received about $390,000 in benefits.

The state said it expected to be reimbursed by benefits paid by it by the federal government.

However in guidance to states late last week, the labour department said, due to the employees not being in "pay status," all furloughed employees "were not 'unemployed' and were thus ineligible for unemployment benefits."

The Oregon Employment Department said in a news release that it would now tell federal employees the benefits "are an overpayment and must be repaid," adding that  the labour department had changed the directive it had issued earlier this month, which said that federal employees were eligible for unemployment insurance.

Nationally, around 70,000 of the 400,000 federal employees furloughed during the shutdown applied for jobless benefits, though a much smaller number took the steps required to receive them, according to federal and state labor officials.

The agency had said even before the labour department's recent guidance, that it was clear that federal employees in most states would have to repay the benefits.