Work without pay? Here's what states are doing to deal with employees missing paychecks during shutdown
With about a quarter of the federal government closed for more than a month and employees missing their paychecks for the second time Friday, states are coming to their residents’ aid.
Illinois, Connecticut and Maine are partnering with banks to offer unpaid federal workers no-interest loans. Nevada will defer college fees for such workers and their dependents. New York is extending assistance with utility bills. Rhode Island is looking into measures to provide a break from residential, tax, credit card and auto payments.
But perhaps the boldest move so far has been taken by California, Colorado and Vermont, which have defied a directive from the Department of Labor and opted to grant unemployment benefits to federal employees forced to work without pay during the partial government shutdown.
While the approximately 380,000 federal workers who have been furloughed since Dec. 22 can apply for unemployment, the other 420,000 directly impacted by the shutdown have had to work without pay because they’re deemed essential, and as such are considered employed and not eligible for that benefit.
So they’re getting all the hassle of work and none of the financial reward, at least until the shutdown is over. All 800,000 affected federal workers are expected to eventually receive back pay.
“The individuals who are forced to work have to pay their transportation costs, they can’t take outside part-time employment if it interferes with their federal job, and they may have child care expenses, so it’s even harder on them than on the folks who are furloughed,’’ said Dirk Anderson, general counsel for the Vermont Office of the Commissioner of Labor.
According to Labor Department statistics, unemployment claims from federal workers skyrocketed from 10,454 to 25,419 in the second week of January, when employees missed their first paycheck of the year. They only figure to continue climbing while the shutdown lasts.
That has prompted several states to inquire about extending unemployment insurance to all federal workers affected by the shutdown, not just those who are on furlough. The Labor Department said no dice, reminding them of guidelines most recently applied during the 2013 shutdown.
“States are cautioned that Federal funding for administrative costs or any unemployment benefits paid by the states to such workers will be unavailable,’’ acting Assistant Secretary Molly Conway wrote in a letter to Virginia Gov. Ralph Northam.
“States should not use Federal funds for this purpose and should not expect Federal reimbursement or assistance with regard to recovering any benefit payments when the lapse in appropriations ends.’’
Heavily Democratic California, which has been at odds with the Trump administration on everything from environmental policy to forest management to immigrant protections, took the lead by announcing on Jan. 11 that it would grant those benefits and encouraged its 245,000 federal workers to claim them.
Colorado and Vermont later followed suit.
Virginia, New York, Michigan and Washington, all run by Democratic governors, have sought clarification about the workers’ eligibility, arguing it’s unfair for federal employees on the job who are not getting paid to be disqualified from unemployment insurance.
Washington Mayor Muriel Bowser is also making efforts to extend that relief to essential federal workers.
At a meeting with TSA employees in the Sacramento airport last week, California Gov. Gavin Newsom cited what he referred to as a “jaw-dropping’’ e-mail sent to his state, Washington, Arizona, Oregon, Nevada, Alaska, Idaho and Hawaii, reminding them essential federal workers who are fully employed are not eligible for unemployment funds.
“The good news is, we're going to do it, and shame on them,’’ Newsom said. “They're in essence threatening us for doing what we're doing. So that's why I'm here, to say we're going to do it.’’
The bravado is not quite as daring as it might seem. The states have made it clear to applicants that they’re obligated to pay back the money once they receive the compensation they’ve missed during the shutdown, so the benefit essentially amounts to a loan.
But states do incur administrative costs usually billed to the federal government, and they may be on the hook for those.
“We’re hopeful of sitting down with the U.S. Department of Labor when this is over and try to resolve it, but we understand there may be some federal repercussions,’’ Vermont’s Anderson said. “We’re hoping there won’t be, but we’re prepared for that.’’