The Oregon Employment Department will tell federal employees that benefits paid to them as a result of the recent shut down of the federal government are an overpayment and must be repaid.

Oregon’s prior policy did not require repayment of such benefits, based on Oregon law and court decisions over the years. Thursday the U.S. Department of Labor (DOL) issued guidance to the states that changes the status of furloughed federal workers. During the period of the shutdown they are now considered to have been employed and thus not eligible for unemployment insurance benefits.

The department will send a letter to all those who received benefits with this new information, and outline a process for them to repay the benefits.

Approximately 733 federal workers made an initial claim for unemployment insurance in Oregon during the shutdown for a total of $389,739 paid in benefits. 1,153 re-opened an existing claim totaling $449,504. Some of those additional claims may be seasonal layoffs not associated with the shutdown. Their benefits will not be considered an overpayment.

Officials of the Oregon Employment Department had been in discussions with DOL on this issue throughout the period of the shutdown.
On October 11, 2013, DOL issued a directive to states that “Those employees have been furloughed and are eligible for UCFE [the federal unemployment program] under the same state requirements and conditions for other laid-off workers.”

On October 24th, 2013, DOL issued a change to its prior directive to states. It is now directing states that those furloughed federal employees were not eligible for the UCFE program.