Mass Federal Layoffs Present Unprecedented Unemployment Insurance Challenges

Communities across America are reeling from a sudden and unprecedented surge in workers laid off from federal jobs. Elon Musk¹ announced the intention of his Department of Government Efficiency (DOGE)—an initiative within the Trump administration—to sever hundreds of thousands of federal employees. In days leading up to the President’s Day holiday weekend, blanket layoff announcements targeted 200,000 probationary employees,² most of whom had been in their appointments for less than a year. Many of these workers were given thirty days of paid administrative leave, which means they will be left without a paycheck as of early March.³

If this action survives ongoing legal challenges, it amounts to more than 6 percent reduction of the federal workforce, and it does not include another 75,000 individuals who took the so-called Fork in the Road buyout, or the tens of thousands of workers at the U.S. Agency for International Development (USAID) and the U.S. Department of Education, which the Trump administration has also committed to closing.⁴ Moreover, on February 26, the White House issued a memorandum to all agency heads looking for additional reductions in force (RIF), the federal term for wide-scale planned layoffs.

The legality of these dismissals is being challenged,⁵ but the outcome of this challenge is unknown and it is unlikely to be resolved before these laid off federal workers stop receiving paychecks. Therefore, it is essential that these workers are able to access unemployment insurance (UI) benefits as soon as possible. This report will explore the barriers that displaced federal workers will face in the event they do find themselves out of work and forced to rely on unemployment insurance benefits, as well as the steps that states can take to ensure more timely delivery of benefits.

Timely Unemployment Benefits Are Vital for Families and Regional Economies

UI benefits are the first and best lifeline to prevent hardship for impacted workers, their families, and their regional economies. Even if federal workers are involved in individual or collective challenges to their terminations, workers in need of support should apply for benefits as soon as they are off of federal payrolls. Federal employees have earned the right to these benefits and are entitled to that support in the same way any involuntarily unemployed worker is.

Unfortunately, many federal workers could struggle to get timely access to UI benefits when their paychecks suddenly stop. Federal employees are covered by Unemployment Compensation for Federal Employees (UCFE),⁶ a program operated by the states but separate from the standard federal–state unemployment insurance system. As UCFE is run separately from the larger system, it does not use the automated systems developed to regularly collect wage records and automatically communicate with private-sector employers to verify information. Instead, UCFE depends on a cumbersome wage request system between federal agencies and states that is structurally less resilient than the system for standard UI—and this lack of resilience may be amplified if federal HR departments are unresponsive. Moreover, the controversial methods that federal agencies are currently using to cut the workforce will complicate eligibility decisions by state agencies and could lead to further delays. UCFE (and UCX, the counterpart for ex-military service members) will be especially confusing for many federal workers who have not typically faced unemployment and may be filing for the first time as they navigate the personal stress of a sudden layoff.

Even if laid off workers manage to collect UCFE benefits, state policies will mean those benefits will fall far short of replacing their prior income. Our analysis finds that maximum state UI benefits represent, on average, just 39 percent of prior salaries of federal workers. This immediate reduction in spending power will erode the savings of federal employees, squeezing their ability to provide basics such as food, housing, transportation, medicine, and education to themselves and their families at a time of rising prices. Furthermore, federal layoffs could suck billions of dollars out of local economies as restaurants, grocery stores, and more lose out as families are forced to cut back on expenses.

While these layoffs will heavily hit the Washington, D.C. metropolitan area, poignant stories of federal workers fired from their jobs at agencies such as National Park Service (NPS) and the U.S. Forest Service⁷ underscores the widespread impact of these layoffs. They include many service-disabled veterans, like David Rice, who moved across the country and bought a home to take a job in Florida for the U.S. Department of Energy.⁸ Unexpected layoffs targeted unexpected federal employees like Ryleigh Foster, working for the Forest Service in Northern Michigan, who had been counting on her $40,000 job per year job and health care to start a family.⁹ Timely delivery of UCFE is critical—not just for these workers and their families directly impacted, but also entire communities.

10 Things Federal Workers Should Know About Unemployment Compensation for Federal Employees (UCFE)

1. File in your last duty station, and that state will determine your benefit amount. Your SF-50 will list your official duty station. File for UCFE benefits in that state. Use the Service Locator to find out how to file on-line or by phone.¹⁰
2. File with your SF-50 and SF-8, but don’t wait. The SF-8 provides the correct mailing address for the federal agency, which the state will use to mail documents verifying employment and other reasons. Your final SF-50 provides wage and separation information the state may need to determine your weekly benefit amount. However, don’t wait to file benefits until you get these forms. File as soon as you stop receiving a paycheck and you can send additional information later. States may back-date your claim but they are not required to.
3. File for UI even if you are challenging your termination. Many terminated workers are challenging their separation. As soon as the federal paycheck stops, workers should file for unemployment benefits while their appeal is pending. If workers are successful and receive back pay, they can pay back the state for any unemployment benefits received (which would represent an interest free loan).
4. Don’t panic if you get a $0 monetary determination. Unemployment compensation for federal employees works differently than regular UI for private sector employees. Private employers report wages each quarter for all employees into state databases that are accessed when their laid off workers apply. States must request data from your federal agency by mail to the point of contact indicated on your SF8. So workers have $0 wages when you first apply if you only worked in the federal government.
5. The process may take twenty-one days or more. Most UI claims are paid within fourteen to twenty-one days from when they are filed. Individuals who resigned their position, or were terminated for performance, could experience a longer delay as the issue is investigated and it is determined whether an individual is eligible for UI benefits.
6. Your home agency must verify your wage. The process for UCFE is less automated than regular UI, which can make the process longer. Federal agencies processing incoming claims from state UI agencies are at a high level of stress in 2025 which may also contribute to delays.
7. If your claim is delayed, request a wage affidavit. Your former employer (federal agency) must verify your employment, and reason for separation. If they don’t respond within twelve days, the state can have you fill out an ES-935, a Claimant’s Affidavit of Federal Civilian Service, Wages and Reason for Separation, to move your claim along. If your claim is delayed, call your agency and request they process your claim with an affidavit.
8. Check your portal, email and mail frequently—you may need to respond to requests for information. Recently separated federal employees are reporting multiple requests for information from state agencies. Don’t fret. States need to collect information to verify that your separation is covered under state law, and to ensure that you (and not a criminal impostor) is filing. Check frequently for forms you can fill at home, or requirements to come in person to a local office.
9. Certify and report your work search while you wait. Unemployment benefits are only payable for weeks that you have certified that you are unemployed and looking for work. Certification should be done each week, including while you are waiting for benefits. Look on line or in the state’s portal for directions to “File Weekly Certification.” You will have to continue certifying for the duration of your claim, and follow rules to document work search efforts (screenshots of online applications are a great place to start). In most states there is a one-week waiting period. This means that you will not receive payment for the week under which your initial certification was filed.
10. Rules limit how much extra earnings you can receive while collecting UCFE. You may pick up contract or freelance work while looking for something permanent, but this will affect your UI benefits. Freelance or consulting work is considered employment for UI purposes. Individuals earning more than their weekly benefit amount as a consultant (or in any part-time work) are unlikely to be eligible. Report any earnings after you are laid off to the state on a weekly basis, and your eligibility will be determined under partial benefit rules. If you do freelance work one week but not the next, you may be able to collect benefits for those weeks you are fully unemployed.

Hundreds of Thousands of Terminations by DOGE Would Damage Regions and Overwhelm UCFE System

DOGE and the Trump administration have set a goal of cutting 10 percent of the federal workforce,¹¹ an arbitrary number that will have widespread harm across the federal workforce. Given recent announcements by the White House of additional workforce reductions,¹² it is reasonable to anticipate even greater layoffs, perhaps even reaching 15 percent. As demonstrated in Table 1, such layoffs would impact as many as 450,000 people across the country. Recently, layoffs have targeted 200,000 probationary employees—workers who have been in their position for less than one to two years. Probationary employees may be federal workers who have years of experience but recently started a new position,¹³ or were hired through accelerated hiring authorities such as Schedule A for disabled applicants. The disabled workers being fired are disproportionately employed in agencies related to the military,¹⁴ such as Veterans Affairs and the Air Force or are service-disabled veterans working in civilian agencies.

Despite a perception that federal civilian employment is located primarily in Washington, D.C. and immediate surroundings, there are more than 75,000 federal workers in states such as California, Illinois, Florida, Georgia, Maryland, New York, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and Washington State. And outside of the Washington, D.C. metro area, the states of New Mexico, Hawaii, and Alaska have the highest shares of federal workers as a percent of the state’s overall workforce.¹⁵ The sudden loss of 10 percent of federal jobs across so many states is reminiscent of the sharp decline in the auto and steel industries in the 1980s and during the great recession, when factories shut down and families struggled to pay for the basics as they scrambled to find new jobs at a time when so many others were looking for work. Nationally, it would surpass historic mass layoff actions by single employers, such as U.S. Steel’s cuts of 55,000 jobs from 1980 to 1988,¹⁶ or General Motors cuts of more than nearly 50,000 hourly workers in 2009.¹⁷ Indeed, it’s possible the actions in the first three months of 2025 could be the largest mass layoff by a single employer in U.S. history. The impact will reverberate past these individual families, resulting in reduced economic activity as families will see their spending dramatically reduce at local businesses.

UI benefits can and should play a critical role in blunting this economic damage, but current policies will limit these effects. States cap wage replacement provided by UI at a statutory maximum weekly benefit. As demonstrated in the map below many state UI programs have benefit amounts that are too low for laid off federal workers to get by. Indeed the maximum weekly benefits in these states only average 39 percent of a federal worker’s wages. In some states, such as Alabama, Florida, Maryland, Mississippi, Virginia, and Washington, D.C., the maximum weekly benefit is so low that it covers less than one-fifth of a federal worker’s wages. Especially for federal workers in high cost areas, such as the Washington, D.C. metro area, these limited benefits will not go a long way in covering the basics of food, rent, and transportation. The states with the highest wage replacement rates cover 60–75 percent of a workers’ wages. However, only five states—Iowa, Maine, Massachusetts, Minnesota, and Montana—have benefit amounts that reach this level.

Map 1

States Must Focus on Ensuring Timely Delivery of Benefits

The pandemic demonstrated the challenges states have in delivering benefits to workers during times of crisis, especially when it comes to customer experience and timeliness of payments. The sudden surge of claims due to federal layoffs has some worrisome similarities to the pandemic, despite its much smaller scale. States will be asked to process UCFE claims at dramatically greater scale than they ever have before—essentially, jobless federal workers will be a new population with little experience with the UI system accessing a program unaccustomed to such levels of demand. State policymakers, and advocates and unions in these states, can go a long way in ensuring that workers can access the support that unemployed workers need.

When making a benefits determination for a fired federal worker, states are directed to verify the wages and reason for separation of employment from each federal agency by sending an ES-931, Request for Wage and Separation Information. However, if the federal agencies do not respond within twelve days, federal rules direct the states to take evidence provided by workers, such as their pay stubs, using an ES-935 form (Claimant’s Affidavit of Federal Civilian Service, Wages and Reason for Separation) and to pay benefits paid on that information.¹⁸ It is incumbent on states to closely follow this guidance, ideally collecting wage and separation information at the time of the initial application, so they can quickly move the claim along if the federal agency does not respond to the ES-931. To this point, federal guidance¹⁹ issued regarding federal unemployment during recent government shutdowns encourage states to have workers file an affidavit, using available proof, given “limited federal HR resources” to respond to ES-931 forms. Given the volume of federal terminations and the chaotic environment facing HR staff, delays on the federal side can be expected. While states may be hesitant to pay out benefits to larger numbers without verification from the federal government, former federal workers should not be left holding the bag without the benefits they so desperately need. States can pay out UCFE benefits using the affidavit and then adjust them during the benefit year if subsequent information impacts eligibility or the benefit amount. Like in other emergencies, states should be careful to protect programs from fraud, especially in affidavit claims, by deploying identity verification and other enhanced fraud prevention techniques.

Moreover, state agencies don’t have to wait for federal employees to file benefits to take steps that can facilitate aid. States can reach out to federal employers that have a large footprint of employees in their state and request a census of employees that they could use to securely cross-check incoming claims. States could work with civic tech partners like Code for America or US Digital Response, or private sector technology vendors, to establish automations for the process of reaching out to federal agency contacts and ingesting documents. Washington, D.C., Maryland, and Washington State²⁰ are examples of states that have published customized FAQs for federal employees. Maryland’s resources²¹ include information about job search assistance and other critical resources. States could go further and set up dedicated call center lines with staff that have been trained in-depth on UCFE. State legislators could support federal workers by directing additional state funded assistance on top of unemployment benefits, as was recently provided after Hurricane Helene in North Carolina,²² or additional job matching and job search assistance especially to speed connections of federal workers to local and state government jobs.

DOGE’s Termination Tactics Could Make It Harder for Workers To Get UI Benefits

Rather than using proscribed reduction in force mechanisms to lower federal employment levels, DOGE has used unconventional methods. UI laws would treat most separation actions in a reduction in force as layoffs not requiring lengthy reviews. However, because DOGE’s tactics have worked outside of these typical rules, workers could face delays in receiving benefits, if they receive them at all.

Probationary Employees

Thousands of probationary employees are being terminated, irrespective of their individual performance rating or their roles in their agency. This is a hallmark of a mass layoff, akin to the elimination of a shift at a factory or the closing of a company. However, most of these workers have received letters saying that their “performance has not been adequate to justify further employment at the Agency.”²³ State agencies should look past this subterfuge, assess the totality of the facts—including the widespread news coverage of mass layoffs of probationary employees—and swiftly pay these claims as layoffs. If they do not act in this way, frontline staff at these agencies could misclassify these cases as potential firings for misconduct, and waste valuable time and resources in additional adjudications and fact findings. While many workers would likely prevail once the state had all the facts, treating these layoffs initially as terminations for cause would nonetheless slow the process of getting benefits. States can avoid this misstep by training staff about this pattern of cases before they hit the states. Probationary employees given layoff notices were put on administrative leave through on or about March 7, after which they will be laid off and eligible to apply for unemployment benefits.

End to Remote Work

In one of his first executive acts, President Trump ordered federal agencies to “terminate remote work arrangements,”²⁴ and the U.S. Office of Personnel Management (OPM) directed agencies to be in compliance with telework policies within thirty days after January 22, 2025.²⁵ One intended outcome of this order is obvious—workers who determine that they cannot commute every day into an in-person location are likely to resign. Eligibility for UI for these workers will likely hinge on whether states see a worker’s decision as personal, or because of an unreasonable employer demand. For example, Texas’s policy and appeals manual²⁶ indicates someone who quit after the employer transferred them to a position that required an eighty-mile commute would be eligible for UI benefits, while someone who refused to accept a transfer within a reasonable distance would be not. Thus remote work cases are likely to be settled on a case-by-case basis—indicating that such workers should file benefits and argue that the change in commute was an unreasonable change in conditions. Workers should be aware that quitting because of end to telework arrangements (splitting time between home and work) is far less likely to be eligible than an end to a remote work arrangement that might be far from any duty stations.

Fork in the Road

On January 28, 2025, the Office of Personnel Management emailed most federal civilian employees an email entitled “Fork in the Road.” The email offered individuals a chance to resign their position, with full pay and benefits through September 30, 2025. If not, OPM stated that they “could not give you full assurance regarding the certainty of your position or agency but should your position be eliminated you will be treated with dignity and will be afforded the protections in place for such positions.”²⁷ If some of the 75,000 individuals²⁸ who took the offer choose to file for unemployment benefits after September 30, they could be disqualified for voluntarily leaving their employment. Indeed, a Washington, D.C. government fact sheet²⁹ states: “A buyout offer to a federal government employee that requires voluntary resignation from employment may impact your ability to receive unemployment compensation. Under most circumstances, if you resign or quit your job, you may be ineligible to receive unemployment insurance (UI) benefits.” To be eligible, these workers would have to argue successfully that they “quit in lieu of discharge,” meaning that they only quit knowing that they would be imminently laid off. Indeed, a digest of appeals cases by the Maryland Department of Labor³⁰ includes several that find that when a claimant “resigns in lieu of discharge,” it “does not show the requisite intent to quit.” While the outcome for workers who took the offer is uncertain, applicants can apply for benefits and argue that the logic surrounding quitting in lieu of discharge applies to Fork in the Road exits. Those individuals who accepted the Fork in the Road offer but were in vulnerable jobs to layoff like those in climate-related probationary jobs³¹ are the most likely to survive a case-by-case review.

Conclusion

Federal employees have been the victims of a sudden, traumatic, mass layoff. The UCFE unemployment benefits program provides the first line of economic defense for these families. Yet, federal workers are likely to face multiple hurdles to securing assistance, and benefits will provide very limited income support averaging only 39 percent of prior wages. State and federal agencies responsible for this program have an urgent responsibility to expedite the processing benefits and smooth over administrative barriers that could slow access to benefits.³²

1. “Musk Starts Mass Government Layoffs, Targets Roughly 200,000 Employees,” ABC News, February 16, 2025, https://abcnews.go.com/ThisWeek/video/musk-starts-mass-government-layoffs-targetsroughly-200000-employees-118876421.
2. Chris Megerian and Michelle L. Price, “Trump Administration Begins Sweeping Layoffs with Probationary Workers, Warns of Larger Cuts to Come,” Washington Post, February 13, 2025, https://www.washingtonpost.com/politics/2025/02/13/trump-federal-workers-layoffs-doge/1cc0a0aa-ea5b-11ef-969b-cfbefacb1eb3_story.html.
3. At the time of publication of this report, it appeared as if the Trump administration was making efforts to revise the executive order to avoid legal challenge. See Jennifer Bendery and Dave Jamieson, “Trump Abruptly Walks Back His Directive To Fire Thousands Of Federal Employees,” HuffPost, March 4, 2025, https://www.huffpost.com/entry/trump-reverses-directive-fire-federal-employees_n_67c65042e4b044c440ed75bd.
4. Heather Richards, “Interior’s ‘Fork in the Road’ Resignations: 2,700 People,” E&E News, February 14, 2025, https://www.eenews.net/articles/interiors-fork-in-the-road-resignations-2700-people/.
5. “Federal Workers File Class-Wide Complaint Challenging Mass Terminations with Office of Special Counsel,” Democracy Forward, February 14, 2025, https://democracyforward.org/updates/federal-workers-file-class-wide-complaint-challenging-mass-terminations-with-office-of-special-counsel/.
6. “Unemployment Compensation for Federal Employees (UCFE) Fact Sheet,” U.S. Department of Labor, accessed February 20, 2025, https://oui.doleta.gov/unemploy/docs/factsheet/UCFE_FactSheet.pdf.
7. Gina Silva, “Thousands of National Park, Forest Service employees laid off amid Trump, Elon Musk’s budget cuts,” Fox11 Los Angeles, February 26, 2025, https://www.foxla.com/news/thousands-national-park-forest-service-employees-face-layoffs-amid-trump-elon-musks-orders.
8. “The latest: Federal workers face mass layoffs,” MPRNews, February 15, 2025, https://www.mprnews.org/story/2025/02/15/-latest-trump-federal-workers-face-mass-layoffs-gender-affirming-care.
9. Emily Davies, “She hoped Trump’s victory would change her life, but not like this,” Washington Post, February 27, 2025, https://www.washingtonpost.com/politics/2025/02/27/fired-federal-worker-trump-voter/.
10. “Find Unemployment Benefits,” U.S. Department of Labor, accessed February 20, 2025, https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/Find-Unemployment-Benefits.aspx.
11. Andrew Howard, “Mass Layoffs, Court Challenges and Buyouts: Making Sense of Trump’s Plans to Shrink the Federal Workforce,” Politico, February 14, 2025, https://www.politico.com/news/2025/02/14/trump-federal-worker-layoffs-explainer-018912.
12. Amanda Friedman, Ali Bianoc, and Danny Nguyen, “Musk and Trump’s Federal Layoffs are Just Getting Started,” Politico, February 26, 2025, https://www.politico.com/news/2025/02/26/trump-administration-federal-agencies-mass-layoffs-00206222.
13. Monica Sager, “What Is a Probationary Employee, Anyway?” Newsweek, February 18, 2025, https://www.newsweek.com/probationary-employee-federal-government-donald-trump-doge-budge-cuts-2032695.
14. “FedScope,” U.S. Office of Personnel Management, accessed February 20, 2025, https://www.fedscope.opm.gov.
15. Ben Zipperer, “Federal Workers by Residence—Analysis of 2023 American Community Survey and Current Employment Statistics data,” Economic Policy Institute, accessed February 18, 2025, https://economic.github.io/federal_workforce/.
16. Chris Lee, “General Motors to Cut 47,000 Jobs Worldwide,” Dayton Business Journal, February 17, 2009, updated February 18, 2009, https://www.bizjournals.com/dayton/stories/2009/02/16/daily23.html.
17. Ibid.
18. When the state employment security agency (SESA) does not receive the federal agency response within twelve days of the request date, a financial and nonmonetary determination will be issued on the basis of the claimant’s information as provided on the ES-935. Therefore, the federal agency should review the information on the ES-935 to be sure that the ES-931 and ES-935 agree. A rebuttal is required if the federal findings and the ES-935 conflict.
19. Angela Hanks, “Unemployment Insurance Program Letter 03-22,” U.S. Department of Labor, November 2022, https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2021/UIPL_03-22.pdf.
20. Angela Hanks, “Unemployment Insurance Program Letter 03-22,” U.S. Department of Labor, November 2022, https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2021/UIPL_03-22.pdf.
21. “Federal Workers Resources,” Maryland Department of Labor, accessed February 20, 2025, https://labor.maryland.gov/federalworkers/.
22. “Governor Cooper Issues Executive Order Increasing Unemployment Payments for North Carolinians in Wake of Layoffs,” Office of Governor Josh Stein, October 16, 2024, https://governor.nc.gov/news/press-releases/2024/10/16/governor-cooper-issues-executive-order-increasing-unemployment-payments-north-carolinians-wake.
23. Murray Robinson (@dennycrum), “Here is what Dems and their surrogates in the press either don’t know or conveniently forget, a new hire probationary employee in the federal government can have their employment terminated for no reason at all…,” X (formerly Twitter), February 21, 2025, https://x.com/dennycrum/status/1893064942456103351.
24. “Memorandum on Return to In-Person Work,” The White House, January 20, 2025, https://www.whitehouse.gov/presidential-actions/2025/01/return-to-in-person-work/.
25. Drew Friedman, “OPM Directs Agencies to Quickly Comply with Trump’s Return-to-Office Mandate,” Federal News Network, January 23, 2025, https://federalnewsnetwork.com/workforce/2025/01/opm-directs-agencies-to-quickly-comply-with-trumps-return-to-office-mandate/.
26.  “Appeals Policy and Precedent Manual,” Texas Workforce Commission, accessed February 20, 2025, https://www.twc.texas.gov/sites/default/files/appeals/docs/appeals-policy-precedent-manual-twc.pdf.
27.  U.S. Office of Personnel Management, “Original Email to Employees,” January 28, 2025, https://www.opm.gov/fork/original-email-to-employees/.
28. Ronnie Dungan, “75,000 Federal Workers Take Up Trump Buyout Offer After Judge Releases the Handbrake on Layoffs,” HR Grapevine, February 13, 2025, https://www.hrgrapevine.com/us/content/article/2025-02-13-75000-federal-workers-take-up-trump-buyout-offer-after-judge-releases-the-handbrake-on-layoffs.
29. “Federal Government Employees: Frequently Asked Questions,” District of Columbia Department of Employment Services, accessed February 20, 2025, https://does.dc.gov/service/federal-government-employees-frequently-asked-questions.
30.  “8-1001: Unemployment Insurance Appeals Decision,” Maryland Department of Labor, accessed February 20, 2025, https://www.labor.maryland.gov/uiappeals/decisions/8-1001.shtml.
31. Hannah Natanson, “Fork Resignation: Fired Anyway—Trump’s Federal Workforce Cuts,” Washington Post, February 20, 2025, https://www.washingtonpost.com/nation/2025/02/20/fork-resignation-fired-anyway-trump-federal-workers/.
32. Thanks to TCF intern Sun Wo Kim for research assistance, and to Flannery O’Rourke and Michelle Evermore for helpful feedback on this report.

Tags: Government layoffs, ucfe, unemployment insurance