Maryland begins unemployment planning for potential federal shutdown

ANNAPOLIS (Oct. 31, 2023)—The Maryland Department of Labor proposed two different methods of compensation for federal employees who could be impacted by a government shutdown next month to lawmakers Tuesday, Oct. 25.

The labor department's deputy secretary, Jason Perkins-Cohen, who was appointed to the position in March, told members of the Economic Matters Committee that federal workers can apply for a loan or unemployment benefits, depending on what they're eligible for.

"Excepted" employees, also known as essential workers, are eligible to receive money from the state's new loan program, which would be put into effect for the first time if the shutdown occurs. Meanwhile, furloughed workers and government contractors can apply for unemployment insurance.

"(If) you're required to work but you're not getting paid, you're only eligible for the loan. And if you're furloughed, which means you can't work, you're not allowed to work, and you're not getting paid, and you're only eligible for UI," said Perkins-Cohen of the unemployment insurance program.

Congress narrowly avoided a government shutdown when the House passed a continuing resolution just hours before its deadline expired on Sept. 30. Now they have 45 days to pass a permanent spending plan for the next fiscal year before the government could again face a shutdown on Nov. 17. Continuing problems selecting a Speaker of the House increase the odds of a shutdown.

The loan program would allow excepted workers to receive a stipend as early as Dec. 4, if they apply when the portal opens on the Monday following the shutdown. As essential employees, they are expected to receive back pay at the end of the shutdown, and will have 45 days to repay the loan when the government reopens.

Unemployment insurance eligibility is for federal workers and contractors furloughed during the shutdown and who won't receive pay for the missed work. These workers may file a claim as early as Nov. 19 and will receive stipends ranging anywhere from $50 to $430 per week.

The committee raised a mix of concerns with the compensation plan, including the lack of resources in the department and inadequate support for constituents that has plagued the department in the past.

"We're still running through problems with UI… everyone here has had an enormous amount of staff time compensated for what can't be done with UI for various reasons. But how can you assure it won't be every day we're getting a call from the same guy and no follow up from UI?" said Del. Steven Arentz, R-Kent, Queen Anne's, Cecil and Caroline.

Economic Matters Chairman C.T. Wilson, D-Charles, speaking to the Department of Labor, said, "At the end of the day, when constituents contact us, they've already contacted you. The problem is when they don't hear back from you, we have failed."

Del. Lorig Charkoudian, D-Montgomery, also raised concerns over the future of the state's trust fund, which needs to increase its taxable wage base. It holds the money that will pay government contractors eligible for unemployment insurance.

"We don't pay attention to UI until it starts falling apart… and this is our chance between crises to really address it and make sure it's a robust system," said Charkudian.

Delegates also addressed concerns over fraudulent claims, referencing news that broke earlier this year about a group of Rockville residents who were indicted for filing more than $700,000 worth of fake unemployment claims during the COVID-19 pandemic.

Perkins-Cohen said the Department of Labor is doing everything it can to make this process as smooth as possible, and added he hopes that people will receive their unemployment and loan benefits as quickly as possible.

A government shutdown would impact more than 140,000 Maryland federal employees, with about 90,000 of them expected to apply for compensation in one of the two categories.

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