While some employees on unpaid status have been taking a fatalistic approach as the partial government shutdown stretches through its third week, others with less of a financial cushion behind them are growing increasingly alarmed. Many of those on furlough are exploring taking outside employment or applying for unemployment compensation benefits.

The Office of Government Ethics—itself one of the agencies partly closed by the funding lapse—had previously noted that taking outside employment is allowable but only within ethics rules including conflict of interest policies. That is a timely warning, given that some companies have started actively recruiting furloughed federal employees for work that would rely on their expertise from their official positions, potentially putting the employee in a precarious position.


OPM guidance on the issue largely mirrors that previously issued by the OGE: “While on furlough, an individual remains an employee of the federal government. Therefore, executive branch-wide standards of ethical conduct and rules regarding outside employment continue to apply when an individual is furloughed. In addition, there are specific statutes which prohibit certain outside activities, and agency-specific supplemental rules that require prior approval of, and sometimes prohibit, outside employment.”

Both OPM and OGE recommend that employees with questions consult their agency ethics officials—who in many cases would themselves be currently on furlough.

OPM policy further states that “It is possible that furloughed employees may become eligible for unemployment compensation. State unemployment compensation requirements differ. Some states require a 1-week waiting period before an individual qualifies for payments.”

A separate OPM document however stresses that “In most states, including the District of Columbia, employees who receive unemployment benefits and also later receive a retroactive payment from their employer for the same time period, will be required to repay the UI benefits received. The state UI agency determines whether or not an overpayment exists and, generally, the recovery of the overpayment is a matter for state action under its law; however, some state UI laws require the employer to recover such overpayment.”

Employees in that situation “will be given the opportunity to voluntarily repay the overpayment first before the state proceeds with any garnishments.”

In all prior partial shutdowns of recent years, furloughed employees later were paid as if they had worked, and Congress is moving to do the same this time. However, that is yet to be finalized and likely would not be formally addressed in whatever measure is enacted to restore funding.