From CNBC: 2025-03-07 08:23:11

The Trump administration’s mass layoffs of federal workers could overwhelm the Unemployment Compensation for Federal Employees program, causing delays in aid for jobless workers. Over 62,000 federal workers lost their jobs in February alone, leading to the highest year-to-date job cut total since 2009. States may struggle to process the surge of claims.

The UCFE program for federal workers differs from regular unemployment insurance, requiring more manual inputs that slow the process during high volume. The federal system is small and works by hand, with a more complicated process for verifying claims accuracy. The federal government may contest claims, further delaying benefits for workers.

Federal workers may face financial hardship if they can’t access benefits quickly, especially in regions most impacted by layoffs. The Trump administration has faced legal challenges to its mass layoffs, with a federal judge blocking directives to fire probationary workers. The Merit Systems Protection Board temporarily reinstated thousands of workers at the USDA.

Read more: DOGE layoffs may ‘overwhelm’ unemployment system for federal workers