Are fired federal workers eligible for Colorado unemployment?
Quick links: Federal workers eligibility for state benefits | Who pays for federal workers | Ibotta cuts 8% | Another nonprofit unionizes | Mining company’s 893-job expansion in Grand Junction | Colorado job data resumes after suspension
Federal workers in Colorado who lost their jobs this month aren’t showing up yet on the state’s unemployment rolls. But they’re out there. We’ve heard from some of them.
Only two dozen federal workers had filed for unemployment benefits as of Tuesday, according to the Colorado Department of Labor and Employment. And Thursday’s weekly unemployment data had 114 fewer first-time jobless claims came in at an unadjusted 3,273 for Colorado in the week ending Feb. 15 — too early to capture the impact of the mass layoff notices sent Feb. 14, which some dubbed a “Valentine’s Day Massacre.”
Unemployment claims from federal workers are, so far, in line with historical trends, said Tim Wonhof, economist in CDLE’s Office of Labor Market Information.
“Federal (unemployment insurance) claims typically peak in December and January each year,” Wonhof said in an email. “We have not seen an uptick to claims by former federal workers. That stated, impacts of the recent federal dismissals could take time to be evident in the data.”
He shared a chart:
Federal workers are a unique workforce in Colorado. Their employer doesn’t pay for unemployment insurance like the rest of employers in the state. Federal workers are also exempt from certain policies, like deductions for Colorado’s newish paid-family leave program.
And federal employees are nearly everywhere in the state. According to data from the U.S. Office of Personnel Management, the HR branch of the federal government, about 45,000 federal civilian workers were employed in all but two counties (Hinsdale and Mineral).
That excludes active military, postal workers, national security agencies and a few other departments. Add those employees in and Colorado’s labor department estimates there are 57,000 federal workers statewide.
The U.S. government employs 2.4 million civilian workers, excluding active duty military and Postal Service employees. Ongoing workforce reductions by the Trump administration aim to reduce the “unnecessary footprint of government,” and save some of the $300 billion spent on compensation for civilian employees in 2022, says a White House fact sheet.
The chaos and disruption caused by the upheaval, though, isn’t good business practice, said Wayne Cascio, a long-time faculty member at University of Colorado Denver and now a distinguished university professor emeritus.
“It’s often said that the first casualty in a downsizing is employee morale. What happens is people start thinking, start trying to get answers to all the me questions, what about me? What about my job? My career? And they start sprucing up their resume, checking out job boards,” Cascio said. “There’s a cost in productivity. No question about that.”
Large losses can be challenging for any businesses to recover from, but more so for employees who now have a mark on their resumes, he said. And if a company loses too many workers, the cost to find replacements is often higher than it would have been to retrain existing staff. Senior-level executives can be twice as expensive, he added. Mass firings without a change in strategy rarely pays off.
“Just as a citizen, I’m sure there is waste. I’m sure that there is, maybe, overstaffing in some departments. But typically it takes time to ferret that out and to be able to identify it,” Cascio said. “For example, in the Pentagon, you could have weapons systems that are way over their budgeted costs. Maybe you don’t need them anymore. Those can yield huge savings. But that’s the kind of evidence I’d like to see. Evidence of this waste.”
Are federal workers eligible for state unemployment?
Yes. At least they’re eligible to apply, according to the state’s labor department. Normally, anyone who lost a job at no fault of their own can apply for state unemployment benefits, which pay 55% of one’s weekly wage averaged over 12 months.
That includes federal workers who received the form letter that their termination was due to “performance” and not “demonstrat(ing) that your further employment at the agency would be in the public interest.” They will be treated like everyone else, said a state labor department spokesperson. Decisions are made on a case-by-case basis.
“A federal worker’s eligibility for unemployment benefits will be determined during the typical fact-finding process with the federal employer on each individual claim. As with any other unemployment claim, any party that disagrees with the decision has the right to appeal it,” Philip Spesshardt, director of CDLE’s Unemployment Insurance Division, said in an email.
Federal workers who voluntarily signed up for deferred resignation (the “Fork in the Road,” which essentially provides full pay and benefits until Sept. 30 with no expectation that the person needs to work) can also file for unemployment if they resigned only to avoid getting laid off. The labor department advises that those workers should pick “quit” when asked why they are out of work. But such workers still getting paid may not be eligible to receive unemployment pay simultaneously.
The first round of layoffs did appear to hit a certain type of worker: those on probation, which include recent hires or recently promoted workers in new roles.
One federal worker who spoke to The Colorado Sun and said she’d started working at the Denver Federal Center in Lakewood in September. She hasn’t even had a complete performance review (“We were supposed to have a mid-year check in next week,” she said). She got the form letter that her job was getting axed due to “performance,” she said.
She filed for unemployment in Colorado immediately.
Who pays for federal workers’ unemployment in Colorado?
In Colorado, like all states, the money unemployed workers receive as they search for a new job comes from the state’s unemployment insurance trust fund.
Employers, and not taxpayers, pay for the fund as part of payroll taxes. The money helped hundreds of thousands of Coloradans stay partly afloat during the pandemic, even though it ran out of the initial $1 billion and had to borrow from the federal government. That trust fund was back up to $1.027 billion, as of the end of December.
But, as mentioned, the federal government doesn’t contribute to the state’s unemployment trust fund. In the past, if Colorado’s labor department deemed an unemployed federal worker eligible for benefits, the worker got paid. The state was reimbursed “dollar for dollar” by the federal government.
“The federal government has always met its obligation to reimburse the state for benefits paid and there is no indication that the federal government would not continue to meet this obligation when benefits have been paid on a federal unemployment claim,” Spesshardt said.
OPM, the federal human resources agency, did not respond to requests for comment.
Brian Stutheit, a Denver attorney specializing in employment cases at Stutheit & Gartland, P.C., wasn’t familiar with federal contributions but does worry about the state’s system if it suddenly sees a sudden increase in federal worker claims.
“My greatest fear is that Colorado will not manage claims well. Colorado failed miserably in claim processing during the pandemic, and even today I have several calls per week from people who are, inexplicably, asked to repay their pandemic benefits from years ago,” Stutheit said in an email. “They are unable to speak to an agent who can explain why this is happening.”
What to expect if you’re filing for unemployment
The labor department set up a new page online this week to help federal workers through the process, but much of the advice is useful to anyone who’s suddenly out of work.
➔ NEW state resource: Colorado’s labor department just added a federal worker resource guide: >> View
Related Sun stories:
➔ A hiring freeze put federal firefighters in limbo. Here’s what that could mean for wildfire in Colorado. The hiring freeze, along with layoffs of U.S. Forest Service workers tasked with mitigation, could leave the state less prepared for the rapidly approaching peak wildfire months >> Read story
➔ More than 150 Forest Service workers managing public land in Colorado lose jobs as part of Trump cuts. The Forest Service, National Park Service, U.S. Fish and Wildlife Service and Bureau of Land Management have all seen job cuts. Colorado communities that fund federal positions are worried their workers will be targeted. >> Read story
Reader poll: What’s your job?
Federal employees, King Soopers workers and restaurant workers who work in the kitchen or up front for tips. All these jobs have been in the news this month. Is that you or do you know someone whose story needs to be told?
If you missed this last week, you can still help us report on what’s happening in Colorado by taking and sharing the latest What’s Working reader poll.>> cosun.co/WWjobs2025
➔ ICYMI: King Soopers and grocery workers end strike for 100 days as bargaining resumes. No tentative contract was reached yet, but the sides agreed to get back to the table to negotiate. Some workers were at risk of losing health coverage. >> Read story
Sun economy stories you may have missed
➔ Effort to save restaurants by reducing base pay for tipped workers in Denver, Boulder clears first Colorado Capitol hurdle. House Bill 1208 would lower tipped-worker pay by as much as $4 an hour in Denver, but that reduction would go far in helping restaurants. >> Read story
➔ Colorado’s budget hole is now $1.2 billion, as Medicaid costs continue to climb. The rise in Medicaid costs, which have continued unabated since last spring, remain the single biggest driver of the state’s budget woes >> Read story
➔ How Colorado lawmakers and the governor want to incentivize the construction of affordable condos. House Bill 1272 would rewrite the so-called construction defect liability rules for condos sold for up to $1.2 million. >> Read story
➔ Colorado Medicaid program paid for dead people to receive health care, federal report alleges. An audit from the Office of Inspector General uncovered more than 220,000 payments for Medicaid enrollees who had already died, but Colorado disputes the claims >> Read story
➔ In a pricey landscape, Gunnison’s Cranor Hill hangs on as a cheap, charming place to ski. Since the 1960s, the city of Gunnison has kept Cranor a place for locals to hit the slopes as part of Colorado’s tradition of city-owned hills. >> Read story
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➔ Interstate power lines threaten farmers’ land in southeastern Colorado. A federal plan to accelerate electrical grid updates is meeting major resistance in communities across the country, including three Colorado counties >> Read story
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Other working bits
➔ Ibotta cuts 8% of workforce ahead of earnings. Denver’s mobile shopping app developer Ibotta told employees on Friday that it’s laying off 8% of its staff companywide. Based on the company’s staff size of 858 people in September, that is roughly 70 people.
“Today, we announced a reduction in our workforce as part of a strategic realignment based on our business priorities,” said spokesperson Hilary O’Byrne in an email on Friday. “We are striving to minimize the impact and ease the transition for our employees.”
She declined to share more since the company is in a quiet period ahead of its fourth-quarter earnings release on Wednesday.
The homegrown tech company, which has a shopping app that offers cash back to consumers on purchases from a variety of brands and stores, went public last year and closed its first day of trading at $103.25. On Friday, company shares were $65.25. In November, the company’s net income had doubled in the third quarter to $17.2 million on higher total revenues to $84.5 million compared to a year earlier. Ibotta also announced it was moving its headquarters a few blocks to Denver’s 16th Street Mall, where there’s room for 500 employees.
➔ Another Colorado nonprofit votes to unionize. Employees at Metro Caring, a Denver nonprofit working to reduce world hunger, voted 15-2 last month to unionize. They’ve aligned with the Denver Newspaper Guild and have started surveying members about what they want in a labor contract, said Brandon McKinley, a Metro Caring employee who handles communication.
It was a rough few years in the pandemic as Metro Caring served a growing community, leaving workers burned out. The organization switched to a four-day workweek to help retain staff and help them de-stress. There are lots of great perks, McKinley said. Unionizing wasn’t about that.
“When I talk to my friends they’re like, ‘You have a four-day workweek. You have good benefits. What are you fighting for?’ And we’re like, we’re not really fighting, at least I don’t see it that way,” he said. “Unionizing just adds that extra layer of protection for folks to feel like they could participate a little more in discussions.”
➔ Mining company hopes to add 893 jobs in Grand Junction area. Knoxville, Tenn.-based Morgan Mining took the state up on its offer to expand its mining-labor and management firm and create a mining hub in Mesa County, state economic development officials announced Thursday.
The company already employs 196 of its 226-person workforce in Grand Junction. And it still has more work to do, including finding a location and buying used mining equipment. The mining hub would be a place for suppliers to consign inventory and equipment for faster delivery.
The state’s Economic Development Commission awarded Morgan Mining $10.9 million in future Job Growth Incentive Tax Credit incentives if the company meets a proposal to hire 893 workers over eight years. Expected jobs include engineers, electricians and finance roles with an average annual wage of $92,447.
➔ BLS resumes publication of Colorado job data after months-long suspension. The quarterly report of Colorado jobs and wages is returning after U.S. labor officials paused the data due to data-quality issues last fall. Known as the Quarterly Census of Employment and Wages, the data comes from employer surveys. But after the state upgraded its unemployment insurance system in October 2023, anomalies were noticed. One theory was that employer data wasn’t being counted properly.
The state labor department will know more when the next report comes out March 5, said Michelle Morelli, Colorado Labor Market Information director. Revised numbers show more employers are getting counted.
“(W)e expect to see some under-representation of jobs in Colorado’s recent QCEW files,” Morelli said in an email. “The Q3 2024 QCEW file that was published this week is showing that 90.1% of Colorado Employers are reporting, and the Q2 2024 file was also revised up from 80.4% to 85.9%.” >> Earlier story
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