The U.S. Department of Labor (DOL) has formally warned all U.S. governors that allowing illegal immigrants to receive unemployment benefits could result in the loss of key federal funding.

In an April 24 letter, Labor Secretary Lori Chavez-DeRemer emphasized that taxpayer dollars must not be used to “encourage or reward illegal immigration.” The letter reminds states that unemployment insurance is only available to those legally authorized to work in the U.S., and urges the use of the Department of Homeland Security’s immigration database to verify eligibility. States failing to meet legal requirements may lose Title III UI administrative grants, which fund the management of unemployment programs. The directive supports Trump-era efforts to restrict federal benefits to legal residents only. The warning comes as some states, including California and Washington, have considered or introduced legislation offering financial assistance or benefits to undocumented immigrants. While some proposals were vetoed, others remain under review. The DOL’s letter reinforces a clear federal stance: unemployment benefits are reserved for lawful workers, and states must enforce those standards or risk losing federal support.