Security Clearance Holders: What You Can (and Cannot) Do After a Federal Layoff

Federal layoffs create unique challenges for employees with security clearances. Certain jobs or freelance work can jeopardize clearance status. This guide explains safe employment paths, income options, and reporting obligations.

Why Clearance Holders Have Special Rules

  • Clearance is tied to financial, legal, and foreign influence risks

  • Certain employment types require disclosure to maintain eligibility

Approved Employment Options

Federal contracting: Safe if duties align with clearance level

Private sector with U.S. companies: Safe if no foreign conflicts

Consulting/Advisory work: Must report conflicts, document clients

Part-time W-2 jobs: Usually safe; report if security review is required

Income Sources That Are Risky

  • Undisclosed freelance clients

  • Foreign payments

  • Cash-heavy or anonymous work

  • Conflicts of interest with prior federal duties

Self-Employment Guidelines

  • Report your business or clients to security office

  • Keep records of work performed

  • Avoid classified or controlled info breaches

UCFE & Other Benefits

  • Unemployment can be claimed without affecting clearance

  • Report income accurately to avoid overpayment

Clearance-Safe Job Search Plan

  1. Identify clearance-compliant industries

  2. Review company clearance requirements

  3. Track applications and employment start dates

  4. Notify security office when required

Mistakes That Can Trigger Reinvestigation

  • Failure to report income or clients

  • High-risk financial activity

  • Ethics violations

References