Jobless Indiana residents sue governor for ending pandemic unemployment benefits early

By Tami Luhby, CNN

In what may be the first lawsuit aimed at stopping GOP-led states from terminating pandemic unemployment benefits early, jobless workers in Indiana are challenging Republican Gov. Eric Holcomb’s decision to cease the payments — including the $300 weekly federal boost — at the end of this week.

In the lawsuit, filed Monday in state court, Indiana Legal Services and a private employment law firm argue that the move violates a state law that requires Indiana to “procure all available federal insurance benefits to citizens,” according to the firms. The plaintiffs are requesting a preliminary injunction so benefits will continue to be paid during the court proceedings.

Indiana is among the 25 GOP-led states that are dropping at least one of the three pandemic unemployment insurance programs that Congress enacted in March 2020 and extended twice to support people during the virus-fueled economic downturn. The programs are scheduled to expire in early September in the states that are continuing them, under a provision contained in the Democrats’ $1.9 trillion relief package that President Joe Biden signed into law in March.

Citing workforce shortages, the Republican governors say the expanded benefits are keeping the unemployed from accepting job offers.

Are you at risk of losing your benefits early? Tell us about it here.

“There are help wanted signs posted all over Indiana, and while our economy took a hit last year, it is roaring like an Indy 500 race car engine now,” Holcomb said last month when he announced the benefits’ termination, noting there were 116,000 positions available. “I am hearing from multiple sector employers that they want and need to hire more Hoosiers to grow.”

Asked for comment about the lawsuit, Holcomb’s office said the state Department of Workforce Development worked with the US Department of Labor to complete all required steps to end its participation in the pandemic unemployment programs.

The state agency has provided timely notification to impacted claimants about Indiana’s withdrawal and continues to connect impacted Hoosiers with the resources to gain skills and be matched with employment, the governor’s office said.

Benefits end this week

Jobless Hoosiers will no longer receive the $300 weekly supplement after this week. Plus, residents in two other federal programs — which provide benefits to freelancers, the self-employed, independent contractors and certain people affected by the coronavirus and to those who have exhausted their regular state benefits — will stop getting any unemployment compensation.

About 230,000 Indiana residents are receiving unemployment benefits, according to The Century Foundation. Some 177,000 will be left without any jobless payments, and the rest will lose the $300 boost.

“The whole purpose of the unemployment system is to provide people with insurance funds to bridge the gap until they find new employment,” said Jennifer Terry, a staff attorney with Indiana Legal Services. “Unfortunately, there are just a lot of industries and pockets of our country that have not fully rebounded from the pandemic.”

The lawsuit was filed on behalf of five residents who can’t return to work for varying reasons and a clergy group. For instance, one is a certified nursing assistant who cannot find affordable child care. Another, who would face eviction next month without the payments, had a job offer to work in a restaurant, but it never opened because of the pandemic. A third was a school bus driver who wasn’t needed because of remote classes.

Nothing Biden administration can do

Democratic lawmakers and consumer advocates have appealed to the US Department of Labor to prevent the GOP states from pulling out of the federal unemployment programs, arguing that many Americans are still having trouble finding suitable jobs or can’t work because of child care or health-related issues due to the pandemic.

But an administration official told CNN last month that there is nothing the agency can do.