Indiana Sued For Cutting Off Federal Unemployment Benefits

Unemployed workers are suing the state of Indiana for cutting off federal unemployment benefits before they expire in September. 

In a lawsuit filed in state court, workers say they’ll suffer without the federal benefits because they can’t return to their jobs due to lack of child care or because their employers haven’t reopened. 

Republican governors in 25 states canceled the benefits before they expire, claiming people won’t take jobs because the federal government is giving them an extra $300 per week. Most of the states dropping the extra $300 also are ending separate benefit programs for gig workers and the long-term jobless. 

The lead plaintiff is a Goshen, Indiana, resident identified in the lawsuit by the initials T.L., who works as a certified nursing assistant but can’t go back to work because she has a baby and local day cares are full. She’s receiving $449 per week in federal benefits, which will stop on June 19 unless the court issues an injunction.

Without the federal aid, “her family will struggle to pay for food and other living expenses,” the suit says.

Another plaintiff, J.C. of Bloomingdale, just signed a six-month lease, and wouldn’t have done so if he’d known Indiana Gov. Eric Holcomb (R) would soon terminate the benefits. The suit says he’ll likely face eviction. 

The lawsuit, filed by Indiana Legal Services and the Macey Swanson Hicks & Sauer law firm, alleges Holcomb violated a state law requiring the governor to secure all available federal benefits for the state. 

“The legislature passed a law creating a right to these benefits, and we’re asking Governor Holcomb to follow the law,” Indiana Legal Services Director Jon Laramore said in a statement.

Separately, the National Employment Law Project and Sen. Bernie Sanders (I-Vt.) have said federal law requires the U.S. government to make sure workers continue to receive gig-worker benefits created by the Coronavirus Aid, Relief and Economic Security Act, but President Joe Biden has given his blessing to the red state cutoffs.

Last week, White House press secretary Jen Psaki told reporters Republican governors had every right to terminate the benefits early.

Andrew Stettner, an unemployment expert with progressive think tank the Century Foundation, commended the Indiana Legal Service for taking legal action against the benefit cuts.

“There are more than 200,000 Hoosiers like ILS plaintiff LC, who was counting on benefits to hold her over until she can return to work as a school bus driver this fall and now have been put in harm’s way by Governor Holcomb’s unprecedented decision to cancel the program,” Stettner said over email. “ILS makes a compelling argument that the Governor’s actions violate the directive of Indiana state law to protect the unemployed.”

Republicans have decried the additional federal unemployment benefits, which Democrats extended through September, for creating what they say is a labor shortage. They claim the aid is crushing economic recovery by encouraging people not to go back to work, even as businesses reopen.

Recent Department of Labor jobs numbers showed the benefits’ negative impact on economic growth was marginal. Last month, the economy added more than a half million jobs.

Still, in May there were roughly 7.9 million fewer jobs than before the pandemic.