Indiana is getting sued over ending federal unemployment benefits early - and it could mean benefits won't expire next week

·3 min read
unemployment insurance weekly benefits stimulus checks recession job losses coronavirus pandemic
Carlos Ponce joins a protest in in Miami Springs, Florida, asking senators to continue unemployment benefits past July 31, 2020. Joe Raedle/Getty Images
  • Two law firms in Indiana have filed a lawsuit challenging the premature end of federal unemployment.

  • They've asked for a preliminary injunction, so recipients would receive benefits as the case proceeds.

  • Currently, Indiana is set to end its participation in federal unemployment benefits on June 19.

  • See more stories on Insider's business page.

Indiana is one of at least 25 states cutting off federal unemployment benefits ahead of their expiration in September, with the additional $300 in weekly benefits and federal relief programs set to wind down on June 19.

"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," Gov. Eric Holcomb said in a May news release announcing the premature end to benefits. "I am hearing from multiple sector employers that they want and need to hire more Hoosiers to grow."

Now, two groups are challenging that decision. Indiana Legal Services (ILS), a nonprofit law firm that provides free legal assistance to low-income Indiana residents, has teamed up with firm Macey Swanson Hicks & Sauer to file a lawsuit against the state. Local outlet CBS4 was the first to report on the lawsuit.

In a release, the firms said that their challenge is based on an Indiana law - law 22-4-37-1 - which says that the state should procure all unemployment "rights and benefits which are conferred" under various provisions, including amendments.

About 4 million workers around the country stand to be impacted by their states cutting unemployment benefits, according to an estimate by Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation. According to Stettner, around 230,000 Hoosiers received benefits last week.

"The legislature passed a law creating a right to these benefits, and we're asking Governor Holcomb to follow the law," Jon Laramore, the executive director of ILS, said in a release.

In Indiana, the end of federal unemployment benefits will also bring about the end of all benefits for some. Two pandemic-era programs expanded who's eligible for unemployment - notably bringing gig workers into the fold - and extended how many weeks recipients could collect benefits for. Those programs, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC), respectively, will both come to an end on June 19, leaving recipients wholly benefit-less. According to Stettner, 66,000 Indiana residents are on PEUC, and 111,000 are on PUA.

Everyone else will see their weekly benefits plummet by $300. The maximum weekly benefit under Indiana law is $390, meaning that those receiving the maximum benefit along with the additional $300 could see their benefits nearly halved.

Previously, other advocates and politicians had argued that the Department of Labor was obligated to continue paying out PUA. But the Department of Labor concluded that it probably can't do much, and the White House has said that states have "every right" to cut off aid.

But in Indiana, the firms are asking that the judge accepts a preliminary injunction. That would pause the expiration of benefits as the case progresses - and delay the fiscal cliff just a little bit longer for the over 200,000 Indiana residents impacted.

Are you unemployed and have a story to share? You can contact this reporter at jkaplan@insider.com.

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