More jobless workers sue their states for ending unemployment benefits early

Workers in Indiana, Texas, and Maryland have filed lawsuits against their respective states for canceling pandemic-era unemployment benefits early, a growing movement that one expert said could be successful in some states.

Indiana was the first state where workers filed a lawsuit. On Friday, Marion Superior Court Judge John Hanley temporarily reinstated the federal unemployment benefits programs until a final ruling is made in the case.

"The decision by Judge Hanley was a breakthrough, as many states have similar state law provisions that could be brought up in court," Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. "I expect more judges to be sympathetic to the facts in the cases."

In Maryland, the Unemployed Workers Union on Thursday filed a class-action lawsuit against Gov. Larry Hogan's order to end the federal programs on July 3.


"Our petition is that this order is illegal and a threat to the public welfare," Alec Summerfield, an attorney representing the six jobless workers suing, said at a press conference on Thursday. "People are depending on these $300 even if it's just for three months to carry them through to find a job and put food on the table."

In Texas, a lawsuit was organized by two Facebook jobless workers groups with over 30,000 members. The temporary restraining order against Texas Gov. Greg Abbott filed by attorney David Sibley in Travis County District Court was denied on Friday, but the two groups intend to seek an injunction, according to reports.

Nearly 1 million Texas workers saw their benefits significantly reduced or cut down to zero after the state canceled the federal programs on Saturday. The state itself is losing $6.5 billion in benefits.

AUSTIN, TX - JUNE 08: Texas Governor Greg Abbott attends a press conference where he signed Senate Bills 2 and 3 at the Capitol on June 8, 2021 in Austin, Texas. Governor Abbott signed the bills into law to reform the Electric Reliability Council of Texas and weatherize and improve the reliability of the state's power grid. The bill signing comes months after a disastrous February winter storm that caused widespread power outages and left dozens of Texans dead. (Photo by Montinique Monroe/Getty Images)
Texas Governor Greg Abbott attends a press conference where he signed Senate Bills 2 and 3 at the Capitol on June 8, 2021 in Austin, Texas. (Photo by Montinique Monroe/Getty Images) (Montinique Monroe via Getty Images)

Indiana, Texas, and Maryland are among the 26 states that eliminated or plan to eliminate certain expanded unemployment programs this month and early next month.

More than 4 million workers will see their benefits slashed by at least $1,200 a month, losing a total of $22.5 billion in potential benefits, according to estimates by the Century Foundation. Nearly 3 in 5 workers affected by the early expiration will be left with no benefits at all. The federal expiration is September 6.

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The cut-off in benefits in those three states includes the extra $300 in weekly benefits, the Pandemic Unemployment Assistance (PUA) program for workers who don’t normally qualify for unemployment, and the Pandemic Emergency Unemployment Compensation (PEUC) program that provides extra weeks of benefits.

"Unemployed individuals made financial decisions based on a promised aid, and have been deeply harmed by the decision to cancel them," Stettner said. "As the saying goes 'there ought to be a law against that.' And maybe the law is already against that."

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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

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