More workers sue states canceling unemployment benefits — some are successful

·3 min read

Workers in Indiana, Maryland, Ohio, and Texas have sued their states for canceling pandemic-era unemployment benefits early. So far, two have been successful in reinstating benefits — at least for now.

A lawsuit in Ohio is the latest in the growing movement against some of the 26 states that opted out of the federal unemployment programs earlier than the federal expiration on September 6.

“Along with jeopardizing the personal and financial well-being of Ohioans who are struggling to recover from the pandemic, DeWine and Damschroder’s callous and politically-motivated decision to terminate the federal benefits represents a willful and blatant violation of Ohio law,” Brian Flick of DannLaw, one of the attorneys filing the lawsuit, said in a statement on Tuesday.

Last month, Marion Superior Court Judge John Hanley temporarily reinstated the federal unemployment benefits programs in Indiana — the first state where workers filed a suit — until a final ruling is made in the case.

"Indiana’s statutory language is very similar to Ohio’s," Marc Dann of DannLaw said. "We believe we are right on the law an absolutely right as it relates to public policy that protects the interests of the people of the state of Ohio."

Similarly, unemployment programs in Maryland were extended after a state judge issued a temporary restraining order and the governor's appeal against a class-action lawsuit filed by the Unemployed Workers Union was denied.

"Though the Governor and executive branch indisputably have discretion to make public policy judgments in many areas, our state UI statute sets limits on that discretion when it comes to maximizing the receipt of federal UI funds – particularly during a pandemic where the General Assembly recently directed the Department of Labor to find ways to expand access to benefits," The Public Justice Center attorney Sally Dworak-Fisher said in a statement on June 30.

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

A woman leaves the DC Department of Employment Services, which handles unemployment claims for DC residents, in Washington, DC, July 16, 2020. - Americans worry as unemployment benefits are due to end soon. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)
A woman leaves the DC Department of Employment Services, which handles unemployment claims for DC residents, in Washington, DC, July 16, 2020. (Photo by SAUL LOEB/AFP via Getty Images)

'Made financial decisions based on a promised aid'

Twenty-five states have eliminated certain expanded unemployment programs and Arizona plans to terminate the programs on Saturday.

More than 4 million workers are affected by the benefits cuts in those states, 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.

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The 26 states are all cutting off the extra $300 in weekly benefits, while 22 of them are also canceling 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," Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, previously told Yahoo Money. "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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