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Some states resume paying out federal benefits after citizens sue
By Ramon Tomey // Jul 30, 2021

Jobless Americans sued their respective states after the latter ended their participation in the federal government's unemployment benefits program. Judges in Maryland and Indiana sided with the plaintiffs who were affected by the premature end of the extra aid. The judges ruled that payouts for the $300 weekly benefit must resume until the suits are resolved.


Maryland and Indiana were part of a group of 26 states that prematurely ended federal unemployment programs that saw unemployed people get an extra $300 weekly on top of regular state benefits. Based on an estimate from the National Employment Law Project, the rulings by the Maryland and Indiana judges meant that roughly 500,000 unemployed workers should expect continued receipt of benefits.

According to a WBBM report, Indiana Gov. Eric Holcomb announced in May 2021 that the state will end federal unemployment benefits the next month instead of waiting for it to expire in September. The Republican governor sided with businesses in Indiana that claimed the extra benefits were to blame for unfilled jobs. He cited the many "help wanted" signs posted all over the state for ending the federal aid.

However, two nonprofit groups sued Holcomb in June 2021. The plaintiffs alleged that he had "violated the clear mandates of Indiana's unemployment statute: To secure all rights and benefits available for unemployed individuals." A month later, Marion Superior Court Judge John Hanley sided with the plaintiffs and ordered that the state resume paying out federal benefits.

Hanley argued in his decision that a "preponderance of evidence" suggested that the early termination of federal unemployment benefits violates state law. "A loss of housing or medical care and the inability to provide food, shelter and adequate childcare for a family constitute irreparable harm pending resolution of this cause of action, and are not adequately compensable by an award of damage," he wrote.

Indiana's subsequent attempts to keep the benefits paused ended in vain, and it resumed the payout of federal unemployment benefits. Indiana Department of Workforce Development Chief Unemployment Insurance and Workforce Solutions Officer Regina Ashley said: "There will be no gap in payments for eligible claimants." (Related: Naked tyranny: Indiana judge rules that the state is not allowed to halt federal benefits of $300/week, regardless of the worker shortage.)

Maryland also resumed federal unemployment benefits

The state of Maryland was also forced to resume payout of federal benefits following a court order, the Baltimore Sun reported. Unemployed residents filed a lawsuit challenging Gov. Larry Hogan's decision to prematurely end federal benefits. Baltimore City Circuit Judge Lawrence Fletcher-Hill issued an injunction on July 13 ordering the state to continue paying federal unemployment benefits, at least until the lawsuit was resolved.

Fletcher-Hill wrote in his July 13 decision that cutting off benefits early would inflict "significant personal hardship" on those affected by job layoffs in the state. He noted that the plaintiffs "have been strained economically and emotionally by the pandemic."

Furthermore, Fletcher-Hill noted that the plight of "those who have had to struggle with irregular or no employment" struck him the most "as someone who has enjoyed the privilege of continuous, secure employment." The judge ultimately said: "The impact of the pandemic has been cruelly uneven."

Hogan's spokesman Michael Ricci said the GOP governor will not challenge Fletcher-Hill's decision. "While we firmly believe the law is on our side, actual adjudication of the case would extend beyond the end of the federal programs, foregoing the possibility of pursuing the matter further," he said.

In spite of the governor's compliance with the court order, Ricci said that officials in Hogan's administration "fundamentally disagree with [the] decision." According to Ricci, the officials argue that keeping unemployment benefits in place hurts small businesses, jeopardizes economic recovery and causes significant job loss. (Related: States ending pandemic unemployment benefits see increase in jobs as more people decide to work.)

Congress created the federal unemployment benefits in March 2020, and extended them twice – with the latest extension set to expire in September 2021. The extra $300 per week in benefits came on top of state benefits amounting to about $330 per week. All in all, unemployed Americans received a total of about $630 every week – amounting to about $32,000 annually.

GOP lawmakers blamed the extra unemployment aid from the federal government for the lack of job growth. The U.S. Chambers of Commerce shared the lawmakers' sentiments through a June 8 statement that called for the end of the $300 unemployment benefit. It also called on state governors to use COVID-19 relief funds for rapid job training programs.

Pandemic.news has more stories about unemployment benefits for those affected by the COVID-19 pandemic.

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