Legal aid group files lawsuit to keep enhanced jobless benefits flowing

Editor’s note: This story has been updated with comments from Gov. Eric Holcomb’s office. 

Calling on Gov. Eric Holcomb to “follow the law,” Indiana Legal Services has filed a lawsuit asserting the decision to end the extended unemployment benefits violates a state statute that requires the state to procure all available federal unemployment compensation for Hoosiers.

The complaint, filed Monday in Marion Superior Court, is seeking an injunction to prevent the state from cutting off the additional money being provided to households that lost their jobs because of the COVID-19 pandemic. Pointing to Indiana Code § 22-4-37-1, the lawsuit argues that when Indiana decided to stop administering these federal benefits, it violated the “clear mandates” of the state’s unemployment statute to secure “all rights and benefits available for unemployed individuals.”

“These benefits have provided life-sustaining and crucial assistance to many Hoosiers during the pandemic,” Jon Laramore, executive director of ILS, said in a press release. “The Legislature passed a law creating a right to these benefits and we’re asking Gov. Holcomb to follow the law.”

Indiana Legal Services has enlisted Macey Swanson Hicks & Sauer LLP in Indianapolis as co-counsel. The lawsuit, T.L., et al. v. Eric Holcomb, et al., 49D11-2106-PL-020140, was filed on behalf of the Concerned Clergy of Indianapolis, an organization focused on the welfare of the African American community in the Circle City, as well as several individuals from around the state who are struggling to reenter the workforce.

Also on Monday, the plaintiffs filed a motion and memorandum in support of a preliminary injunction to prevent the state from opting out of the extra benefits while the litigation is pending.

In response to the lawsuit, the governor’s office stated, “The Department of Workforce Development worked with the U.S. Department of Labor to properly complete all required steps to end its participation in federally funded pandemic unemployment insurance programs this month. DWD has timely notified impacted claimants about the state’s withdrawal from the federal programs and continues to connect impacted Hoosiers with the resources they need to gain skills and be matched with employment.”

As part of the Coronavirus Aid, Relief, and Economic Security Act passed by Congress in March 2020, workers who had lost their jobs because of the economic shutdown received extra funds in their unemployment checks. The American Rescue Act of 2021 continued those additional jobless benefits through Sept. 6.

However, Gov. Eric Holcomb announced in May that Indiana would be ending its participation in all federally-funded pandemic unemployment insurance programs on June 19.

“There are help wanted sings posted all over Indiana, and while our economy took a hit last year, it is roaring like an Indy 500 race car engine now,” Holcomb said in explaining his decision to opt out of the federal money. “I am hearing from multiple sector employers that they want and need to hire more Hoosiers to grow. We have a myriad of work options in every region of our state with many more coming online every week.”

The governor said leaders in the recreational vehicle industry, concentrated in Elkhart, claimed they “could hire thousands of people today,” and in recent weeks companies like Amazon, Apple, Toyota, and Milwaukee Tool have announced “thousands of new career opportunities for Hoosiers.”

ILS disputed that Indiana residents no longer need the extra unemployment assistance. The agency noted counties like Marion, Howard and Lake are experiencing higher-than-average jobless rates.

Also, ILS highlighted a report by The Century Foundation, which found that ending the benefits would impact more than 286,000 Hoosiers and result in the state losing $1.5 billion that would have been spent locally on living expenses like rent, utilities, groceries and transportation.

“Our clients face obstacles, such as disproportionate unemployment rates, unequal job opportunities, and some are also impacted by the (Centers for Disease Control and Prevention) eviction moratorium ending on June 30,” Jennifer Terry, ILS staff attorney and co-counsel, said in a press release. “Taking away federally-funded benefits that Indiana officials have the infrastructure to provide through September will hurt our clients and the communities they live in.”

Indiana is among 25 states that have announced plans to end the enhanced federal unemployment benefits early, according to Ballotpedia. Among Indiana’s neighbors, only Ohio has decided to stop the flow of extra assistance while Kentucky, Illinois and Michigan are allowing the additional benefits to continue.