Appeals court: Indiana must resume unemployment benefits

The Indiana Court of Appeals ruled Monday that the state must temporarily continue payment of federal unemployment benefits, affirming an earlier court order that Indiana must restart the extra $300 weekly payments to unemployed workers.

The appellate court denied a request from the state government to issue a stay on a Marion County judge’s order that Indiana must resume participation in the federal government’s programs that enhanced unemployment benefits during the COVID-19 pandemic.

The state government could next call on the Indiana Supreme Court to consider the preliminary injunction.

Republican Gov. Eric Holcomb, who has pushed to drop the state from the federal programs before they’re scheduled to end on Sept. 6, did not immediately comment Monday on the ruling.

Holcomb announced in May that Indiana would reinstate a requirement that those receiving unemployment benefits will again have to show they are actively searching for work as of June 1 and that the state would leave the federal programs effective June 19.

Indiana also ended its participation in a federal program that made gig workers and the self-employed eligible for assistance for the first time and another that provides extra weeks of aid.

Marion Superior Court Judge John Hanley granted the preliminary injunction in a lawsuit filed June 14 by two legal organizations, which argues that Indiana law requires the state to procure federal insurance benefits to residents.

Hanley wrote in his court order that Indiana’s decision to leave the federal program early violates state law, adding that the unemployment benefits are “instrumental in allowing Hoosiers to regain financial stability at an individual level while the state continues to face challenges presented by the COVID-19 pandemic during its return to normalcy.”

The Indiana Attorney General’s Office asked the Indiana Court of Appeals to quickly stay the Marion County judge’s order.

Attorneys for the state maintain Indiana can’t continue paying out the benefits because the state has already ended its agreement with the federal government to administer the federal programs.

Entering into a new agreement would require the workforce development office to expend extra time and resources to “rework its information technology system,” according to court documents. The state also argued that Indiana would not have time to withdraw from the federal programs again should the appeals court rule in the state’s favor.

During the legal battle, Indiana’s Department of Workforce Development has not continued payment of federal unemployment benefits. A spokesperson for the state agency said Monday that benefits are estimated to restart by Friday.

A spokesperson for the Department of Labor told The Associated Press that the federal government will accept states back into the programs after they’ve terminated the benefits, adding that benefits should be available to claimants for any weeks covered by the court orders.