Workers sue states that cut unemployment benefits amid pandemic – Forbes Advisor
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This summer, 26 states are cutting access to pandemic unemployment benefits that were extended by the American Rescue Plan Act (ARPA).
But some people can get their benefits back, even for a few weeks.
Several lawsuits claim that states have a duty to provide federal assistance to their residents. So far, lawsuits have been filed in Indiana, Maryland, Ohio, Oklahoma and Texas, and benefits have been temporarily restored in Indiana and Maryland.
Read more: Which States End Federal Unemployment Payments Early in the Event of a Pandemic?
It is not clear whether benefits will be fully restored in states facing challenges before nationwide payments expire in early September. But for now, there is hope for workers who feel the cut is coming too soon.
The fight to keep $ 300 a week hinges on state labor laws
Under the CARES Act, states could choose to participate in additional unemployment benefits offered by the federal government (initially $ 600 per week, then $ 300 per week in addition to the state benefits to which you are entitled). Last spring, each state agreed to administer the additional benefits.
But once ARPA went into effect, about half of the governors, mostly Republicans, decided to abandon the deal, which is allowed with 30 days’ notice to the US Department of Labor. They cited the rapid rebound in employment in their states, as well as a labor shortage that has hampered companies’ ability to generate income during the recovery, as a motive to end the benefits sooner.
The early termination of federal benefits means that some workers, including many self-employed, will lose their unemployment benefits altogether, having already exhausted their state eligibility.
But state lawsuits, filed by or on behalf of workers, rely on state laws rather than federal laws. Many states have provisions in their unemployment laws that state that a state must protect the welfare of its unemployed, says Jenna Gerry, a lawyer with the National Employment Law Project (NELP), a non-profit organization. for workers’ rights.
“Many of these laws also state that the state agency that manages unemployment insurance must cooperate fully with the Ministry of Labor to implement unemployment insurance,” she said. In Indiana, the language is even more explicit, saying the state has a duty to maximize any federal benefits its residents may receive, she explains.
Judges in Indiana and Maryland have ordered that benefits continue while lawsuits there go through the legal system. The governors of the two states appealed against the orders; Maryland Governor Larry Hogan’s appeal was dismissed.
But claims for continued benefits do not guarantee that claimants will receive their benefits on time, if at all.
In Indiana, the instruction to continue payments came after federal benefits had already ceased. Restarting benefits for claimants who have already had their benefits stopped can be complicated; it takes longer to reinstate benefits than to continue processing a benefit that has not yet expired. The state expects federal benefits, which ceased on June 19, to restart on Friday, July 16.
The delays could put additional pressure on the unemployed who are still looking for work this summer. “Their benefits may be delayed, but their credit card bills [and] their rent is often not delayed in the same way, ”says Gerry.
Read more: Biden extends eviction ban deadline as billions of rent relief stuck in limbo
More state lawsuits may surface in the coming weeks
Although there are only a few weeks until federal benefits expire on Labor Day weekend, Gerry predicts that lawsuits like these will arise in other states as state unemployment laws tend to have similar language.
Even after benefits expire, lawsuits could continue in an attempt to obtain back pay for lost weeks.
Meghan Wright, of New Orleans, Louisiana, is monitoring a Facebook group to compare her own benefit experience to other unemployed people. Filing a complaint against the state has been discussed, she said.
Wright, a bar manager before the pandemic, learned in May 2020 from a colleague that the temporary closure of her bar was in fact permanent.
She received unemployment benefits from Louisiana and the additional $ 600 from the federal government. Wright has spent much of the pandemic caring for his grandmother, who lives just beyond the Mississippi state border. She said the state of Louisiana still owed her “a few thousand dollars” after a month-long period in which her benefits were cut due to an identity verification problem.
Read more: Why is it so difficult to get your unemployment benefits in the event of a pandemic?
The hotel industry in New Orleans did not largely reopen until May 2021. From now on, federal benefits will end at the end of July, despite an unemployment rate in May of more than 7%. The early shutdown was part of an agreement the governor made with the state legislature to increase the maximum unemployment benefit by $ 28 per week from January 2022.
In a normal year, with sweltering heat and likely hurricanes, “everything dies” in July and August, Wright says. “Some places close because it’s so dead it’s not worth opening.” She said hospitality workers like her typically save money for the rest of the year because they know they will be losing shifts at some point in late summer.
Finding out that she would lose her benefits two months earlier “blew me away a bit,” says Wright. The average weekly unemployment benefit in Louisiana, without federal supplements, is $ 192.
Wright has interviewed for waiter jobs, but says the minimum wage tip in restaurants will make it difficult to predict his earnings. She has been considering leaving the industry she has worked in since she was a teenager, but has not had the chance to get interviews for the remote customer service jobs she applied for. She remembers a job she applied to online that said there were 4,000 applicants.
If she can’t make ends meet by serving five days a week, she’ll think about picking up a grocery delivery guy during the day.
Hiring in the leisure and hospitality industry has led the recovery in the past five months, creating more jobs than any other industry, according to the White House. But the global economy still has nearly 7 million fewer jobs than before the pandemic. The uncertainty for hospitality workers goes even further when you examine the impact on black and brown workers, much of whom work in the leisure and hospitality fields.
In states that have cut benefits, Gerry says the unemployment rate for black workers tends to be double the state’s overall unemployment rate.
“We know that black workers and other workers of color face longer spells of unemployment and have higher unemployment rates in general,” Gerry said. “So when you take those benefits away, it has a disproportionate effect on the long-term unemployed. “
President Joe Biden has pledged to create jobs through his infrastructure plan focused on renewable energy and climate resilience. But although a bipartisan group of lawmakers came to a verbal agreement, no bills were presented to Congress.
And federal action is unlikely to be taken to further extend unemployment benefits from Covid-19, especially as half of the states have declared it unnecessary by opting out early. At a press conference in June, Biden said it “makes sense” that due to the continued improvement in the economy, unemployment assistance expires in September.