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A New Lawsuit Aims To Stop Indiana From Pulling Unemployment Benefits Early

A customer walks behind a sign at a Nordstrom in Coral Gables, Fla., store seeking employees in May.
A customer walks behind a sign at a Nordstrom in Coral Gables, Fla., store seeking employees in May.

Updated June 16, 2021 at 2:08 PM ET

Two organizations filed a lawsuit against Indiana Gov. Eric Holcomb in an attempt to block the state's push to end pandemic unemployment benefits on June 19. This lawsuit may be the first of its kind that aims to stop states from ending these benefits earlier than Congress mandated.

Indiana Legal Services, an organization providing free legal assistance, and the Concerned Clergy of Indianapolis filed the lawsuit on behalf of five unnamed plaintiffs who are set to lose their jobless benefits. The complaint was filed Monday in Marion County Superior Court.

The unemployment insurance program "has served as a vital lifeline for thousands of Hoosiers," the complaint, reviewed by NPR, says. "By prematurely deciding t0 stop administering these federal benefits, Indiana has violated the clear mandates 0f Indiana's unemployment statute—to secure all rights and benefits available for unemployed individuals."

Indiana is one of 25 Republican-led states that decided to end jobless aid in an effort to get people to return to work. Indiana and seven other states are set to end expanded unemployment benefits as soon as this weekend. This is despite Congress's authorization for extra payments until early September.

Those benefits include the extra $300 a week in federal aid and the special pandemic program for gig workers that allows them to receive jobless benefits. Ordinarily, independent contractors wouldn't be eligible.

Plaintiffs, as well as many other Indiana residents, rely entirely on the unemployment benefits to pay for food and rent and to care for their families, the complaint alleges.

Attorneys in this case are requesting the judge approve a preliminary injunction that would allow people to receive their benefits while the case continues.

Holcomb says it's time to get back to work

Holcomb says that people no longer need unemployment benefits as the state has a plethora of jobs open, as member station WBOI in northeastern Indiana reports.

"Eliminating these pandemic programs will not be a silver bullet for employers to find employees, but we currently have about 116,000 available jobs in the state that need filled now," the governor said in a statement.

According to the governor's office, Indiana's unemployment rate has recovered to 3.9% after climbing to 17% at the height of the pandemic.

The lawsuit challenges Holcomb's assertion.

Each of the five plaintiffs say they are unable to return to work due to lingering injuries or disability, health conditions that put them at risk for COVID-19 exposure, dependent children at home and no childcare available, or no positions that are available in their career field.

Workers of color feel the loss of unemployment the most

The National Employment Law Project says ending these jobless benefits early threatens the livelihoods of workers of color the most.

Millions of Americans still heavily rely on jobless aid as the country slowly reopens from pandemic-induced lockdowns, according to the organization.

As of May 22, more than 15.3 million people still needed some form of unemployment benefit—nearly twice the number who received payments when the aid programs began in late March 2020, NELP said.

According to its analysis, over 46% of unemployment insurance recipients in the states ending the programs early are people of color.

"The brunt of the impact will be felt by Black, Latinx, Indigenous, and other people of color," NELP says.

Copyright 2021 NPR. To see more, visit https://www.npr.org.