New Legislation Preserves Pandemic Unemployment Benefits in Wake of Lawsuits

As unemployment benefits designed specifically for the COVID pandemic began drawing to a close, workers who had yet to receive benefits due to a backlog in the system as well as those who remain unemployed quickly filed suit in multiple states including Ohio, Oklahoma, Indiana, Maryland, and Texas. The Biden administration responded by extending the deadline for pandemic unemployment benefits in some places to September 6th, 2021, although some states may terminate the program early as approximately 26 other states have done in the face of workforce shortages. However, states that want to terminate these extra benefits prior to the expiration may face some pushback, as has already been seen across the country.

Some workers remain unemployed while others are still awaiting delayed benefits.

The motivation for this extension is twofold; workers who remain unemployed fear being unable to pay for their living expenses, while others including some who have returned to the workforce are behind on payments due to benefit delays. In some places, laid off workers filing for unemployment benefits had to call the unemployment office close to 50 times only to discover that their paperwork had gone missing, resulting in further delays which left them unable to pay rent, car payments, and other expenses. This phenomenon was particularly noticeable in Maryland, which experienced severe delays in unemployment benefits leading to some of the first civil actions taken against the state government to halt the ending of pandemic benefits.

Some states may choose to terminate the program early, but are required by federal law to provide 30 days’ notice.

While states can still attempt to terminate pandemic unemployment benefits before the September expiration date, at the very least the federal government is requiring states to provide at least 30 days of notice to residents. However, seeing as state and federal litigation over the issue is ongoing, it’s unlikely to wrap up prior to September, meaning that some states may very well receive the full extent of the benefits until their set end date. Some states chose to terminate only the $300 per week supplementary benefit but met resistance to this as well; residents argued that the state government had a duty to deliver all federal unemployment compensation possible.

As payments resume in some states that had previously attempted to terminate the benefits, such as Indiana, some delays are expected to continue, especially considering the abrupt halting and re-starting of the program. As litigation against individual state governments proceeds, it remains to be seen what kind of short and/or long-term changes might arise regarding both standard and pandemic-era unemployment benefits.