Judge: Federal pandemic unemployment benefits must continue in Indiana

Judge John Hanley issued the order Friday

(File Photo)

A Marion County judge has temporarily halted Gov. Eric Holcomb’s order to stop providing federal pandemic unemployment benefits, meaning those benefits will continue to flow to out-of-work Hoosiers for the time being.  

Judge John Hanley issued the order Friday, less than two weeks after the faith group Concerned Clergy of Indianapolis and four individuals filed a lawsuit challenging Holcomb’s decision to end the benefits early. The judge's order lasts until the lawsuit, which also targets Indiana Department of Workforce Development Commissioner Frederick Payne, makes its way through the court system and reaches a final order.

Holcomb's office told IndyStar it would be working with the Indiana Attorney General's Office and the Department of Workforce Development to appeal the order. "The state of Indiana took the appropriate steps to terminate its participation in (the) federal pandemic unemployment program," a spokesperson for the governor said. 

The unemployment benefits were initiated as part of the CARES Act, a federal stimulus package created by Congress that was meant to give the American economy a financial lifeline as it weathered the COVID-19 pandemic. The benefits were authorized to continue until Sept. 9. 

In May, Holcomb announced that his government would stop distributing the benefits by June 19. Indiana joined about two dozen mostly Republican-led states that made similar announcements. 

In his order, Hanley said that decision placed Holcomb and Payne “in violation of their statutory duties.”  

"Plaintiffs state that the loss of benefits provided to them under the CARES Act will result in an inability to pay rent, utilities, necessary living expenses and medical care, face possible eviction and limit opportunities for necessary and affordable childcare,” Hanley wrote.

He added that Indiana is not being harmed by the pandemic insurance programs because the federal government is covering both the benefits themselves and state costs to administer the benefits.  

Such benefits have helped hundreds of thousands of Hoosiers survive the pandemic, but they became contentious once reopening businesses couldn't hire the workers they needed. Benefits boosted paychecks, most recently by $300 a week, and significantly expanded the pool of people eligible for unemployment support. 

Holcomb said the decision to stop providing federal benefits would help fill some 116,000 open jobs in Indiana in the coming months.  

Politicians and business owners have blamed federal unemployment benefits for those unfilled positions, but economists are skeptical that ending the federal unemployment program would drive workers back.  

They say people aren’t jumping back into the labor pool because of a lack of child care options, job changes, early retirement and a change in career priorities.  

"Our community is dealing with enough stress and trauma," said the Rev. David Greene, the president of the Concerned Clergy of Indianapolis. "And we're afraid this will add to the stress and trauma, especially among the African American community, where a greater number of people are unemployed."