INDIANAPOLIS – A Marion County judge ordered Friday that Indiana must continue the federal government's unemployment benefits, putting a temporary stop to Gov. Eric Holcomb's move to drop the state from the program.
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.
The lawsuit emphasizes that the Republican governor's actions to withdraw Indiana from the expanded unemployment benefits before the Sept. 6 expiration of those benefits will hurt thousands.
Indiana's decision to leave the federal program early violates state law, Hanley wrote in his court order, 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 decision requires the state to continue the extra $300 weekly payments to unemployed workers and remain in other programs that expanded unemployment benefits during the COVID-19 pandemic.
Holcomb announced last month 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.
The governor's office did not immediately comment on the court's ruling Friday.
The decision to withdraw the state from the federal programs came as many businesses blame the extra $300 weekly payment and the ease of obtaining unemployment benefits with making it more difficult to fill job openings. Republican legislative leaders additionally urged Holcomb to withdraw Indiana from those federal programs.
The $300 payments have more than doubled Indiana's average $280 weekly unemployment payment, which has a maximum of $390 a week, according to the state Department of Workforce Development. The changes could cut off or reduce unemployment benefits to more than 220,000 people in the state.
Holcomb said jobs are available around the state and pointed to Indiana's 3.9% unemployment rate for April, which was down from the pandemic peak of 16.9% a year earlier. Ending the benefits early will also help Indiana businesses find and hire qualified employees for thousands of open positions, he said.