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Lawsuit attempts to stop Gov. Hogan from cutting federal unemployment benefits

Unemployment
Posted at 9:29 AM, Jun 24, 2021
and last updated 2021-06-27 19:54:09-04

BALTIMORE — The Unemployed Workers Union on Thursday filed a class-action lawsuit against Governor Larry Hogan and the Maryland Department of Labor in an attempt to stop them from cutting federal unemployment benefits.

Earlier this month, Hogan announced residents would no longer be able to apply for $300 in weekly federal enhanced unemployment programs come July 3.

The Governor's decision was met with fierce criticism from elected state and local Democratic leaders and unions, who argue that the federal government authorized the benefits through September 6.

RELATED: Unions, politicians rally for unemployment benefits to stay while many employers look for workers

Hogan defended his stance, citing at least 24 other states who have imposed similar deadlines.

He also said there are several businesses across the state who are hiring, but are facing severe worker shortages.

"Go anywhere in the state right now, and employers will tell you their top challenge is finding enough workers. In fact, there are more jobs available now than ever before. Even the White House has distanced itself from bonus benefits, saying that states have every right to opt out," said Michael Ricci, Hogan's Director of Communications.

On Wednesday, the U.S. Department of Labor's Bureau of Statistics said Maryland gained 11,500 jobs alone in May, dropping the state's unemployment rate to 6.1 percent.

The report marked Maryland's 13th consecutive month of job growth.

But Ricci says that same report also shows a labor shortage in the accommodations and food services industry.

"The Accommodations and Food Services industry added 2,200 jobs in May--less than in February, March, and April even while demand continues to rise. Additionally, wages and salaries rose in May. All of this points to the conditions that warrant opting out of the program," Ricci said.

Union leaders also said the lawsuit would seek unemployment benefits for thousands who claim to have applied for but never received their payments.

On Monday, the Department of Labor said 508,079 new unemployment claims have been flagged as potentially fraudulent.

READ MORE: More than 500k potentially fraudulent unemployment claims filed since May 1 in Maryland

The influx has prompted a severe slowdown in processing of new claims over the last several weeks.

As of Wednesday -- 37,088 claims are still pending review.

Along with the fraud, Ricci placed some of the blame on the General Assembly.

"The state continues to successfully process more than 97% of claims even while facing an onslaught of fraudulent claims each week," said Ricci. "For the small fraction that are pending, state law unfortunately leaves claimants vulnerable to being stuck in a complicated adjudication process. The General Assembly failed to address this problem during its 2021 session."

SEE ALSO: Despite hiring new vendor to verify IDs, 37,000+ unemployment claimants are still waiting

Two days before federal unemployment benefits are set to end, the COVID-19 related state of emergency will also be lifted, which removes several more protections for residents, including eviction moratoriums and extensions for expired driver’s licenses and registration plates.