Iowa Workers Sue State Over End of Extra Unemployment Benefits, Seek Their Reinstatement

Iowa workers filed a class-action lawsuit this week claiming that the halting of extra unemployment benefits by Gov. Kim Reynolds breached state law, and requested that a court resume the aid, the Associated Press reported.

The extra benefits, providing an extra $300 a week to people receiving unemployment aid and broadening the eligibility requirements, ended on June 12.

Reynolds announced in May that she was withdrawing Iowa from the federal program to offset a "severe workforce shortage." The Republican governor claimed that ending the extra aid could motivate people to go back to work, but it is unknown whether the decision has had that impact since it took effect, the AP reported.

The suit, filed in Polk County, looks to claim what could be hundreds of millions of dollars in unemployment money that beneficiaries would have received in the time since the program ended, as well as reinstate their eligibility for the benefits.

For more reporting from the Associated Press, see below.

Gov. Kim Reynolds at RNC
Iowa workers filed a lawsuit aimed at reversing Gov. Kim Reynolds' decision to end extra unemployment benefits in the state. In this screenshot from the RNC’s livestream of the 2020 Republican National Convention, Reynolds addresses the virtual convention on August 25, 2020. Committee on Arrangements for the 2020 Republican National Committee via Getty Images

The lawsuit claims the decision violated a law that says Iowa "shall cooperate with the United States Department of Labor to the fullest extent" required in order "to secure to this state and its citizens all advantages available" under federal unemployment programs.

Reynolds is one of 26 governors, mostly Republicans, who have taken similar steps, ahead of the Sept. 6 date that the federal aid is set to expire.

Lawsuits have been filed in about half of those states, including Ohio, Texas and Florida, on behalf of affected unemployed workers. They have had mixed success and several are still in litigation.

The Iowa lawsuit includes three named plaintiffs but estimates the class could involve anywhere from 30,000 to 55,000 people who have been deprived of "life-sustaining benefits" for which they should be eligible.

They include claimants who were receiving the $300 weekly supplement; who were eligible for unemployment after exhausting their 26 weeks of state benefits; and independent contractors and self-employed individuals who were eligible if they had been unable to work due to COVID-19.

Iowa had been paying out nearly $33 million through the programs per week when Iowa Workforce Development Director Beth Townsend recommended ending them in May, according to a memo from Townsend.

The Century Foundation, a progressive think tank, has estimated that $337 million in benefits could be at stake for Iowa claimants during the 12-week cutoff period.

The lawsuit describes how the pandemic affected the plaintiffs' employment prospects and how the cutoff in benefits hurt their finances.

Crystal Marciniak of Garner, Iowa took time off from her job as a pig care manager for carpal tunnel surgery in March 2020 as Iowa saw its first COVID-19 cases, and her return to work was subsequently delayed, the lawsuit states. She had been using unemployment benefits to pay for food, housing and other items for her two children, and has since depleted her savings after they were cut off in June.

Brian Wisch of Ankeny was laid off from his job with Collins Aerospace in West Des Moines in May 2020 due to lack of demand caused by the pandemic. The company told him he might be rehired when the business rebounded, but he is no longer sure that will happen and had used his benefits for basic expenses while looking for a job.

Karla Smith had been working at a Casey's convenience store in retirement to make ends meet but quit in March 2020 after a doctor advised that her preexisting lung condition made it dangerous for her to work in retail. The benefit cuts left her "without a critical income source" just as the Delta variant has caused a new wave of hospitalizations and deaths in the state, according to the lawsuit.

The lawsuit seeks a temporary restraining order requiring the state to resume participation in the programs, and an order for the state to pay back benefits that are owed with interest.

Iowa Sen. Chuck Grassley at Hearing
Iowa workers are reinstate their eligibility in a federal program that provides extra unemployment benefits after Gov. Kim Reynolds withdrew state workers from the program. Chairman Chuck Grassley, R-Iowa, left, speaks with Sen. Rob Portman, R-Ohio, during a Senate Finance Committee hearing on COVID-19/Unemployment Insurance on Capitol Hill in Washington on June 9, 2020. Caroline Brehman/POOL/AFP via Getty Images