Thousands of unemployed Arizona workers are owed $2,400 in unemployment benefits because Gov. Doug Ducey illegally cut them off in July, a lawsuit filed in Maricopa County claims.
The lawsuit argues that Ducey violated state law when he ended the Federal Pandemic Unemployment Compensation program, which paid unemployed workers up to an additional $300 on top of their weekly benefit.
Similar lawsuits filed in other states have had mixed results, with some judges reinstating benefits and others swiftly ending the legal challenges.
“We’re talking about hundreds of millions of dollars that will go back to the pockets and the homes of Arizonans that most desperately need it at this moment,” said Neidi Dominguez, executive director of Unemployed Workers United, which filed the lawsuit on behalf of workers.
Unemployed Workers United is a project of the national social welfare nonprofit Working Families Organization, which advocates for working, middle class and poor Americans. The donor- and grant-funded group reported over $7.3 million in contributions in 2018, according to its tax filings.
The civil filing asks a Maricopa County Superior Court judge to order the state to retroactively pay the $300 weekly for the period between July 10, when Ducey ended the benefit, and Labor Day, when the supplemental federal benefits expired across the country.
More than 100,000 unemployed Arizona workers could get payments if the lawsuit is successful, according to Unemployed Workers United. If each gets $2,400, which is $300 for each of eight weeks since Ducey stopped the benefit, that could amount to roughly $240 million. It is unclear if the state could retroactively receive the funds from the federal stimulus programs.
Unemployment aid during pandemic
The 2020 CARES Act, the first federal stimulus program rolled out during the COVID pandemic, set the benefit at $600, and it was reduced to $300 in a December 2020 stimulus bill and the American Rescue Plan approved by Congress in March 2021.
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Those payments supplemented the up to $240 weekly unemployment benefit for eligible Arizona workers.
About half of all states chose not to continue the $300 supplement, according to an Aug. 22 report from the Congressional Research Service.
Lawsuits have followed in several states, and judges in Indiana and Maryland issued orders prohibiting early termination of the benefits, according to the report. Elsewhere, like in South Carolina, similar lawsuits were tossed out of court.
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Arizona was one of just six states that used funds to create a return-to-work bonus, according to the National Conference of State Legislatures. When it announced Arizona would end the $300 a week supplement, Ducey’s administration also said workers would be eligible for a $2,000 payment for returning to work, if they met certain criteria.
“The timing of this suit is noteworthy,” Ducey spokesperson C.J. Karamargin said in an email, pointing to the state’s recovery from the economic turmoil of the pandemic as evidence in favor of the governor’s approach incentivizing people to return to work. The state has recovered roughly 95% of jobs lost during the pandemic, according to data from the Arizona Office of Economic Opportunity.
“Arizona is recovering faster than nearly all other states, our labor force is rebounding and every week there seems to be an announcement about companies relocating to Arizona or expanding,” Karamargin said.
The lawsuit alleges that the decision to cut off weekly benefits violates a state law that directs the Arizona Department of Economic Security to “[t]ake such actions as may be necessary to secure to this state and its citizens all advantages available under the provisions of the social security act that relate to unemployment compensation.”
It says the U.S. Supreme Court’s decision late last month to end the eviction moratorium created more hardship for unemployed workers who need federal benefits.
Ducey and Department of Economic Security Director Michael Wisehart are listed as defendants in the lawsuit. Three unemployed workers are also named as plaintiffs.
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Workers describe need for money
Marcela Puente Huerta, of Tucson, lost her job at Macy’s department store at the outbreak of the pandemic, the lawsuit says. Because she did not receive the additional unemployment benefits, Puente Huerta can’t afford to pay bills or purchase her husband’s medication for rheumatoid arthritis, the lawsuit says.
Two other parents who lost their jobs or had their hours cut during the pandemic could avoid eviction if they are given the supplemental benefit, the lawsuit states.
Stephanie Akins, 47, of Avondale, said she had just moved into an apartment but was evicted early in the pandemic, despite a prohibition being in place. Akins is not a plaintiff in the case, but spoke during a press conference highlighting the lawsuit on Tuesday.
Akins estimated she has lived in seven different places since she was evicted — hotels, her car, and with a high-school friend, among others. She filed for bankruptcy and went through a divorce during the pandemic, all while trying to care for her 8-year-old daughter, she said.
And despite putting in 23 job applications, Akins is still looking for work. The additional unemployment money would help until she can find steady employment, she said.
“It’s just disheartening, and I just hope that the courts do see that I’m not the only one,” she said. “I’m one of so many people that are willing to go back to work.”
Reach reporter Stacey Barchenger at email@example.com or 480-416-5669. Follow her on Twitter.
AUTHOR: Stacey Barchenger