IOWA CITY, Iowa — A proposed class-action lawsuit claims that Iowa Gov. Kim Reynolds’ decision to cut off enhanced unemployment benefits for tens of thousands of residents violated state law and asks a court to reinstate their eligibility.
The lawsuit, filed this week in Polk County, seeks to make claimants eligible for potentially hundreds of millions of dollars in unemployment aid they have been denied since Iowa dropped federal pandemic benefit programs June 12.
Reynolds, a Republican, announced in May that Iowa would end participation in federal programs that provided an extra $300 per week to those receiving unemployment benefits and expanded eligibility criteria. She cited a “severe workforce shortage” affecting employers and said the benefit cuts would encourage those affected to return to work, although the impact has been unclear.
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 “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.
