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Gov. McMaster sued over termination of federal unemployment benefits

Four South Carolina residents are suing Gov. Henry McMaster and the head of the state’s...
Four South Carolina residents are suing Gov. Henry McMaster and the head of the state’s Department of Employment and Workforce over the termination of federal unemployment benefits.
Published: Jul. 29, 2021 at 12:25 PM EDT
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COLUMBIA, S.C. (WCSC) - Four South Carolina residents are suing Gov. Henry McMaster and the head of the state’s Department of Employment and Workforce over the termination of federal unemployment benefits.

The suit does not name the four plaintiffs, saying only that they live in the state and are eligible for one or more of the Pandemic Unemployment Benefits established by the CARES Act.

The suit alleges that as a result of McMaster’s order to state employment officials to stop paying out federal pandemic-related unemployment benefits after June 30, “plaintiffs have each suffered, and will continue to suffer, hardships related to the loss or reduction of their unemployment insurance benefits.”

While the recovery is underway, it is incomplete, the suit states, adding that the number of unemployed South Carolinians in May 2021 was approximately 78% higher than it was in Jnauary 2020 before the pandemic began.

The suit details benefits provided by the Coronavirus Aid, Relief and Economic Security Act, signed into law on March 27 that include:

  • Pandemic Unemployment Assistance: Available to workers who would not otherwise be eligible for regular unemployment insurance, including self-employed, underemployed, independent contractors and others whose unavailability to inability to work was caused by COVID-19.
  • Pandemic Emergency Unemployment Compensation: This benefit provides additional weeks of benefits for workers who exhausted their regular benefits.
  • Federal Pandemic Unemployment Compensation: This benefit increased the amount of regular unemployment insurance by $600 per week from March 27 through July 31. From Dec. 27, 2020 through Sept. 6, FPUC increases regular UI benefits by $300 per week. Workers who receive PUA and PEUC also reeive an additional $300 per week included in their benefit payments, although this is technically not an FPUC payment.

The suit alleges the funds were appropriated by Congress “to be distributed to eligible South Carolinians through Sept. 6,” and that the costs to states of administering the programs were fully federally funded.

It states that on May 6, SCDEW Executive Director Dan Ellzey issued a memo to McMaster on the potential impact of South Carolina “opting-out” of the benefits effective June 27. The suit states the memo estimated such action would result in the loss of the following amounts of federal funding from June 27 through Sept. 4:

That same day, the suit alleges, McMaster directed SCDEW to terminate the state’s participation effective June 30.

“The effect of Defendants’ actions on vulnerable South Carolinians were swift and dramatic,” the suit states. “In the first week after Defendants opted out of Pandemic Unemployment Benefits, the number of South Carolinians receiving unemployment benefits of any kind fell by more than 82%.”

The lawsuit asks the Fifth Judicial Circuit Court to rule that SCDEW is required to secure the federal benefits and that McMaster’s order to opt-out of the federal benefits and Ellzey’s compliance in terminating the benefits were unlawful. It also asks the court to issue an injunction requiring Ellzey to enter into a new agreement with the Department of Labor so that SCDEW could administer future and retroactive federal benefits.

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