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Lawsuit seeks to compel agency to continue federal benefits or be more specific about denials.

PMG FILE PHOTO - A federal lawsuit takes aim at the state unemployment benefit process and how it affects Oregon gig workers, like people who deliver food from local restaurants.Four workers have gone to federal court to compel the Oregon Employment Department to continue to pay federal benefits to self-employed and gig workers — or offer more specific reasons for agency denials based on more detailed proof of employment.

The four workers, represented by the Northwest Workers Justice Project, filed the lawsuit Wednesday, May 19, in U.S. District Court in Portland.

"The parties made a good faith effort through telephone conferences to resolve the dispute and have been unable to do so," according to the complaint.

Plaintiffs are Sharon Wurtz of Linn County, Michael Pearce of Josephine County, Matthew Belanger of Multnomah County and Stacey Quintero of Marion County. The lawsuit was filed by attorneys representing Legal Aid Services of Oregon, which represents the four plaintiffs, and the Oregon Law Center.

ocbNo court date has been set for the case.

Wurtz worked for traveling carnival company Davis Shows Northwest. The COVID-19 pandemic shut down the business, leaving her without work. In late 2019, Pearce started a small confectionary company and hoped to sell his wares at Southern Oregon festivals and events. That fell apart during the shutdown. Belanger was receiving federal pandemic relief funds but has been unable to get state funds, putting his new family in jeopardy. Quintero owned a post-construction cleanup business that also was shut down when the pandemic hit.

Local lawsuit also filed

Congress created the federal benefits last year at the onset of the coronavirus pandemic as part of the CARES Act. Most self-employed and gig workers were not covered by regular benefits from state unemployment trust funds. At the start, states accepted self-certification from workers as proof of employment under the new program.

When Congress extended those benefits at the end of last year, the law added requirements for states to verify proof of employment under what is known as Pandemic Unemployment Assistance. Congress did so after reports of widespread fraud in some states, including California and Washington. The program was extended by President Joe Biden's pandemic recovery plan to Sept. 4.

The minimum benefit is $205 per week, which also enables someone to receive a supplemental federal benefit of $300 per week.

The lawsuit filed May 20 does not challenge the new requirements. But it seeks a temporary restraining order or a preliminary injunction to block the Employment Department from cutting off benefits — or require it to be more specific about why it is rejecting information submitted by claimants to comply with the new requirements.

"When rejecting claimants' proof of employment, (the agency) did not explain why the proof was deficient, or how to remedy the deficiency," the lawsuit says. "Instead, and in blatant violation of state rules and procedures intended to enshrine due process protections, the agency sent boilerplate notices rejecting their proof of employment, with no claimant-specific information.

"Without a factual basis for their benefits termination, claimants are at a loss for how to proceed."

The lawsuit estimates that 7,200 claimants are affected so far.

The agency has said that if insufficient or no proof of employment is submitted by a deadline, benefits after Jan. 2 will be considered overpayments and subject to collection. Claimants can file appeals of agency determinations, but the lawsuit alleges that they will be hurt by not getting any money during the appeals process.

"The main component of the order plaintiffs seek is maintaining the status quo — not finalizing administrative decisions and resultant overpayment decisions and collection activities — while the parties litigate the legality of the procedures preceding the decisions," according to the lawsuit. "Doing so will not impose any hardship on the Oregon Employment Department."

The Oregon Law Center sued the Employment Department last year in Multnomah County Circuit Court over delays and language barriers in processing claims for regular unemployment benefits from the state trust fund. A proposed settlement was announced in February.

Under both lawsuits, claimants do not or would not get additional money. As the U.S. Supreme Court has interpreted the 11th Amendment to the Constitution, Congress is limited in its ability to subject states to lawsuits in federal courts, unless the lawsuits are aimed at enforcing the 14th Amendment and equal protection of the laws.

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