Check with two hundred dollar bills on top.

Louisiana has become the first state with a Democratic governor to pass a law eliminating the $300-per-week supplemental unemployment benefit created by the federal American Rescue Plan Act of 2021 (ARPA). Under the new measure, Act No. 276, which Governor John Bel Edwards signed into law on June 15, 2021, Louisiana eliminated the $300 benefit, effective August 1, 2021, while increasing the weekly maximum benefit amount.

Under the ARPA, signed by President Joe Biden in March 2021, Congress provided a supplemental unemployment benefit of $300 per week to help offset the wide unemployment caused by the COVID-19 pandemic. The supplemental amount was paid in addition to the weekly unemployment benefit amounts payable under state law. The maximum weekly benefit amount will increase to $312 on January 1, 2022.

With increased vaccinations, Louisiana’s economy has gradually reopened with an acute demand for workers, especially in the service sector. In Louisiana, as in many other states, business groups, headed by the Louisiana Association of Business and Industry, the state’s chamber of commerce, spearheaded an effort to repeal the $300 weekly benefit payment widely perceived as disincentivizing employees from returning to the workplace.

But wait! There’s more …

On July 30, 2021, six Louisiana residents filed a lawsuit in state court to challenge the executive action that effected the termination of the $300-per-week supplemental federal unemployment benefit. The federal supplemental benefit is scheduled to expire on September 6, 2021.

The plaintiffs allege that they will suffer undue hardship as a result of the termination of the federal benefit, especially given the fact that Louisiana is among the states hardest hit by the Delta variant of the coronavirus. The lawsuit mirrors similar actions filed in Indiana and other states. (The lawsuit in Indiana was successful and resulted in the reinstatement of the $300-per-week supplemental benefit.) The plaintiffs argue that Louisiana’s unemployment compensation law mandates that state officials secure federal benefits funding when available, thus rendering the repeal of the $300 benefit unlawful.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.

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