South Carolina Supreme Court Upholds Governor’s Early Termination of Federal Unemployment Benefits

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In a recent opinion, the South Carolina Supreme Court unanimously agreed with the lower court’s dismissal of a lawsuit brought by four individuals to challenge Governor Henry McMaster’s decision to end federal unemployment programs early.

In May, Governor McMaster issued a directive to South Carolina’s Department of Employment and Workforce to opt out of participating in the federal unemployment programs that were implemented in response to the pandemic.  Specifically, programs including the Pandemic Emergency Unemployment Compensation (PEUC) and the Pandemic Unemployment Compensation (PUC) established by the CARES Act provided additional weeks of benefits for workers who had exhausted their regular benefits, as well as an increase in the amount of regular unemployment benefits.  

While South Carolina’s participation in the federal unemployment programs was set to run through early September, Gov. McMaster determined that the state should opt out of the additional benefits by the end of June 2021.  Citing workforce shortages and concerns that the expanded federal programs disincentivized workers from going back to work, Gov. McMaster issued this plan with the stated goal of accelerating the economy by transitioning individuals from unemployment to employment.

The individuals who filed suit challenging Governor McMaster’s decision alleged they were still struggling to find work and asked the court to force Governor McMaster to rejoin the federal programs.  These individuals asserted that the governor’s actions dramatically affected vulnerable South Carolinians, as evidenced by the number of people receiving unemployment benefits in the state falling by more than 82% in the first week after South Carolina opted out of the federal programs.  

The lower court dismissed the lawsuit and on October 13, 2021, the South Carolina Supreme Court issued a decision upholding the lower court’s dismissal.  The court found that Gov. McMaster acted within his authority in ending South Carolina’s participation in the expanded federal benefits. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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