During the COVID-19 pandemic, the United States saw record unemployment rates. With most states besides South Dakota still seeing unemployment rates higher than they'd seen since the last recession, they've been quite busy managing their unemployment administration systems.

Lower-tax states like Nevada have seen particular difficulty. This is because they likely didn't have a huge monetary buffer already. They then were required to suddenly make system adjustments. Unfortunately, sometimes these updates to their unemployment systems caused problems because they were deployed before all the major bugs were removed.
 

The Unique Case of Nevada

Nevada saw staggeringly-high unemployment rates of unemployment due to the COVID-19 pandemic. Among all 50 states, it saw the highest peak unemployment rate of 28% in the midst of the pandemic. This was after casinos and other tourism industries were ordered to close temporarily by the governor of the state to help curb further spread of the virus. Experts estimate that the rate may have actually hit 40% at one point!

This left Nevada's DETR, the state's unemployment insurance agency, unprepared. More specifically, DETR wasn't prepared to implement the Pandemic Unemployment Assistance (PUA) program. This was a portion of the CARES Act, passed by Congress in March. It extended standard state unemployment insurance to freelancers and members of the "gig economy". These classes of people had never historically had access to public unemployment insurance.
 

Three People Sue Nevada's DETR

This class action suit started with three PUA claimants. Stretching all the way back to July of 2020, three people who had claimed PUA benefits in March of 2020 had still not gotten paid. They decided to join forces and sue the DETR, who was ordered in July to pay out all PUA claims.

The judge in the case outlined four exceptions that DETR could cite as a valid reason to deny a claim. These reasons were clear and convincing evidence of fraud, if someone is awaiting a fraud hearing, and other technical reasons. These applied to none of the three plaintiffs in the case.
 

What Was the Exact Issue?

After this group of PUA claimants filed their claims with the DETR, their payments initially started out fine. However, seemingly without reason and without explanation, their payments simply stopped. The DETR said there was an algorithm that determined their claims were fishy, but no further evidence could be provided to support this case. With the DETR facing huge budget shortfalls, many are skeptical that the DETR simply got caught trying to save money by not paying out.

A judge ordered the DETR to begin immediately paying these three individuals and everyone in their class to whom the four "valid denial reasons" did not apply. Unfortunately, many still have not seen their PUA payments come back for months on end.
 

What Is the New Ruling?

News headlines about the story tend to focus on the amount the court fined DETR. This was only $1,000, so people naturally assumed it was a simple slap on the wrist. However, the DETR was actually held in contempt of court for not following orders and publicly admonished.

The judge of the case has suggested that additional reparations will be necessary to defendants. This is because there are clear repercussions for this class of person due to what's technically "criminal conduct" by Nevada's DETR. Additionally, the DETR has immediately begun to pay out PUA claims. In the new ruling, DETR now has until Christmas Eve to pay out claims before they are held in contempt yet again.
 

How Do I Join?

Because PUA is a public program, the court already has access to the database of members of the class. If you have filed a PUA claim or do so before the CARES Act fully expires on December 26, 2020, you will be considered a member of the class. The actual settlement amount and what eligible claimants might be eligible to receive in addition to their claim amounts is still yet to be seen.

At a minimum, this suit is certainly the final spur for DETR to pay out PUA claims. There will likely be a follow-on lawsuit regarding a breach of the fourteenth amendment. This amendment guarantees the right to equal protection under the law. By treating those covered under traditional unemployment insurance differently than those covered under the new PUA program, there's a chance that it was violated.