An Oklahoma County Judge has temporarily reinstated extra benefits for unemployed Oklahomans that Gov. Kevin Stitt cut off early in late June.
Oklahoma is now one of three states where lawsuits have thwarted orders by governors to end the federally-increased unemployment aid early.
The expanded benefits offer $300 extra per week for those receiving unemployment payments and allowed workers traditionally barred from receiving the benefits such as gig workers and extended the amount of time workers could draw unemployment through Sept. 6.
The judge in the case, Oklahoma County District Judge Anthony L. Bonner, Jr., who Stitt appointed to the bench by Stitt earlier this year, heard arguments on Thursday from attorneys for the 13 plaintiffs in the case, which was originally filed in Tulsa County, and from the Oklahoma Attorney General’s Office, who represented defendant Oklahoma Employment Security Commissioner Shelley Zumwalt.
The Oklahoma Employment Security Commission must reinstate additional federal unemployment benefit programs and cannot withdraw the state from the program until a final judgment in the case is rendered or the program expires in September, Bonner said In an email to attorneys late Friday afternoon. The judge said he will issue a full order with more details on Monday,
One of the attorneys for the plaintiffs, Chad Smith, said he was happy with the judge’s decision.
“We are thankful for the careful consideration by the court today and pleased by the order for the Oklahoma Employment Security Commission to resume federal unemployment benefits to the petitions and all other hard working Oklahomans required to be on unemployment,” Smith said. “The court found it was the duty of the commission and the governor to accept these federal unemployment benefits for Oklahomans who were unemployed through no fault of their own.”
Zumwalt could not be reached for comment on Friday evening and a spokesman for the Oklahoma Attorney General’s Office did not respond to a phone message.
A dozen plaintiffs have joined the lawsuit since a Tulsa County woman filed a petition in July to reinstate expanded and extended unemployment benefits in Oklahoma that Gov. Stitt moved to end in order to encourage more people to return to work. The lawsuit has since been transferred to Oklahoma County District Court.
The suit claims Stitt did not have the authority to order the Employment Security Commission to end the extra benefits and that state law requires the commission to secure all available advantages for the unemployed from the federal government.
A group of 10 workers also filed a second against Stitt and the Oklahoma Employment Security Commission last month at the Oklahoma Supreme Court.
The U.S. The Chamber of Commerce, Oklahoma Chamber of Commerce, and the National Federation of Independent Businesses have filed a brief in support of the governor in the second case, arguing that cutting off payments early will address a labor shortage caused by the increased unemployment benefits. The business groups argue forcing more people back to work will stimulate the state’s economy and reduce unemployment.
The state Supreme Court has yet to agree to take the case, and a hearing with a court referee is set for Wednesday.
During the Oklahoma County hearing last week, attorneys for the Oklahoma Attorney General’s Office argued that Stitt had the power to order an end to extra benefits, since the Department of Labor required governors to approve the expanded payments.
Oklahoma and 25 other states have moved to end enhanced unemployment benefits before they expire on Sept. 6.
Lawsuits have also been filed against those actions in Indiana, Maryland, Ohio, Texas, Tennessee, Florida and Arkansas. Oklahoma now joints two other states — Indiana and Maryland — where lawsuits have resulted in the temporary reinstatement of extra benefits.
The federal government approved enhanced and expanded unemployment benefits to workers affected by the coronavirus pandemic in March 2020 as businesses shut down and many customers opted to stay home.
Those federally-approved benefits included a $600-weekly increase for individuals receiving unemployment benefits. Subsequent legislation lowered that amount to $300 extra per week. Federal programs also expanded unemployment benefits to workers who would not traditionally qualify, such as gig workers, and increased the number of weeks the unemployed could receive benefits.
In Oklahoma and other parts of the nation, unemployment applications surged in early 2020 to record levels not seen since the Great Depression, if ever, overwhelming the system. Eventually, the Oklahoma Employment Security Commission was able to implement the new benefits and get them to workers.
State business groups and state government officials have chaffed against the availability of increased unemployment benefits nearly since they went into effect last year after the passage of the CARES Act, saying they provided a “disincentive” for people to seek employment. In April last year, members of the Governor’s Council on Workforce and Economic Development mulled asking the federal government to stop increased benefits to Oklahomans.
Since then, Oklahoma’s unemployment rate has steadily declined.
On May 15, Gov. Kevin Stitt signed an executive order stating that the state, which administers the federal unemployment assistance funds, would no longer provide workers with the $300 weekly extra funds. Eligibility for Oklahomans to qualify for additional unemployment benefits programs would also be ended as of June 26.
In its place, the Governor ordered a “Oklahoma Back-to-Work Initiative” to provide a one-time $1,200 check to up to 20,000 people who leave the unemployment insurance program and are hired by qualified employers by Sept. 4.
Stitt said ending the increased benefits would help employers find workers to fill open positions.
“Since our state has been open for business since last June, the biggest challenge facing Oklahoma businesses today is not reopening, it’s finding employees,” Stitt said in a May 17 press conference announcing the plan to end expanded benefits. “For Oklahoma to become a Top Ten state, workforce participation must be at a top level and I am committed to doing what I can to help Oklahomans get off the sidelines and into the workforce.”
The move was praised by state business groups.
“Every employer I speak with, inside or outside of the state, is struggling to recruit workers,” said Chad Warmington, president and CEO of The State Chamber. “While federal programs provided needed benefits at the height of the pandemic when businesses were forced to shutter, these benefits have now incentivized workers to remain on unemployment after we have safely reopened our economy. Employers are offering competitive wages with generous benefits packages and workers are still refusing to return to work. It was time to stop disincentivizing hope and opportunity for Oklahomans.”
It’s still unclear whether ending expanded and enhanced unemployment benefits early has helped Oklahoma businesses find more workers.
States that ended the benefits early had a lower percentage of workers rejoining the workforce than states that kept the full federal benefits, as well as negative growth in employment levels, according to early analysis of employment and labor force data.
The analysis, conducted by payroll and time-management firm UKG, concluded that it was not increased unemployment benefits that prevented people from going back to work, but other factor in people’s personal lives.
On Friday, U.S. Labor Secretary Marty Walsh said early end to the enhanced and expanded unemployment benefits in some states had little to do with a better-than-expected jobs report last month.
And in Oklahoma, data thus far shows little movement in the way of a large pool of previously unemployed workers being gobbled up by employers looking to fill labor shortages.
By June this year, the state’s unemployment rate had already fallen to 3.7 percent, down from a peak of 14.7 percent in April last year. Oklahoma had the eighth lowest unemployment rate in the nation in June when Stitt ended the extra benefits. In February of 2020, just prior to the pandemic, Oklahoma’s unemployment rate was 3.2 percent.
Other indicators of whether cutting the benefits are also showing little movement.
During a meeting with businesses on Wednesday, Oklahoma Secretary of Commerce Scott R. Mueller said that labor force participation had remained steady at 60.7 percent, 38th in the nation. Mueller also said that Oklahoma ranked 8th in the nation for unemployment and 43rd in the nation for wages, with an average annual salary of $55,000. Increasing wages and recruiting higher paying employers to the state must also play a role in getting more people back to work, Mueller said.
“I think now the intention continues to be getting people back to work for a number of employers who are having a hard time manning staff, but also trying to increase Oklahoma’s per-capita personal income,” Mueller said.
Weekly unemployment claims data from the U.S. Department of Labor shows continuing unemployment claims haven’t yet seen a significant downward trend in the weeks after Oklahoma cut off extra benefits. As of July 24, continuing jobless claims remain about double the pre-pandemic level at 32,354, but initial claims have trended downward in the four weeks since the extra benefits ended.