Unemployed people in Arkansas have won back their benefits, marking the third state to reverse aid cuts

unemployment insurance weekly benefits stimulus checks recession job losses coronavirus pandemic
Carlos Ponce joins a protest in in Miami Springs, Florida, asking senators to continue unemployment benefits past July 31, 2020.

  • Unemployed workers in Arkansas are the latest to win back their federal benefits.
  • They follow similar temporary legal victories in Maryland and Indiana, with thousands getting benefits restored.
  • However, the lawsuits have won back benefits the Biden administration didn’t intervene to restore.
  • See more stories on Insider’s business page.

Unemployed workers in Arkansas are the latest group to win back their federal unemployment benefits after Gov. Asa Hutchinson moved to terminate them ahead of the September expiration.

In a Thursday ruling, Judge Herbert Wright said that, as a lawsuit against the state continues, the state must restart benefits for Arkansas residents. Wright wrote that plaintiffs “are likely to suffer harm” if the state doesn’t restore financial aid and that the “Court has serious doubts that the Governor and the Director of Workforce Services were acting within the scope of their duties.”

One of the five plaintiffs in the suit said they’ve been unable to get their prescribed medications, since they can’t afford them after the expiration of benefits. Another said they’ve been unable to pay medical bills for their daughter, who broke her arm, and cannot afford food.

The new ruling could impact just under 70,000 Arkansas residents, according to an estimate from Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation. A little under 52,000 of those recipients were eligible to receive benefits under federal programs that expanded both eligibility and the number of weeks that jobless workers can collect checks. That means that those workers lost all benefits – not just the additional $300 week from the federal government – when Arkansas halted its participation in federal unemployment in June.

The temporary victory in Arkansas comes after workers in Indiana and Maryland successfully clawed back their benefits through similar preliminary injunctions. Suits against governors for ending benefits have popped up across the country, with 10 Florida residents filing a suit against Governor Ron DeSantis over ending the additional $300 weekly.

However, a similar suit in Ohio was just rejected, according to the Cincinnati Enquirer.

The suits come after Biden’s Department of Labor essentially found that there’s no much it could do to step in and provide benefits for workers in states cutting them off. Instead, workers have been taking matters into their hands with lawsuits.

While many governors moved to end enhanced benefits in a proclaimed effort to get workers back into the workforce, preliminary evidence has shown that might not be the case. A study from Arindrajit Dube, an economics professor at University of Massachusetts Amherst, found that workers didn’t flock back to work after having benefits cut. And health concerns might still be keeping many at home: An analysis by economist Luke Pardue at payroll platform Gusto found that, of the states that cut benefits early, workers returned in states with higher vaccination rates – but didn’t come as back as quickly in less-vaccinated states.

Are you unemployed and have a story to share? You can contact this reporter at jkaplan@insider.com.

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Companies were fined $1 million after officials said a poultry plant leak that killed 6 employees was ‘entirely avoidable’

A photos of the Foundation Food Group sign with police tape in front of it.
Tanks of liquid nitrogen are seen at the Prime Pak Foods poultry processing plant after a liquid nitrogen leak earlier in the day resulted in six deaths and multiple hospitalizations on January 28, 2021, in Gainesville, Georgia.

  • A liquid nitrogen leak at a poultry plant in Georgia killed six workers in January.
  • Federal officials said Friday their deaths were “entirely avoidable” had the proper precautions been taken.
  • Four companies have been fined a total of near $1 million in the incident.
  • See more stories on Insider’s business page.

Four companies have been fined a total of almost $1 million for a liquid nitrogen leak at a poultry plant in Gainesville, Georgia that killed six employees, federal officials said Friday.

An investigation by the Department of Labor’s Occupational Safety and Health Administration found Foundation Food Group and Messer “failed to implement any of the safety procedures necessary to prevent the nitrogen leak, or to equip workers responding to it with the knowledge and equipment that could have saved their lives,” the agency said in a statement.

Foundation Food Group is a poultry processing company based in Gainesville. Messer is an industrial gas company based in Bridgewater, New Jersey, that installed the freezer system at the plant that was the source of the leak.

Read more: Meet the 9 top lawyers suing governments and energy companies like Exxon over the climate crisis

The leak occurred on January 28 when a freezer at the poultry processing facility malfunctioned, “releasing colorless, odorless liquid nitrogen into the plant’s air, displacing the oxygen in the room,” the statement said.

Three plant maintenance workers entered the freezer and died immediately. OSHA said they had never been trained on the dangers of liquid nitrogen. Two other workers also died immediately, and a sixth died while en route to the hospital. At least a dozen other workers at the facility were injured and transported to hospitals.

“Six people’s deaths, and injuries suffered by at least a dozen others, were entirely avoidable,” U.S. Labor Secretary Marty Walsh said in the statement. “The Department of Labor is dedicated to upholding the law and using everything in our power to get justice for the workers’ families.”

The victims were identified by the Hall County Sheriff’s office as Jose DeJesus Elias-Cabrera, 45; Corey Alan Murphy, 35; Nelly Perez-Rafael, 28; Saulo Suarez-Bernal, 41; Victor Vellez, 38; and Edgar Vera-Garcia, 28.

Gainesville is often called the “Poultry Capital of the World” due to its large number of poultry plants. The city has a population of about 40,000 people, about 40% of which are Hispanic.

The OSHA statement said repeatedly that the deaths were avoidable had the proper precautions been taken.

“This horrible tragedy could have been prevented had the employers taken the time to use – and teach their workers the importance of – safety precautions,” Kurt Petermeyer, an OSHA regional administrator in Atlanta, said. “We hope other industry employers learn from this terrible incident and comply with safety and health requirements to prevent similar incidents.”

The companies were cited for 59 violations, totaling $998,673 in fines.

The other two companies implicated were Packers Sanitation Services of Kieler, Wisconsin, which provided cleaning and sanitation services to the plant, and FSGroup of Albertville, Alabama, which manufactures equipment and provides mechanical servicing.

Insider has reached out to all four companies for comment.

Foundation Food Group said in a statement to The New York Times that it would challenge some of the citations that “it believes to be unjustified and unsupported by the facts.” It said it would continue working to address the “root cause,” which it said had to do with a bent tube on the freezer that could not accurately measure the amount of liquid nitrogen. The tube was not addressed in OSHA’s citations.

Packers Sanitation Services told the Times it disagreed with its fines and that its employees “were in no way involved with this tragic incident.”

Have a news tip? Contact this reporter at kvlamis@insider.com.

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Biden’s Labor Secretary is watching ‘very closely’ after Indiana tried to cancel federal unemployment benefits and a judge intervened

Labor Secretary Marty Walsh
Labor Secretary Marty Walsh.

  • Indiana moved to cancel extra unemployment benefits, but a judge has halted that.
  • Labor Secretary Marty Walsh told Insider he’s watching the situation closely.
  • The state has since said that it can’t start up those benefits again, HuffPost reports.
  • See more stories on Insider’s business page.

In Indiana, federal unemployment benefits ended early – until they didn’t. Biden’s Labor Secretary told Insider that he’s on the case.

After the state’s announcement that the $300 weekly benefits would end on June 19, instead of the scheduled September end date for the program nationwide, impacted Hoosiers brought a lawsuit against the state and won a preliminary injunction last week that would preserve benefits for thousands as the case proceeds.

But, as HuffPost’s Arthur Delaney reported, the state’s Department of Workforce Development “claims it can’t bring back the benefits.” Scott Olson, a spokesman for the agency, told Delaney in an email that Indiana is “is determining how to proceed because the federal programs in Indiana no longer exist after their termination on June 19.”

When asked if the Department of Labor has any plans to step in and ensure impacted Indiana residents receive their benefits, Labor Secretary Marty Walsh told Insider, “we’ve been in contact with the state, and we’re watching this unfold very closely.”

“I was actually in Indiana last week – I was at a vaccine site – and I was talking to a mother, with her son, to get vaccinated, and she talked to me about the unemployment benefit piece and that she was having a hard time finding a job,” Walsh said. He added: “We’re gonna monitor the situation as we move forward here.”

The case represents one of the latest attempts by unemployed workers to retain their benefits. Over half of the states in the country have opted to end their federal benefits early, cutting off workers throughout the summer.

Many jobless workers who were newly eligible for unemployment insurance under the expanded federal programs could now lose all benefits.

Broadly, 4 million workers will be impacted by benefits ending early. Some politicians and advocates – including Sen. Bernie Sandershave argued that the Department of Labor is obligated to continue paying out Pandemic Unemployment Assistance (PUA), which made gig workers, among others, eligible for benefits. However, the Labor Department concluded it probably can’t step in and continue those payments in states that have ended the program early.

When asked about the impact that benefits ending early had on jobs, Walsh said that, “in the states that have threatened or have cut unemployment benefits, we have not seen an uptick of job searches.”

He added: “I think that what’s driving our economy is not the threat of cutting unemployment benefits. What’s driving the economy is confidence in people coming back to work.”

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Biden said he’d cut down on unemployment benefits, but he really might reinstate a pre-pandemic job-seeking policy

Biden
President Joe Biden.

  • Biden is pushing states to reinstate job-seeking requirements for people to stay on unemployment.
  • “Anyone collecting unemployment who is offered a suitable job must take the job,” he said.
  • It comes as the GOP ramps up criticism that unemployment aid is dissuading people from seeking jobs.
  • See more stories on Insider’s business page.

President Joe Biden said in a speech on Monday that Americans receiving unemployment benefits must either take a job that is “suitable” or lose their benefits, as he encouraged states to reinstate a pre-pandemic policy of requiring people to search for work.

“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said at the White House.

According to a White House fact sheet released after the speech, the Department of Labor will “reaffirm longstanding” unemployment-insurance requirements to ensure that states, workers, and employers understand the rules regarding the benefits.

The Department of Labor will also issue a letter to states reaffirming that people receiving benefits cannot turn down a suitable job to continue receiving their benefits.

Experts said these job-seeking guidelines were in place before the pandemic, and states scrapped them last year as the economy crashed, which caused a surge in unemployment. While the economic situation is improving, those experts said factors like a lack of childcare and school closures were keeping some people out of the workforce.

“On the whole, the Biden Administration is moving to return UI slowly like the rest of the economy to its” pre-pandemic rules, Andrew Stettner, an unemployment expert at the Century Foundation, said in emailed comments to Insider.

“Advocates are concerned that policy makers ensure that no workers are cut of off benefits because they cannot find affordable child care, and the reinstatement of work search requirements raises the stakes for this type of protections,” he added.

This announcement came after a jobs report last week that fell significantly short of expectations, with Republican lawmakers casting the blame on too-generous unemployment benefits disincentivizing Americans from returning to work.

While Biden said in his speech that “we don’t see much evidence” of benefits hurting job growth, his remarks suggested he was listening to GOP criticism on the issue.

Since the start of the pandemic, Republicans and businesspeople have criticized expanded unemployment insurance – inserted into March 2020’s CARES Act by Democrats in the House – as too generous. While the $600 federal unemployment addition to weekly benefits expired last year, Congress reinstated it in December at $300 a week, which Biden extended through September 6 as part of the stimulus law in March.

The US Chamber of Commerce called for an end to the benefits in the wake of the April jobs numbers, but Democrats like Sen. Bernie Sanders of Vermont said on Twitter that “workers desperately need” the benefits.

While states waived their unemployment-benefits work requirements at the start of the pandemic, 39 of them have already started, or are planning to, reimpose them.

Biden said: “We’ll insist that the law is followed with respect to benefits, but we’re not going to turn our backs on our fellow Americans.”

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Biden’s Labor Secretary insists April’s weak jobs gain of 266,000 ‘is a good number’

Boston Mayor Marty Walsh
Labor Sec. Marty Walsh.

  • The April jobs report fell far short of the 1 million growth expectation, adding just 266,000 jobs.
  • Labor Secretary Marty Walsh said he still thinks that 266,000 “is a good number.”
  • He said expanded federal unemployment insurance is still needed despite calls to end the benefits early.
  • See more stories on Insider’s business page.

The Friday jobs report was a major disappointment, as the US economy added just 266,000 jobs in April despite economists predicting a gain of at least 1 million.

But Labor Secretary Marty Walsh said on CNBC that this report should still be celebrated.

“I think as we continue to move forward here, hopefully in the coming months we are going to see lots of those Americans who are looking for jobs, finding jobs, and I’ll be able to stand in front of this camera and talk about the great gains we’ve had,” Walsh said. “But I still think 266,000 jobs this month is a good number.”

“If you look back on the last three months, the United States economy has added 500,000 new jobs per month as compared to the previous three months where it was 60,000,” Walsh said. So we are definitely going in the right direction but we still have a ways to go, there’s no question about it. We are still dealing with a pandemic.”

Insider’s Ben Winck reported on Friday that along with the disappointing job gains, the unemployment rate rose in April to 6.1% from 6%, while economists had expected it to drop to 5.8%. Possible reasons for the report falling short of expectations could include temporary layoffs and too-generous unemployment insurance.

The report highlights an increasing split between the weak jobs recovery and a booming economy led by consumer spending. For instance, US gross domestic product grew at an annualized rate of 6.4% in the first quarter – the second-strongest expansion since 2003. Insider’s Juliana Kaplan and Grace Kay reported on shortages of all sorts of items amid reopening, such as chicken and lumber, all evidence of a sudden increase in spending.

Walsh criticized the argument that unemployment benefits are to blame for the weak jobs report. He said people “obviously” need unemployment benefits given the millions of Americans who are still out of work.

At nearly the same time, the Chamber of Commerce urged an end to the $300 weekly benefits, with the chamber’s chief policy officer, Neal Bradley, saying in a statement that the “disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market.”

But Walsh remained adamant that retaining unemployment benefits is vital to economic recovery.

“We have lost restaurants. We have lost businesses,” Walsh said. “I wouldn’t say we are in the midst of pandemic … but we are still living and dealing with the pandemic, and as we continue to move forward here we will continue to recover.”

Walsh emphasized that as vaccinations continue, “we are starting to see the confidence come back.”

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If you were overpaid unemployment insurance, the Biden administration says you should be able to keep some

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A person files an application for unemployment benefits on April 16, 2020, in Arlington, Virginia.

  • The US Department of Labor issued guidance Wednesday that lets states waive recovery of unemployment insurance overpayments.
  • “In many cases, individuals received payments for which they may not have been eligible through no fault of their own,” the department’s Suzi LeVine said.
  • States that already collected repayments should give that money back, the department said.
  • See more stories on Insider’s business page.

When COVID-19 hit the United States, millions of Americans were thrown out of work – some 14 million between February and May 2020 alone – with claims for unemployment following in kind. Governments, and applicants, made mistakes: according to a recent report, states ended up doling out $6.2 billion in overpayments.

Now the US Department of Labor has issued guidance to states that recommends letting people keep that extra money, so long as they did not commit fraud to get it.

“Amid the pandemic, state Unemployment Insurance programs did the best they could in the face of unprecedented demand as millions of Americans filed claims for benefits,” Suzi Levine, the department’s principal deputy assistant secretary for employment and training, said in a statement on Wednesday.

“In many cases,” she said, “individuals received payments for which they may not have been eligible through no fault of their own.”

Under the first round of COVID-19 stimulus, known as the CARES Act, the federal government provided unemployed workers an extra $600 in benefits above the amount they would normally have received from their state alone. That money came with a requirement for states to address fraud, with this week’s guidance noting that those who are found to have lied must still pay back their money with 15% interest and possible criminal prosecution.

It wasn’t until last December, however, that Congress allowed states to decide whether or not it was worth their time – and morally correct – to demand that money back in every case, per CNBC; in Texas alone, 260,000 people were asked to do just that between March and October 2020, the network reported.

According to the department’s new guidance, such waivers should indeed be issued when the recipient did nothing wrong and when “repayment would be contrary to equity and good conscience.”

And if a state has already recovered the money, prior to this guidance? It should, generally, go ahead and give it back, the department said.

States, not the federal government, will ultimately make the call. But, LeVine said, they now have “greater flexibility to forgo recovery of improper payments from honest workers who continue to struggle,” allowing them to focus on those cases “where real fraud exists.”

Have a news tip? Email this reporter: cdavis@insider.com

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Google will pay $2.6 million to workers over claims its hiring and pay practices were biased against women and Asians

FILE PHOTO: A logo of Google is seen at an office building in Zurich, Switzerland July 1, 2020.   REUTERS/Arnd Wiegmann
Logo of Google is seen at an office building in Zurich

Google has reached a deal with the US Department of Labor, requiring it to pay nearly $2.6 million in back wages to thousands of workers over claims that the company’s pay and hiring practices illegally disadvantaged women and Asians.

Google must also review its pay and hiring practices, conduct a gender pay equity study, and provide updates about its progress toward closing the gender pay gap as part of the deal, which was signed on January 15 and made public by the DOL on Monday. 

The department said that as part of an audit of several Google locations in Washington state, California, and New York, it had identified “preliminary indicators” that Google had failed to comply with a 1965 executive order that bars discrimination in the pay and hiring of federal contractors.

That audit revealed early evidence suggesting that, between 2014 and 2017, Google had paid female engineers at its Mountain View, California, as well as Seattle and Kirkland, Washington, locations “less than comparable male employees,” according to the DOL.

The agency also found evidence suggesting Google had discriminated against female and Asian applicants for engineering jobs at its San Francisco and Sunnyvale, California, locations as well as at the Kirkland facility.

“We believe everyone should be paid based upon the work they do, not who they are, and invest heavily to make our hiring and compensation processes fair and unbiased,” Google spokesperson Jennifer Rodstrom told Insider in a statement.

“For the past eight years, we have run annual internal pay equity analysis to identify and address any discrepancies. We’re pleased to have resolved this matter related to allegations from the 2014-2017 audits and remain committed to diversity and equity and to supporting our people in a way that allows them to do their best work,” Rodstrom added.

In total, around 2,565 women who worked at Google are eligible for back pay over wage discrimination allegations, while around 2,976 women and Asian applicants for Google jobs are eligible for back pay as a result of the alleged hiring discrimination.

In return for agreeing to the DOL’s “early resolution,” Google won’t have 39 of its facilities audited by the agency for five years, though the agency can still bring legal action if Google violates the agreement.

Google has faced allegations of racial and gender bias previously, including an ongoing class-action lawsuit over gender bias claims, and more recently, an employee rebellion over the company’s dismissal of AI ethics researcher Timnit Gebru.

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New Trump rule could cost waiters more than $700 million in lost wages, allowing employers to take more of their tips to pay other workers

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A new Trump administration rule could cost tipped employees more than $700 million in lost wages each year.

  • A new rule published by the Department of Labor on Tuesday would allow restaurant owners to take employees’ tips to pay “back-of-the-house” workers, such as cooks and dishwashers.
  • An analysis by the Economic Policy Institute found that change could cost workers more than $700 million in lost wages.
  • The regulation also allows employers to required tipped employees to perform more “non-tipped” labor, such as cleaning.
  • “It’s really, really clear this is about the interests of corporate executives and shareholders,” Heidi Shierholz, an economist at EPI, told Business Insider.
  • Visit Business Insider’s homepage for more stories.

A new regulation rolled out in the final days of the Trump administration will allow restaurants to pull tips from their waitstaff to pay cooks in the back, putting more cash in the pockets of ownership while forcing front-of-the-house staff to do more work for less money.

Employers, to this point, have been allowed to pool tips and share them among employees who typically receive them; for example, servers giving a share of their earnings to hosts and bussers. The 148-page regulation put out Tuesday by the Department of Labor would expand that, allowing restaurants to pay the wages of prep cooks and dishwashers with money earned by those waiting tables.

The rule also does away with a so-called “80/20” rule: previously, tipped employees – who can earn as little as $2.13 an hour in wages from their employer – could not be asked to spend any more than 20 percent of their shift performing non-tipped work, like rolling silverware or cleaning the workplace. The new standard is “reasonable time” spent doing such things.

“It’s totally ambiguous and makes it extremely difficult to enforce,” Heidi Shierholz, director of policy at the center-left Economic Policy Institute, told Business Insider.

The Trump administration’s stated purpose for rule is equality.

Cheryl Stanton, administration of the wage and hour division at the Department of Labor, said the rule “could increase pay for back-of-the-house workers, like cooks and dishwashers… reduc[ing] wage disparities among all workers who contribute to the customers’ experience.”

But this achieved not at the expense of those running the business but at the cost of others employed there.

In a 2019 analysis, EPI estimated that allowing employers to pocket workers’ tips would save the former more than $700 million a year – and cost the latter the same amount. That, and doing away with the “80/20″ rule,” would also encourage those employers to rely more heavily on tipped labor. Why pay cleaning staff the federal minimum wage of $7.25 an hour when tipped employees, who cost a fraction of that, can be asked to perform the job instead?

“It’s really, really clear this is about the interests of corporate executives and shareholders. Like that is what’s driving this,” Shierholz said. 

“If there really was a strong interest in reducing inequality and raising the wages of the lowest-paid workers, they would be pushing tooth and nail to raise the minimum wage,” Shierholz added.

Indeed, “there is a direct way to do this,” Shierholz argued, “instead of saying, ‘Oh, we’re going to raise the wages of the lowest-paid workers by taking from the wages of the second-lowest paid workers.'”

It is notable that it was not advocates for labor but rather their bosses that lobbied for the change. 

Read more: EXCLUSIVE: Jared Kushner helped create a Trump campaign shell company that secretly paid the president’s family members and spent $617 million in reelection cash, a source tells Insider

“The foodservice industry supports the department’s proposed rule,” lawyers for the Restaurant Law Center and the National Restaurant Association said last year when the change was being developed. They billed it as an act of deregulation – and end to bureaucrats “trying to micromanage restaurant work.”

The new rule, however, does not take effect for another 60 days – that is, until the next administration. It is possible, but not clear, that President-elect Joe Biden and his team could postpone its implementation while working to rescind it.

A spokesperson for the Biden-Harris transition team did not return a request for comment.

Have a news tip? Email this reporter: cdavis@insider.com

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