OKLAHOMA CITY – More unemployment benefits were paid out over the last seven months than during the preceding decade, the Oklahoma Employment Security Commission reported recently.
The agency has paid out more than $3.36 billion in benefits since the coronavirus pandemic started in March, ledgers ref lect. In comparison, the OESC paid out “just under $3 billion” in unemployment benefits from 2010 to 2019, said Shelley Zumwalt, the agency’s executive director.
“We have paid out more in benefits since March 1 than was paid out in the entire decade preceding the pandemic,” she said.
This year the maximum state benefit for an unemployed worker is $539 and the minimum benefit is $16.
Payment of federal Lost Wages Assistance (LWA) benefits began on September 21. The benefit is $300 per week and extends for six weeks, for a total of $1,800.
Qualifying claimants must receive at least $100 in weekly unemployment benefits and must be unemployed because of COVID-19. LWA is expected to affect approximately 100,000 Oklahomans, Zumwalt said.
The $300 LWA benefit comes on the heels of the $600 in additional emergency federal benefits, which expired in July.
The decision to end the LWA program after six weeks “was made by the Department of Labor and the Federal Emergency Management Agency, not the states,” Zumwalt emphasized.
For Oklahomans who think they are eligible for the benefits but have not received them, OESC created a form for claimants to fill out to request the benefits. The form can be found at https://oesc. ok.gov/.
RATE HIKE SCHEDULED TO STRENGTHEN TRUST FUND
The Unemployment Insurance Trust Fund, from which jobless benefits are paid, held a balance of $628 million on October 8. In comparison, the trust fund balance on May 24 was $1.484 billion, the highest it had been in at least 22 years, an OESC spokesman said.
A $628 million balance in the UI trust fund “is not that low in a normal year,” Zumwalt said. “In years past the trust fund has paid out around $250 million annually.”
Oklahoma’s UI trust fund is underwritten with taxes collected from employers and was supplemented this year with infusions of federal stimulus aid. Approximately 90,000 employers “currently pay into the UI Trust Fund,” an OESC spokesperson said Friday.
Conditional Factor D will be imposed next year to reinvigorate the trust fund.
The Oklahoma Employment Security Act specifies four condition factors, A, B, C and D, all of which boost the balance in the unemployment trust fund. “A” is the least severe measure imposed on employers, while “D” is the most severe.
“This will be the 17th time” that Conditional Factor D has been imposed, Zumwalt said; the most recent period was 2011-14, an agency record indicates.
The increase in unemployment insurance rates “will vary employer to employer,” she said. The current rate schedule is .01% to 5.5%. The rate for 2021 will be .03% to 7.5%. “Nearly three-fourths of Oklahoma employers (72%) will see their rates come in at .03%,” Zumwalt said.
An employer’s unemployment tax is calculated as a percentage of payroll per employee, up to the annual taxable wage base ($18,700 in 2020).
JOBLESS CLAIMS CONTINUE DECLINE
First-time filings peaked at 93,885 initial claims for unemployment benefits registered during the week ending May 2, the OESC reported. Prior to the arrival of COVID-19 and the collapse in the energy industry, triggering massive job losses, no more than 2,000 first-time jobless claims were being filed.
For the week ending October 3, the unadjusted number of initial unemployment claims filed totaled 5,001, and the four-week “moving average” of initial claims was 5,322. The unadjusted number of continuing unemployment claims was 78,430, almost 19,500 fewer than the previous week’s revised level of almost 98,000.
“Seeing the claims numbers continue to drop for more than three months is a good indicator that we are on a solid path toward recovery in our state,” Zumwalt said.
“While the agency is still processing a record number of unemployment claims, we are thinking toward re-employment services and training for our claimants and how we can bring them opportunities so they can take the next steps toward finding a new position or career,” she said.
OESC UPDATING ANTIQUATED SYSTEM
The “extremely high” number of claims paid out has revealed “the gaps” in the OESC’s existing technology, “much of which was not made to keep up with this level of demand,” Zumwalt said.
“We strive to give claimants, employees, and the state a secure and seamless experience with our process updates,” she said. “That’s extremely difficult with our decades-old systems.”
The OESC’s antiquated mainframe dates from 1978, Zumwalt said. “It’s a system that you navigate by pushing F9 and F6. That’s the engine that runs the claims process for this agency.”
Consequently, the OESC has undertaken a digital transformation project that will entail replacement of software and hardware to enable the agency to operate more efficiently. “This is a complete business process transformation,” Zumwalt said. “It will virtually improve every aspect of the way the agency currently operates.”
The overhaul will cost $40 million to $45 million, she said. The expense will be financed from federal CARES legacy funding and from the OESC’s technology fund, she said. “No state funds nor UI Trust Fund dollars are being used on this project.”
The work will take an estimated 18 months to complete, and the agency predicts the system will be operational by the end of the first quarter in 2022.