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Georgia will pay more than $8 million in unemployment benefits to more than 4,000 seasonally jobless workers who were denied payments last year by the commissioner of labor, The Atlanta Journal-Constitution has learned.

Commissioner Mark Butler told the AJC Thursday the back payments are necessary after legislation to support his policy failed in the final hours of 2013 General Assembly, a complication that prompted a multi-million dollar threat from the U.S. Department of Labor.

The issue affects privately-employed public school and university workers such as bus drivers and cooks. Butler contends they should not be eligible for unemployment benefits during summer or holiday breaks, since teachers and other school system employees are not.

Not surprisingly, his new policy did not go over well with the affected workers, who are mostly low-wage.

"Thank you Jesus, thank you Jesus," said Joyce Hampton of Decatur, an Emory University cook and mother of five adopted children. She thinks she's due for $2,800 in lost wages from last summer.

"Many nights I put those kids to bed and the only thing they ate was ramen noodles. Sometimes I felt like, Lord, if I don't take care of these kids, I'll have to give them up. It was the worst summer of my life."

Employees who applied for and were denied the benefits could receive checks within a week, the department said. And those previously denied will be eligible for benefits from now on.

The money will come from the state's unemployment trust fund, which is fueled by business taxes. The state already owes the federal government more than $500 million for loans needed to keep the fund solvent.

Butler said it will cost state businesses and reward companies that don't deserve it. Instead of paying their employees year-round, the firms encourage workers to apply for unemployment, he said.

"These businesses are knowingly gaming the system and ripping off the rest of Georgia's employers to pay for their employees' vacation time," Butler said. "These workers deserve to be paid year-round just like their publicly employed counterparts."

Butler's agency adopted new rules in 2011 to deny unemployment benefits to employees of private companies who work in educational settings. The U.S. Department of Labor intervened in 2012 and said Georgia was not following state law. In the negotiations that followed, Butler agreed to change the law.

But legislation that would fix the problem died last week in the state House in the final hours of the 2013 session.

On Tuesday, Jane Oates, assistant secretary of the federal labor department, wrote Butler and said the state had 30 days to pay unemployment to those previously denied or the agency would withhold $18 million in federal grants used for unemployment and benefits for veterans, federal employees and Georgians who were shipped abroad, plus millions more in disaster assistance.

"In order for me to hold in abeyance a recommendation to the Acting Secretary that he commence conformity proceedings on this issue, your state must immediately conform to the requirements" of federal law, Oates wrote.

Labor unions, who championed the plight of the workers -- though most aren't unionized -- said Thursday's decision was poignant coming 45 years to the day that the Rev. Martin Luther King Jr. was assassinated while supporting striking sanitation workers in Memphis.

"It's a big victory for folks to get the benefits they deserve," said Roger Sikes, an organizer with Atlanta Jobs With Justice, a nonprofit advocating on behalf of workers' rights. "Through no fault of their own, they were denied unemployment benefits by Georgia's own labor commissioner."

Ben Speight, of Teamsters Local 728, helped organize the seasonal workers affected. He said thousands of others were discouraged from applying for the seasonal benefits last summer and won't share in the $8 million payout.

"It wouldn't surprise us at all if (4,000) is a lowball estimate," he said. "A lot of folks were frustrated and felt their efforts to appeal the decision were futile."

Butler believes labor unions convinced the federal government to interfere with a state issue. Many of the affected Georgia workers are members of the AFL-CIO.

"This is just another example of the unions having a lot of control over what the federal government does and does not do," Butler said.

Arizona, Michigan and Colorado recently changed laws to do what Butler attempted; New Jersey is in the process of doing so.

Butler said the legislation that would have corrected the problem passed the Senate overwhelmingly and was supported by the Georgia Association of Manufacturers, the National Federation of Independent Businesses, the Georgia Childcare Association and others. But the language, added to a House bill by the Senate, was ruled 'non-germane' and removed by Speaker David Ralston, R-Blue Ridge.

Butler said he will seek new legislation next year.

Hampton, 59, said Butler's reversal restores her faith in government, at least for now.

"We voted Butler in there and expected him to take better care of us than he did," said Hampton, adding she voted for the labor commissioner. "He is forgiven and I appreciate him doing the right thing."