Lame duck session includes changes to LIRC

As there is now some time to review what has been happening with the lame duck session, there are more and more changes to figure out. Some of these changes are at the Labor and Industry Review Commission and involve the three Commissioners there.

Prior to the lame duck session, Georgia Maxwell’s appointment expired in March 2019, Dave Falstad’s appointment expired in 2021, and Laurie McCallum’s appointment expired in 2023.

NOTE: Falstad was appointed in 2015. McCallum was appointed in 2011 and then again in 2017. Bill Jordahl was appointed in 2013 for a term expiring in 2019. When he left LIRC in 2017 (when Gov. Walker proposed eliminating the Commission) for the Public Service Commission, Maxwell replaced him.

But, Laurie McCallum has indicated she is retiring from the Commission in very early January 2019. So, Gov. Walker apparently proposed and the Senate approved on Dec. 4th to appoint Maxwell to fill the remainder of McCallum’s term:

Executive Appointment: Maxwell, Georgia – Georgia E. Maxwell, of Madison, as Commissioner of the Labor and Industry Review Commission, to serve for the term effective January 6, 2019 and ending March 1, 2023.

How can Maxwell be re-appointed to a new term when her current term has not expired and McCallum’s term has not yet expired? And, how can all of this occur in a legislative session that ends this year for service in 2019? Good questions. I do not know the answers.

For comparison to these shenanigans, here is Governor-elect Walker’s letter to then Gov. Doyle. In this letter, Walker asks that political appointees be prevented from returning to their civil service positions. That is, Walker was asking Doyle to stop state employees from exercising their civil service rights under state law to serve in their civil service jobs outside of political influence. Wow.

Note: there was no request from Walker to NOT make any political appointments, because there were none at issue back then. How times have changed. As Bruce Murphy indicates, Doyle essentially did what Walker wanted other than try to get year-late 2009-2011 collective bargaining agreements enacted.

So, Governor-elect Evers will get one appointment to the Commission in 2019. That appointment will require Senate approval, and that person will need to leave that position immediately should the Senate reject him or her under lame-duck SB884 (LRB 6071/1 and 6076/1), if that specific provision is not vetoed by Gov. Walker.

And so, the cautionary notes from Bruce Thompson deserve repeating:

For Vos and Fitzgerald [democracy] is not a consideration: their answer is to establish two sets of laws, one for Republican administrations, a different set for Democrats. They neither understand nor support the concept embodied in John Adams’ comment “For as in absolute governments the King is law, so in free countries the law ought to be king; and there ought to be no other.”

They also undermine democracy by assuring that the democratically elected government is a weak government, a government unable to fulfill its promises to the electorate. They are doing their utmost to turn the Evers administration into a Republican administration when it comes to policy, in effect trying to annul the election. They want to force Evers’ first term to duplicate Walker’s intended third term.

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USA Today article about work search difficulties

Paul Davidson of USA Today has a feature story about how record low job numbers are due in part to the hurdles states have enacted to get unemployment benefits.

The article describes how only around 60% of those eligible for unemployment benefits are applying, down from the 75% portion “during the last two economic expansions in the late 1990s and mid-2000s.” Such obstacles are a main reason why low unemployment rates have not led to an increase in wages for working folk.

Besides folks not receiving the unemployment benefits due them, the article notes, the perception of the nation’s economic health is also being distorted.

The upshot: The economy is in good shape, but not that good. The low share of laid-off workers seeking jobless benefits also raises concerns about the social safety net in coming years as the economy shows early signs of wobbling. The stock market has retreated from its October peak, oil prices have tumbled and General Motors announced about 14,000 layoffs last week. Many economists predict a recession in 2020.

In other words, during this economic boon(?), there is actually more unemployment not showing up in the economic measurements. And so, this unmeasured unemployment is leading to less unemployment benefits being paid out to folks and to downward pressure on wages.

Lame duck session

There is a lame duck session next week, the first week of December. The Wheeler Report has the bills that will be passed.

These bills are a mess. The Legislative Reference Bureau evidently has been responding to multiple demands and then rushed all those demands together into these bills. As a result, the same changes are included in multiple bills. For instance, the elimination of the solicitor general’s office is in both LRB 17-6074 and 17-6071. Many other changes are double-listed in these bills.

The media is focusing on the simpler changes to when the 2020 Supreme Court election will occur and changes to WEDC appointments.

Those are small potatoes to what is going on with these bills, however. These bills represent a massive expansion of legislative oversight alongside sharp limitations on executive discretion and authority through administrative agency action.

In this light, the changes in unemployment law are relatively minor. They are included in both LRB-6073 and LRB-6074. In these provisions, the legislature is moving current work search and job registration requirements from Department of Workforce Development administrative rules into statutory language. It seems the legislature wants to take ownership of these changes. So, the hated 8+4 week limits on work search waivers, the requirement to register at the job center of Wisconsin website, and the requirement to provide job search verification will now be statutorily required. It seems that the legislators behind these changes do not understand how most employees and employers in Wisconsin dislike and even hate these requirements.

NOTE: This legislation still allows the Department to modify the availability of work search waivers and establish additional work search waivers. See, e.g., section 37 of LRB-6073 and section 113 of LRB-6074. So, the transfer of these rules into statutory language seems pointless, confusing, and ambiguous. The scope of these possible waivers also seems questionable in light of the other changes discussed below.

In regards to the Department of Workforce Development, these bills (see LRB-6074) also sharply curtail Fast Forward funding for job training. Under Gov. Walker, Fast Forward funding was provided in a lump sum and parceled out by the Department to awardees as needed. The Legislature now both designates where these funds are to go (teacher grants are zeroed out, for instance) and overall funding is cut immediately by $7,345,900.

But, these changes are minor compared to the other administrative changes being proposed.

The legislature is greatly expanding its role in legal oversight of the state’s laws. Lawyers in the state as well as its courts need to know that when a party claims a statute is unconstitutional, that party will not only need to serve the state Attorney General but now also the Speaker, the senate president, and the senate majority leader (and all three will have a right to appear and make legal argument in the case). The solicitor generals who, as noted above, are losing their jobs with the Attorney General are probably getting new jobs with the legislature.

Deference to administrative agencies is also greatly limited. First, there will no longer be a presumption that an agency has followed rule-making procedures for a rule in dispute. See LRB-6074. So, agencies will now need to demonstrate compliance with rule-making requirements whenever those rules are challenged.

Second, the legislature is going further than the Wisconsin Supreme Court in Tetra Tech, 2018 WI 75. In that case, the court allowed some deference for agency experience, technical competence, and specialized knowledge. Now, there is simply no deference whatsoever, and it is illegal for an agency to assert otherwise. See section 126 of LRB 6074.

Third, the legislature will mandate that “guidance” documents must be submitted for review and public comment and that the agency must keep those documents available for public comment when used by the agency. “Guidance” documents are a new category of legal documents that contain information for how or why a state agency acts a certain way but which are not a “standard, requirement, or threshold that is not explicitly required or explicitly permitted by a statute or a rule that has been lawfully promulgated.” LRB 6074/1 at 99 (new Wis. Stat. § 227.112(6)). In other words, guidance documents are the kind of internal manuals and public pamphlets an agency has to guide its own operations and educate the public about what it is doing.

The Department’s disputed claims manual, for instance, provides guidance to Department adjudicators for how to resolve unemployment claims. It would seem that this new statutory language would require the Department to make this document public and even include it in every unemployment hearing.

An agency that proposes to rely on a guidance document to the detriment of a person in any proceeding shall afford the person an adequate opportunity to contest the legality or wisdom of a position taken in the guidance document.

LRB 6074/1 at 98 (new Wis. Stat. § 227.112(3)).

NOTE: Guidance documents can also be transformed into rules per new Wis. Stat. § 227.112(5) by any group or five or more individuals.

Finally, these “guidance” documents must be properly enacted as guidance documents within six months of passage of this new law. LRB 6074/1 at 99 (new Wis. Stat. § 227.112(7)). It is unclear whether already existing “guidance” documents will be grandfathered in or if documents concluded to be “guidance” documents after the six month deadline will be considered legal nullities in some way.

There is much more in these bills. But, these four changes to administrative law represent a far-reaching change in how state agencies operate and what the public can expect from them. As written, there will be litigation and then more litigation just to figure out what all of these changes mean.

For instance, with no deference and the ability of any person to contest the “legality or wisdom” of a guidance document, could every action of a state agency be subject to heightened scrutiny and challenge? It seems so.

Criminalizing unemployment benefits

The Department of Workforce Development has not only been extremely aggressive on charging claimants with concealment (aka fraud) for unintentional claim-filing mistakes, but it has also pushed criminal penalties for that concealment. I noted previously that the state’s Department of Justice has been only too eager to follow up with that criminal prosecution for those mistakes.

Since then, the state Justice Department hired Jake Westman specifically to prosecute these cases, and he has been busy. Here are his 2016 cases (11 filed that year), his 2017 cases (45 filed that year), and his 2018 cases (37 filed so far). Since he switched in October 2018 to a job at the Division of Hearings & Appeals, Shelly Rusch has taken over his case load. Here are her 2017 (1 case from Westman) and 2018 cases (11 switched from Westman so far).

All of these 93 cases charge claimants criminally with unemployment fraud. None so far have gone to trial, and almost all have ended with plea bargains. One case, 2018-CF-129, was dismissed on Ms. Rusch’s motion after a competency hearing.

Here is a breakdown of the claimants charged in these criminal cases based on race, gender, and initial address information available in these court records.

Westman and Rusch cases by race and gender

Here, we see that all 11 of the 2016 cases were against African-Americans living in Milwaukee. In 2017, African-Americans were defendants in 32 of 45 cases, or 71%. All of those cases were against Milwaukee residents. Of the remaining 13 cases in 2017, seven were against Caucasians, three against Latinos/as, and two against Native Americans. In 2018, the cases against African-Americans finally expanded beyond Milwaukee with 24 based there and four based in other cities. For 2018, African-Americans constitute 75.7% of the defendants (28 out of 37). The remaining nine cases consist of Caucasian defendants.

More Caucasian men are being criminally charged than Caucasian women (nine to seven). Among African-Americans, however, more women are being charged: 38 women to 34 men.

As noted here, the Department of Workforce Development considers concealment to be an unintentional claim-filing mistake. The Department claims otherwise, but the cases brought by the Department and appealed to the Labor and Industry Review Commission show that the Department presumes claimant’s mistakes are intentional and then places the burden of proof on claimants to demonstrate that their mistakes were accidental for some reason. Without knowledgeable help from someone who knows how complicated the unemployment claim-filing process has become or how aggressive the Department is on this issue and a Commission that insists on following unemployment law as written, it can be difficult for someone to explain his or her confusion and get a concealment charge overturned.

What makes this criminal prosecution of claimants for their mistakes even worse is that the Commission has NOT applied the strict liability for mistakes standard that the Department wanted with the 2016 changes in the definition of unemployment concealment. Section 18 of 2015 Wis. Act 334 left intact the requirement that unemployment concealment means “to intentionally mislead.” And so, the Commission has affirmed that unemployment concealment still requires a finding of intent. See Domingo Ramos, UI Hearings Nos. 16606402MW and 16606403MW (23 Feb. 2017) (applying new concealment definition, Commission finds that claimant’s job search mistakes were not intentional and so not concealment).

The Department of Workforce Development, however, has consistently ignored this requirement for unemployment concealment to be intentional and continues to charge concealment against claimants for their unintentional claim-filing mistakes.

And, now the Department of Workforce Development has been combining with the state Department of Justice to bring criminal charges against claimants for those same accidental mistakes. The plea bargains in many of these cases involve little more than paying back the alleged concealment penalties DWD first charged against these claimants in unemployment proceedings. In several, those monies have already been paid back, and so claimants are simply stuck with an additional $500 to $1000 in court costs as part of their plea bargain. In some other cases, it appears that the criminal case was nothing more than an additional mechanism with which to pursue collection against claimants for whom prior collection efforts had been unsuccessful.

That DWD and the state DOJ is targeting folks by race is obvious from this data. Here are the number of “fraud” cases by year:

2013 -- 14,682
2014 -- 13,034
2015 -- 9,793
2016 -- 8,438
2017 -- 5,132

From Addendum A of the 2017 Fraud Report at 11. So, of the thousands of fraud cases per year that DWD is pursuing, it is only bringing 30-50 criminal cases a year, and 70-80% of those criminal cases are against African-Americans. This result simply stinks to high heaven.

But for a new governor who may or may not think of unemployment in the same way as his predecessor, things would be getting even more dire. Rep. Kerkman managed to get criminal penalties for unemployment substantially increased via 2017 Wis. Act 147. As detailed in the Legislative Council memo, fines are substantially increased (usually now up to $10,000 or more) and prison time is increased substantially as well (now from nine months to ten years) depending on the amount of “concealment” at issue.

The current practices of DWD are making unemployment not only impossible to receive but damn near dangerous. Something needs to change in 2019.

Drug testing is making a comeback

Brand new proposed regulations are now available. Here is the initial reaction from NELP:

Washington, D.C. — Following is a statement from Christine Owens, Executive Director, National Employment Law Project:

“Today, the Trump Department of Labor (DOL) released a proposed rule giving states fairly broad authority to conduct mandatory drug testing of unemployment benefit claimants and recipients. The proposal not only suffers from a number of fatal legal flaws, but more to the point, drug testing of UI applicants–when there is no basis for suspicion–is a gross insult to unemployed Americans everywhere, and a costly solution in search of a non-existent problem. Clearly, this proposal is designed to stigmatize use of an important layer of our social safety net.

“As part of a bipartisan compromise to pass the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRA), Congress agreed to allow states to conduct drug testing of unemployment insurance claimants under two exceedingly narrow circumstances: if a worker was discharged for use of controlled substances, or when a worker is only available for work in professions that regularly conduct drug testing. The Obama Department of Labor crafted a regulation that closely adhered to the statutory language, but upset with the bargain it struck, Congress then used the Congressional Review Act to repeal this regulation, arguing that in spite of the very narrow language in the MCTRA, states should be allowed to drug test in broader circumstances.

“State-mandated drug testing may well violate the Fourth Amendment’s prohibition of unreasonable searches and seizures. The mere act of applying for a government program does not provide grounds to reasonably suspect a person of drug use. Indeed, when states such as Michigan and Florida tried to impose mandatory suspicion-less drug testing on all TANF applicants and recipients, federal courts intervened to stop them, finding such testing unconstitutional.

“In addition, when Congress passed the MCTRA, it not only articulated very narrow circumstances under which drug testing could be conducted, but it delegated to DOL the authority to define which occupations were covered under the law. The Trump DOL has instead essentially granted states broad authority to determine which occupations regularly conduct drug testing beyond that which is required by law, a delegation of authority not authorized by the MCTRA.

“As the proposed regulation acknowledges, the expense of such drug testing is considerable, while states’ funding to run their UI programs is at a historic low. Expanding drug testing would drain critical resources from programs that are already strapped for funds. In 2015, for example, states spent more than $850,000 on testing TANF applicants, and 321 people tested positive–a cost of approximately $2,650 per positive test. Indeed, all testing regimes yield positive results at rates substantially below the Centers for Disease Control’s estimate of 8.5 percent drug-use rate in the general population.

“Finally, this misguided proposal represents a not-so-subtle attack on the character of unemployed Americans. This intrusion into the privacy of Americans who just happen to be unlucky enough to lose their job seems rooted in a blanket assumption that unemployed workers are to blame. Drug testing is simply a lazy way of blaming the victims of larger economic trends or corporate practices such as downsizing, outsourcing, and offshoring.

“Unemployment insurance is an important economic tool to help workers, their families, and their communities deal with involuntary job loss. And NELP will lead the fight to stop this expensive, illegal, ill-conceived effort to erode this safety net.”

As noted in this newly proposed rule, Wisconsin, Texas, and Mississippi are the only states that have passed drug-testing laws for unemployment claimants that seek to implement drug-testing of some kind. The proposed rule also “claims” that drug testing will have minimal costs. Really?

If this new proposal survives court challenges, expect Wisconsin to expand drug-testing for any job sector for which the state thinks drug-testing is important in some way. I fully expect Gov. Walker to expand testing to include school employees whenever they apply for unemployment benefits. Indeed, I would not be surprised if Gov. Walker determined that every unemployment claimant should be drug-tested. After all, such tests would simply be one more obstacle claimants would have to jump through as part of the initial claim-filing process.

Disaster unemployment assistance available here in Wisconsin

Wisconsin now has disaster unemployment assistance available to folks who have lost work because of the recent flooding and rains. For residents of Crawford, Dane, Juneau, La Crosse, Monroe, Richland, Sauk, and Vernon counties, the deadline for applying for such assistance is 23 November 2018. And, such assistance is available to self-employed folks as well.

DUA in Wisconsin

Be careful, however. The Department of Workforce Development will charge you with criminal fraud for any claim-filing mistakes you make, no matter how unintentional those mistakes might be.

As I have indicated repeatedly (here, here, and here, for instance), filing an unemployment claim today is a BIG risk because of the Department’s zealousness for charging fraud when making non-intentional claim-filing mistakes.

The fact that the Department features three publications (and only these three) that generally (the claimant’s handbook) or only warn against claimant fraud (DUA rights and responsibilities and Notice to all DUA applicants) reinforces this warning. These documents represent the Department’s way of explaining to you that the Department will hold you strictly liable for your claim-filing mistakes.

In other words, do NOT file a claim for unemployment benefits unless you absolutely have to. And even then, double-check everything you write down and take notes of everything you do and of every interaction you have with the Department.

Federal drug testing is trying for a comeback

The current administration is trying to bring back drug testing. As of Oct. 24th, the Office of Management and Budget has approved new, proposed regulations:

new drug testing regs

As indicated here, these proposed regulations are strangely NOT economically significant, do NOT affect small entities, and have NO federalism impacts (i.e., state sovereignty remains intact). The whole point of drug testing the unemployed was to reduce the “terrible” effects of drug use on workplace productivity and safety, that this federal drug testing requirement would empower small businesses to take up this testing and thereby get a drug-free workforce at much lower costs, and that the regulation would allow states the “freedom” to implement specific drug-testing requirements. Essentially, this conclusion of NO effect on these issues is proclaiming that drug-testing the unemployed is of no importance, financially or otherwise.

The new, proposed regulations should appear in the Federal Register in the next few weeks. Only then will we know what the substance of these new requirements are.

As I noted previously here and here, there are serious problems with any new drug testing regulations given how Congress nixed the prior regulations via the Congressional Review Act. Under that law, new regulations are verboten if they are in “substantially the same form” as the disapproved regulations unless they are specifically authorized by a subsequent federal law.

In other words, these new, proposed regulations MUST be substantially different from the prior drug-testing regulations, as Congress has passed no law authorizing new regulations.