Reforming unemployment

With all the problems being described with unemployment here, there are also many efforts at reforming the unemployment system — especially of late — as the problems access and timely payments have become so obvious even John Oliver of Last Week Tonight can see them.

A major report (over 100 pp.) for Reforming Unemployment Insurance is now available. A press release is also available.

This report describes how unemployment is supposed to work, why national or universal standards for unemployment benefits are needed, how the financing of unemployment benefits needs to be stabilized and broadened, how numerous sectors of the economy have been artificially excluded from unemployment benefits and why those workers should now be included, why the duration of benefits cannot and should not be curtailed with artificial constraints that have nothing to do with current economic conditions, and why benefit levels needed to be increased and expanded.

Missing to some extent from this report, unfortunately, is a problem that is featured throughout this website, namely how recent legal and administrative restrictions on eligibility undercut the purpose of unemployment benefits. Handbooks that do NOT explain the questions and issues asked of claimants, the inability to even see the questions being asked before filing a claim, and questions that mis-state or obscure actual state unemployment law are just a few examples.

There is also another effort at improving unemployment through a playbook of reforms. This effort is not so much concerned with substantial changes to the scope and scale of unemployment benefits as to how states like Wisconsin administer the unemployment benefit program. The goal here is create a customer-centric focus that seeks to balance the needs of a state agency for efficient and reliable claims-processing with claimants’ needs for understandable and easy-to-use and to-navigate systems. As explained here: “The technology itself is nowhere near as relevant as the surrounding goals, metrics, policies, and processes.”

Finally, PUA benefits were introduced during the pandemic because far too many workers have been classified as gig workers for whom regular unemployment benefits are no longer available. A major support group for these workers and for PUA benefits has emerged at ExtendPUA.org.

With PUA benefits slated to expire on 4 Sept. 2021, I expect this group to become a focal point for expanding regular unemployment to cover the workers for whom PUA benefits were intended. The need for these kind of job loss support is essential for a vibrant and stable national economy. As Nicole Marquez of NELP explains:

Widespread reliance on pandemic unemployment programs should be seen as an economic success in a time of great need: our government is providing people the help they need to keep a roof over their families’ heads until they can get back on their feet. In fact, the biggest hindrance to economic recovery is not unemployment; it’s a shortage of good jobs that value the dignity of workers, pay a livable wage, and provide safe workplace conditions, together with inadequate work supports such as child care and elder care.

* * *

This is the moment for our movement to be heard. State and federal governments need to make sweeping fixes to our unemployment systems, not undermine them further. Grassroots organizations like Unemployed Workers United, Unemployed Action, and Step Up Louisiana are demanding change. Unemployed people and their allies are organizing and advocating for necessary reforms that will transform the system so that we’ll all have the support we need in the next crisis, without leaving anyone behind.

Given how Wisconsin excludes 150,000+ SSDI recipients from receiving regular unemployment benefits and that specific action was needed for SSDI recipients to qualify for PUA benefits, this kind of reform is essential.

Unemployment delays, part 8

The Department’s own claim-filing mistakes

Note: Previous posts detailed the length of time and number of cases in the unemployment backlog in part 1, some of the mistakes by the Department that allow cases to be re-opened in part 2, a place for stories and advice about how to find assistance in part 3, how most claims in Wisconsin — and unlike in other states — are being denied and thereby creating a ginormous backlog in hearings in part 4, in part 5 how the Department’s big push to fix the backlog in December 2020 was creating a hearings backlog and not addressing the root causes of all the delays, in part 6 how a December 2020 push had cleared some of the back log with issuing initial determinations but that the hearings backlog was growing because most claims were being denied and that claimants were losing most of their hearings, and how the phone support system still fails to operate effectively a year later in part 7.

Before their investigative reporter moves on to another job in another state, Wisconsin Watch has a detailed news story describing various delays and problems claimants are experiencing with their unemployment claims.

The focus of the piece is how efforts to end federal supplement unemployment benefits — the $300 additional PUC payment, the extension of regular unemployment eligibility through PEUC benefits, and the availability of PUA benefits for those not eligible for regular unemployment benefits — are misguided and counter-factual.

Before that story is discussed, however, the current context of what is happening with the state’s economy needs to be described. As usual, Jake has the lowdown on the June 2021 jobs numbers, which reveal that the federal unemployment benefits are NOT discouraging work at all.

if you dig further into the jobs figures, we see the gains were pretty widespread, and show that WMC/GOP memes about “lazy workers not wanting jobs” continue not to hold water.

That’s especially the case when you realize that most of those sectors had their job gains deflated due to seasonal adjustments, which count on a certain amount of people joining the work force and getting hired in June. But we went well above that amount in June 2021.

Wisconsin June 2021
Total jobs
Seasonally-adjusted +10,700
Non-seasonally adjusted +44,700

Private jobs
Seasonally-adjusted +8,400
Non-seasonally adjusted +54,000

Labor Force
Seasonally-adjusted +10,000
Non-seasonally adjusted +69,800

Employed
Seasonally-adjusted +8,700
Non-seasonally adjusted +50,200

Even the sectors that “lost” jobs on a seasonally adjusted basis in Wisconsin were adding workers in reality. This includes construction (+8,100 NSA), manufacturing of non-durable goods (+2,000 NSA), health care and social assistance (+2,400 NSA), and arts/entertainment/recreation (+4,400 NSA).

Economics data as reported by Menzie Chin backs up what Jake is finding. For Chin: “This measure indicates that Wisconsin economic activity growth peaked the week ending May 1st and is still at an extraordinarily high rate in the week ending June 26th.” Economic activity at an extraordinarily high rate, indeed.

But, this economic boom has been incredibly uneven and has yet to lead to the kind of hiring boom last seen in the late 1990s, when companies were willing to hire and train new employees. Today, an older worker who lost her steady job when the pandemic started cannot now find employment and jobs suitable to her physical constraints:

entering her criteria into work search only returns listings for jobs she can’t perform, including physically demanding warehouse and delivery work and positions for nurses or other professions that require licenses that she lacks.

And, the problems with how the Department responded to the pandemic and delayed claims-processing or made mistakes with those claims have had disastrous consequences for those who lost work and needed immediate unemployment assistance.

As the Department of Workforce Development struggled to process claims last year, Miller waited 11 weeks for her first unemployment check. That forced her to spend down her savings and tap into Social Security five years before she preferred — permanently reducing her monthly payment from the federal retirement program.

Likewise, another claimant saw his benefits halted when he followed mistaken advice about reporting self-employment (see the unemployment primer — search for self-employment — for what and why you need to report self-employment).

David’s work search challenge: He can’t find a job matching his education and experience. So David started a business from his garage that makes cutting boards and other light wood products.

He does not expect to profit for at least a year, so he called DWD early to ensure that launching a business would not jeopardize his unemployment compensation. DWD told him that checking the “self-employed” box on his claim and answering a few questions should suffice, he recalled.

But following those directions instantly froze David’s unemployment benefits. After David peppered DWD with calls, he said, someone finally advised him to stop checking the “self-employed” box since he wasn’t making money. It had automatically triggered a review of his claim.

“There were no instructions on the website and they never (previously) told me anything like this,” David said.

Still another claimant simply had to wait and wait until the Department properly processes his claim and then his unemployment benefits payment.

Unlike most states, Wisconsin bars workers on federal disability from collecting regular unemployment aid, and DWD initially extended that ban to Pandemic Unemployment Assistance before reversing course last summer. Baukin has spent a year seeking that compensation.

In May 2021, a state administrative judge finally ruled in his favor, but Baukin says it took over a month to see the aid; he was told that DWD had not loaded the judge’s notes into its antiquated computer system, prolonging the wait. Out of frustration, he stopped checking his online portal with the department, so it took two weeks to realize he’d been paid.

“(DWD) should have sensitivity training that should be mandated — so they know how to service and assist someone with a cognitive disability,” Baukin said.

Another claimant is also waiting to be paid benefits that should have been issued months ago.

His federal disability status torpedoed his regular claim, and he lost out on PUA after being told that he failed to submit his pay stubs fast enough. He is appealing that decision but sold his two trucks to pay bills as he waited. The 1998 Chevy Tahoe and 2002 Dodge Ram pickup — “a beater with a heater” — netted about $800 together.

Unfortunately, he is still waiting for his unemployment hearing.

These stories reveal the crux of the current problems with unemployment claims in Wisconsin: while claimants pay the price for processing delays, there are no consequences to the Department for making claim-filing mistakes.

A recent case that came my way exemplifies this problem. The claimant, a road construction worker, is employed seasonally, since road construction cannot occur during the winter months when the ground is frozen. So, last December (indeed, the last week of December) 2020, he was laid off and filed a claim for unemployment benefits. Then nothing happened. Not until March 2021 was an initial determination issued, denying his December 2020 initial claim because of an alleged quit that occurred in September 2019 when working for a prior employer. Huh?

Even more confusing, the determination itself states that there is no factual basis for this decision:

The employee was contacted and stated that he is currently still employed with the employer. The employer was contacted but failed to respond. Decision was based on available information.

As stated here, the available information was that he was employed. But, the Department concluded for unknown reasons that he was unemployed in September 2019 and that this separation (without explanation) meant he could not collect unemployment benefits in 2021, two years later.

Note: Because this disqualification predates the unemployment claim by more than two years, it showcases how ancient issues can still lead to a disqualification. The claimant’s current benefit year is from 01/03/2021 thru 01/01/2022, and so his previous benefit year was likely from 1/1/2020 thru 1/2/2021. Accordingly, his base period for his earnings for his previous benefit year likely consists of his 2019 earnings. So, this made-up benefit year separation can still matter for an unemployment claim filed two years later. For more information on benefit years and monetary eligibility, see the discussion of monetary eligibility in the unemployment primer.

Not until last week — July 13th — was there a hearing, and both employer and employee testified that the employee was working in September 2019 and that there was no job separation whatsoever. So, the administrative law judge issued a decision a few days later reversing the initial determination, finding that the claimant is not disqualified. Still, given current processing backlogs, this employee will probably not see his unemployment benefits until September 2021, nine months after he first filed his unemployment and five months after he went back to work.

Claimants who contact me keep thinking they have done something wrong. They likely have not done anything wrong, I tell them. Being confused and not understanding an incredibly complicated and opaque claim-filing process is not a mistake at all. And, being the victim of an inane denial is certainly not the fault of any claimant.

People are still struggling with unemployment benefits because the state agency is not processing claims correctly. Things could be different. There could be directions about how to use the portal, guidance about how to file an unemployment claim (like what Massachusetts offers), or a handbook that details both the claim-filing questions asked of claimants and how those questions should be answered (what Connecticut offers). Instead, Wisconsin hides basic information and offers no instructions to claimants. So, neither staff nor claimants understand what exactly is going on. That is the basic reality right now.

Unemployment delays, part 7

Phone calls to unemployment one year later

Note: Previous posts detailed the length of time and number of cases in the unemployment backlog in part 1, some of the mistakes by the Department that allow cases to be re-opened in part 2, a place for stories and advice about how to find assistance in part 3, how most claims in Wisconsin — and unlike in other states — are being denied and thereby creating a ginormous backlog in hearings in part 4, in part 5 how the Department’s big push to fix the backlog in December 2020 was creating a hearings backlog and not addressing the root causes of all the delays, and in part 6 how a December 2020 push had cleared some of the back log with issuing initial determinations but that the hearings backlog was growing because most claims were being denied and that claimants were losing most of their hearings.

A year ago, the unemployment phone support system melted down in the face of thousands of claimants who were looking for answers to all of their unemployment-related questions.

The story today is not much better. One year later, the unemployment system remains designed to not actually work and claimants cannot actually get answers to their questions.

Yesterday, I decided to follow up on a specific issue: the status of an objection letter I filed on behalf of a client’s PUA weekly benefit calculation. The issue is that his weekly benefit rate is based on four quarters of income in which he was not working that much. An alternate base period that includes income from the first quarter of 2020 would substantially raise his weekly benefit rate, from $189 to probably over $300 per week. In light of Wisconsin’s partial wage formula, that higher weekly benefit rate would mean he would have many more works despite part-time work in which he would qualify for some unemployment benefits and hence also the additional PUC and LWA payments made available during the pandemic.

So, yesterday on July 8th, I started calling. I first called the number on the back of the initial determination.

Objection contact info

Note: For the first round of phone calls to the regular help line (calls one thru four), I was on hold each time from 5 to 10 minutes. For the second round of calls to the PUA help line (calls five thru seven), I was on hold each time from 15 to 25 minutes.

In each call, I first identified myself as a representative of my client calling on his behalf about the status of an objection to an initial determination for which I had the number. I identified the client by name and provided his social security number. If I had the opportunity, I also indicated that an information release was on file (besides previous copies, I filed an information release with my May 25th objection letter).

First call

I dialed 414-435-7069. After identifying myself and the client by social security number, I was placed on hold and transferred back to the general waiting queue.

Second call

After identifying myself and the client by social security number, I was disconnected.

Third call

I dialed 414-435-7069. After identifying myself and the client by social security number, the support staffer asked if I was his attorney. I answered yes. She said she could help me but would need to place me on hold for a second. I was then placed on hold and transferred back to the general waiting queue.

Fourth call

After identifying myself and the client by social security number, the staffer looked up and found the information release that was on file. But, she said, she still needed to verify my identity. After being on hold so that she could talk to a mentor or supervisor, she returned and smartly queried me about various facts from the case documents that only I would know from representing my client (rather than just general information that could be gleaned from the Internet, like address and birthday information). After my own identity was verified, she said she would put a note in the file indicating that I was a legitimate representative of my client when discussing his case.

Note: This verification issue is only a one-way requirement. Department staffers occasionally contact me about my clients’ cases to discuss issues related to those cases. None of this verification is needed then. So, a call to my number is presumed to get me, but a call from my phone number to the Department needs to be verified.

The staffer then explained that the initial determination involved PUA benefits and so I had to call the PUA support line at 608-318-7100. Because she had no access to PUA records, there was nothing she could do.

I explained that the number on the form is NOT the PUA 608 support number but the general 414 number, so that is why I had called the 414 number. I asked, since I only needed information about the status of the objection, if the staffer could look up the initial determination to see if there were any notes or updates concerning it. She did so, and found that a staffer had phoned my client on May 27th (two days after I filed my objection) and left a message asking him to file weekly certifications for weeks in March 2020.

I explained that such a request made no sense (and would defeat the whole purpose of the objection) since he was still being paid by his previous employer for those weeks and that his pandemic job loss did not start until after the week ending 4/18/2020, as stated in my objection letter. The staffer said she would make a note of that issue as well, and I said I would try the 608 number to get additional information concerning this PUA issue.

Fifth call

I dialed 608-318-7100. After identifying myself and the client by social security number, I was disconnected.

Sixth call

I dialed 608-318-7100. After identifying myself and the client by social security number, the staffer refused to look up the information release in the system or the note that had been entered into the system concerning me for this particular claimant. Instead, the staffer insisted I provide all the claimant’s details. When I could not provide my client’s birth date (since I did not have that info on hand), the staffer refused to do anything related to the claimant.

Note: The news about numerous unemployment fraud scams is because hacking rings are using credit data stolen from credit reporting agencies Experian and Equifax to spoof claimant identities. The information available to these hacker gangsters includes social security numbers, birth dates, drivers’ license numbers, address info, and all other financial information that credit reporting agencies have. Wisconsin has seen a fair number of fraudulent unemployment claims using this stolen data, but the amounts in question pale in comparison to what has happened in other states with easier claim-filing systems. Still, in light of the stolen information, anything on those reports should NOT be relied on to verify a person’s identity.

Seventh call

I dialed 608-318-7100. After identifying myself and the client by social security number, the staffer found the note created by the staffer from the fourth call. This new staffer then went to look up the initial determination for which I had filed an objection. Unfortunately, her network connection was too slow. After waiting several minutes, she said she would put me on hold while she waited for the document to load. The hold, however, led to the phone call being disconnected.

Conclusions

So, seven calls on July 8th over nearly an hour and half did NOT get me the information I needed — the status of the objection I filed on May 25th of 2021. And, basic rights claimants have to a representative during these phone calls and these inquiries is being ignored.

After each hang up, no staffer called me back to continue the conversation.

And, the actual number listed on the form to call was NOT the actual number I should call. Really? How can something like that still be happening?

Finally, keep in mind that I know what I am doing, that I speak the unemployment lingo, and I can call out ambiguities in the advice right away (like the request to file weekly certifications described above). My clients tell me of phone conversations that go no where, of information being told them that actually makes no sense at all in light of what is happening with their claim, or information that is downright misleading.

One client just told me that her claim is being denied because she refused to return a phone call from an adjudicator. But, no new initial determination denying her claim has been issued. And, the client returned the phone call and left a message (the only thing you can do when calling an adjudicator) explaining that the adjudicator should call me. I too left a message with that adjudicator to call me. There was no return phone call from the adjudicator.

What probably has actually happened is that the “investigation” is on hold, as the adjudicator turned to other cases on his or her docket. The reason for this “investigation” is unknown, however.

Note: This client partially won a 30 March 2021 appeal tribunal decision concerning her employer closing because of the pandemic. But, the administrative law judge failed to apply UIPL No. 16-20 Change 5 (25 Feb. 2021) for when the claimant partially returned to work when the employer re-opened, see New PUA benefit options (30 April 2021), so a petition for Commission review was filed after a reconsideration letter to the administrative law judge was ignored. Despite the partial win, this claimant has yet to be paid any PUA benefits.

I understand that staffers are trying their best. The sub-dividing of tasks and responsibilities and the hiring of third-party companies means that these staffers have limited windows within which to view the claims and even less of an ability to fix problems. So, the problems I encountered yesterday (outside of the staffers hanging up on me) are not tied to how any one staffer is doing his or her job. Rather, the problems are because of how the support system is designed to keep staffers in boxes that limit what they can do and what they can see.

Note: In this light, the staffer on the fourth call should be commended for doing her job both correctly, smartly, and with compassion. She even noted that problem with the wrong phone number on the form and lamented that there was nothing she could do but was happy if I could communicate the problem to folks who actually could address the issue.

That design needs to change. Far too many claimants are still struggling with basic eligibility issues that are now a year or more old because they still cannot get straight answers from the Department.

The DWD/unemployment budget, Round 2

Tax breaks for employers

I previously described how the Joint Finance Committee ignored reality and state unemployment law — particularly the state’s partial wage formula that encourages people to work part-time while STILL being eligible for and collecting unemployment benefits — to make false claims about unemployment benefits keeping people from working.

This effort is being done in the name of stigmatizing unemployment benefits. This push to end the pandemic relief programs early is still utter nonsense.

What is lost in this hubbub is the essential nature of unemployment benefits in the first place. Unemployment is an insurance system. Just like car insurance is there when there is an car accident, unemployment is supposed to be there when there is a job loss. Period. Under Wisconsin unemployment law, eligibility is presumed (at least that is what is supposed to happen).

We need to start thinking that unemployment is what it is — insurance — that must be paid out immediately whenever there is a no-fault job loss. As Wisconsin law explains:

Whether or not a given employing unit can provide steadier work and wages for its own employees, it can reasonably be required to build up a limited reserve for unemployment, out of which benefits shall be paid to its eligible unemployed workers, as a matter of right, based on their respective wages and lengths of service.

Wis. Stat. § 108.01(1) (emphasis supplied).

Despite how unemployment is designed to assist claimants and tax employers for those benefits based on each employer’s specific job loss experience, it seems the only action at reform for the moment is to help employers out.

At the June 17th meeting of the Unemployment Insurance Advisory Council, the Department introduced an emergency rule to finally get pandemic-related experience waiver right, at least on a temporary basis. Unlike in other states where any and all 2020 job losses were presumed to be pandemic-related and so not chargeable to employers, Wisconsin at first presumed all job losses were NOT pandemic-related unless an employer provided specific evidence and a form about the pandemic-nature of that job loss. Furthermore, the period for this pandemic-related waiver originally expired on 16 May 2020.

Then, after further orders and passage of 2021 Wis. Act 4, the time period for possible waiver of initial claims on employer experience-rating was extended to those claims filed before 13 March 2021. But, in general forms and reasons still need to be submitted by employers to take advantage of having any unemployment claims against their UI tax account waived because of the pandemic.

With this new rule, the Department is finally waking up to the idea that an automatic, blanket waiver for employer pandemic-related charges is more efficient and easier to administer than a case-by-case, employer-by-employer waiver application (something other states realized back in March and April of 2020). Now, more than a year after the pandemic started and several prior emergency rules:

This rule provides that the Department, in calculating an employer’s net reserve as of the June 30, 2021 computation date, shall disregard all benefit charges and benefit adjustments for the period of March 15, 2020 through March 13, 2021.

New rule at 2 (emphasis supplied). But, the Department is NOT actually forgiving these pandemic job losses on a permanent basis in light of a pandemic for which employers had no control of ability to affect. Unlike other states that sought to make the administrative burden for employers and employees easier in face of the pandemic and the ensuing massive job losses, Wisconsin is still only delaying this experience-rating. Individual and employer-based charging based on job losses in 2020 will be implemented for 2023.

The Department will, in effect, assume that all benefit charges and adjustments were related to the public health emergency declared by Executive Order 72. This assumption applies only for the purposes of setting the contribution rates for 2022. This rule will ensure that employers’ contribution rates for 2022 are calculated based on reserve fund balances as of June 30, 2021 without taking charges related to the public health emergency into account so that the policy goals of 2019 Wisconsin Act 185 and 2021 Wisconsin Act 4 are met. This rule will only affect calculation of contribution rates for 2022. Contribution rates for 2023 will be calculated in 2022 after all recharging is complete.

New rule at 3. In short, this new rule is only a delaying action for a massive administrative headache for everyone.

Note: Reimbursable employers are not being forgotten either. The Department also announced at the June 17th meeting that it was going to ask for an additional extension of the charging waiver for reimbursable employers.

Not to be outdone when thinking of employers, the Joint Finance Committee has also stepped into this game with a $60 million per year transfer from general tax revenue to the unemployment trust fund for the next two years. See item 9 of Motion 2001 that was approved on June 17th and LRB-4069, scheduled for public hearing on June 23rd. The goal here is to keep the tax rate for employers at Schedule D — the lowest unemployment tax rate schedule — for these next two years.

This concern for employer tax rates when an economic recovery is underway is economically idiotic. As of December 2020, Wisconsin had one of the higher trust fund balances in the nation. See also the table in State Unemployment Insurance Trust Fund Solvency Report 2021, US Dep’t of Labor, Office of Unemployment Insurance, Division of Fiscal and Actuarial Services (March 2021) at 59. Wisconsin continues to pay out unemployment benefits at much lower than expected levels, yet the concern continues to be on keeping unemployment taxes at their already lowest levels.

Note: this employer tax proposal is occurring because Republicans are proclaiming employers are still hurting and cannot afford any increase in unemployment taxes at the same time these same Republicans are proclaiming an economic recovery is being held back because “jobless workers” are refusing to go back to work and make the recovery even better. In other words, the economic picture radically changes according to the policy goal being pushed.

As I said in January 2021, maintaining a positive balance in the trust fund during times of massive job loss is economic waste. Governments need to spend money during times of recession and then raise taxes during times of economic recovery (which seems to be now and next year).

$1.1 billion is the amount available in the unemployment trust fund at the end of December 2020. $1.1 billion that is not helping anyone but just sitting in a bank account.

Wis. Stat. § 108.01(1) (emphasis supplied) provides:

Unemployment in Wisconsin is recognized as an urgent public problem, gravely affecting the health, morals and welfare of the people of this state. The burdens resulting from irregular employment and reduced annual earnings fall directly on the unemployed worker and his or her family. The decreased and irregular purchasing power of wage earners in turn vitally affects the livelihood of farmers, merchants and manufacturers, results in a decreased demand for their products, and thus tends partially to paralyze the economic life of the entire state. In good times and in bad times unemployment is a heavy social cost, directly affecting many thousands of wage earners. Each employing unit in Wisconsin should pay at least a part of this social cost, connected with its own irregular operations, by financing benefits for its own unemployed workers. Each employer’s contribution rate should vary in accordance with its own unemployment costs, as shown by experience under this chapter.

So, money to pay rent and groceries, to dine out in restaurants, just to spend on consumer goods — WHEN there is a state-wide lack of consumer spending because of a worldwide pandemic — is not going out to the unemployed workers in this state who need it.

That statement is still true today. Sigh.

The summer 2021 unemployment situation

Several folks have forwarded to me different articles that describe the current unemployment situation.

An article in Dissent establishes that the current attack on pandemic unemployment programs is mostly just another kind of attack on working folk.

Across the country, workers have used the health and safety concerns posed by the pandemic and the enhanced unemployment insurance provided by the CARES Act to renegotiate the basic social contract that governs the American workplace. As social-distancing restrictions end and employers look to meet customer demand, pandemic unemployment benefits—which increase the amount in weekly income and the length of time that workers can claim it—have empowered working people across the economy.

Nationally, wages at the bottom of the labor market experienced a huge jump in April 2020 and continued to rise. Average hourly earnings in retail are up a dollar since May 2020, and over $1.50 since before the pandemic. In education, hourly earnings are up ninety cents since May 2020. As one indication of confidence in individual bargaining, workers are quitting at a historically high rate. Four million workers, nearly 3 percent of the labor force, voluntarily left employment in April. Workers who quit are not eligible for unemployment insurance: they are changing jobs to look for better pay and treatment.

The Biden administration has professed a commitment to creating a bargaining environment more favorable to workers. “It is the policy of my Administration to encourage worker organizing and collective bargaining,” the president wrote in his April Executive Order on Worker Organizing and Empowerment, which established a cabinet-level task force to promote those goals. The purpose of the order is to determine how the administration can begin to reverse the decline in union membership, to which the White House attributes “serious societal and economic problems in our country,” including “widespread and deep economic inequality, stagnant real wages, and the shrinking of America’s middle class.”

These goals are running aground in the face of a now ubiquitous talking point: according to the nation’s business press and cable news channels, a “labor shortage” created by workers’ increased bargaining power is holding back growth of the post-pandemic economy.

In Wisconsin, wages have not actually increased all that much during the pandemic, especially in sectors where pandemic job losses were greatest — hospitality and leisure — where a huge jobs hole has been created: “More than half of the private sector jobs lost in Wisconsin in 2020 were in the Leisure and Hospitality Sector, over 60,000 in all, which left us with nearly 22% fewer Leisure and Hospitality jobs than there were in December 2019. “

On the other hand, jake reports, “one sizable industry was nearly back to even in Wisconsin by the end of the year, and both managerial and manufacturing jobs lost a lower rate of jobs than the statewide level of 4.8%.”

Job change, Dec 2019-Dec 2020, Wisconsin
Construction -0.02% (-32 jobs)
Financial Activities -1.0% (-1,539)
Prof./Business Services -2.5% (-8,030)
Manufacturing -4.0% (-19,311)

And, Jake explains, many people are actually not receiving unemployment at all but moving on to “better” jobs on their own.

It’s pretty obvious what is happening here. Many people who lost their jobs as COVID broke out had to settle for other work, and I have to think that they and a lot of others have questioned the point of settling for menial jobs that don’t pay much, and put them in contact with large amounts of people that may not be vaccinated against a virus that has killed nearly 600,000 Americans.

So when they get a chance to move on for something that is safer and/or pays better and treats them better, they’re taking it. It just hurts the fee-fees of greedy, mediocre business owners that people are taking what they have (don’t) have to offer.

Jake’s look at the 2020 economic numbers reveals that Wisconsin has actually lagged the rest of the nation:

I also wanted to give you a look at how Wisconsin shaped up compared to the rest of the US in personal income. This number went up across the board in the US despite the COVID recession because of thousands of dollars in stimulus payments, enhanced unemployment benefits, and PPP bailouts. But Wisconsin didn’t have nearly the boost that most places had, with our income growth of 4.4% putting us down at 46th in the country.

We trailed in all three areas, particularly in those transfer receipts, which may reflect that we had fewer people collecting those higher unemployment benefits, stimulus checks and PPP funds. But we also trailed in earnings (Wis down 0.3%, US was up 0.3%), and lagging in wage and earnings growth has continued to be a worrying trend in the last decade in Wisconsin.

So, the problem in Wisconsin is not too much support for unemployment but too little. What worries current legislative leaders, apparently, is that even this minimal support is still too much. In These Times features the situation in Wisconsin.

In Wisconsin, the legislature has voted to reinstate work search requirements for people receiving unemployment insurance, and declined Governor Evers’ proposal to add $15 million to the state’s unemployment system, as well as a proposal to add $28 million to worker training programs. Meanwhile, Republicans in the legislature have made moves to eliminate the $300 supplement from the federal government for UI.

[Gov. Evers says he disagrees with these actions but has not promised to veto the rollback of these pandemic unemployment programs. The evidence of these programs, however, . . . ]

“Unemployment rates in Wisconsin don’t support the overdrawn and quite dramatic, self serving conclusion that there are a bunch of people sitting on the sidelines who are ready to go to go to work in otherwise low wage, no benefit, insecure, crappy jobs if $300 a week, supplemental unemployment benefits were eliminated,” said Peter Rickman, president of MASH. At the same time, Rickman sees the current economic landscape as an opportunity for workers. ​“The way the labor market is constructed right now is such that the balance of power instead of being wholly and entirely in favor of the boss class, has had a slight tipping towards the working class,” he said.

Senator Melissa Agard (D‑16th District) argues that cutting UI won’t put people back to work as much as it would harm struggling families. ​“It’s really unfortunate that my Republican colleagues in Wisconsin are continuing down the same path that they were on pre-pandemic: making it harder for people to be able to get ahead and take care of themselves and their families,” Agard told In These Times. ​“Folks are having a hard time finding people for jobs primarily because they’re not paying people a living wage, or respectable wage to do those jobs.”

One final point to keep in mind is that Wisconsin’s unemployment system has a partial wage formula (not offered in most states) that means unemployment and work are NOT mutually exclusive. Many unemployed folk can and do work part-time while still receiving unemployment benefits.

More Department proposals for 2021

At the 18 March 2021 meeting of the Advisory Council, the Department presented its first eight proposals. These first eight proposals included the proposals that the Advisory Council originally approved of in 2019 (but which were not enacted because of the pandemic).

At the 15 April and the 20 May 2021 meetings of the Advisory Council, the Department presented another 18 proposals — D21-09 thru D21-26. Yikes. Here are those proposals, with links to the actual proposals that appeared at the May 2021 Advisory Council meeting.

D21-09, Employee Status solely determined by unemployment law

The Department seeks to amend the definition of employee and self-employment.

The Department proposes to amend sections 108.09(2)(bm) and 108.09(4s) to provide that all issues of unemployment insurance employee status may only be determined under Wisconsin unemployment statutes and rules. This proposal will provide consistency in determining individuals’ eligibility for unemployment benefits and employers’ unemployment insurance tax liability by limiting the employee status inquiry to the provisions of the unemployment insurance law.

D21-09 at 2. The actual proposed changes seem to do little more than re-arrange statutory wording, however. At present, current unemployment law prohibits consideration of licensing requirements or other state or federal law in determining employee status. So, there is a change in wording being proposed, but I cannot determine what substantively is being changed. The Department’s rationale seems to be that administrative law judges are over-turning initial determinations that held claimants to be employees (and so, concluding that the claimants truly were independent contractors) because those administrative law judges were looking to laws outside of unemployment law.

Yet, Wis. Stat. § 108.09(4s) currently holds that (emphasis supplied):

the appeal tribunal shall not take administrative notice of or admit into evidence documents granting operating authority or licenses, or any state or federal laws or federal regulations granting such authority or licenses.

So, the actual goal of this proposed change is unclear at the moment.

D21-10, SUTA dumping

This proposals adds a provision — required by federal law — to prevent employers from re-organizing themselves and thereby reducing their tax rate significantly and restoring a positive account balance as a “new” employer — a practice called SUTA dumping.

SUTA dumping is a major problem that can easily “cost” thousands of dollars (and maybe even tens of thousands) per employer, especially when extended beyond one year. The proposed penalties are a $5,000 forfeiture, a possible $10,000 civil penalty, and possible criminal charges as a class A misdemeanor (up to 9 months in jail and up to a $10,000 fine).

So, these penalties are chump change and unlikely to discourage any employer but the smallest from SUTA dumping. A large employer who might save $70,000 or more in three years will not bat an eye at these proposed penalties.

Moreover, the penalties for claimant concealment are much more severe. Alongside the financial penalties that claimants incur for the claim-filing mistakes, per 2017 Wis. Act 147 the criminal penalties for claimant concealment are:

  • For benefits up to $2,500: An unclassified misdemeanor with a fine up to $10,000, imprisonment up to nine months, or both.
  • For benefits up to $5,000: A Class I felony, for which the penalty is a fine upto $10,000, imprisonment up to three years and six months, or both.
  • For benefits up to $10,000: A Class H felony, for which the penalty is a fine up to $10,000, imprisonment up to six years, or both.
  • For benefits over $10,000: A Class G felony, for which the penalty is a fine up to $25,000, imprisonment up to 10 years, or both

And, unlike claimant concealment, actual and specific intent to commit SUTA dumping needs to be proven. Proposed Wis. Stat. § 108.16(8)(mm)3 will read:

For the purposes of this paragraph and par. (m), “knowingly” means having actual knowledge of or acting with deliberate ignorance of or reckless disregard for the statute violated.

D21-10 at 3. Claimant “intent” for the purpose of unemployment concealment is shown for any claim-filing mistakes by the following factors:

a. Whether the claimant failed to read or follow instructions or other communications of the department related to a claim for benefits.
b. Whether the claimant relied on the statements or representations of persons other than an employee of the department who is authorized to provide advice regarding the claimant’s claim for benefits.
c. Whether the claimant has a limitation or disability and, if so, whether the claimant provided evidence to the department of that limitation or disability.
d. The claimant’s unemployment insurance claims filing experience.
e. Any instructions or previous determinations of concealment issued or provided to the claimant.
f. Any other factor that may provide evidence of the claimant’s intent.

Wis. Stat. § 108.04(11)(g)2 (setting forth a claimant’s duty of care to provide accurate and complete responses to Department inquires).

These standards are hardly comparable. They should be. They need to be.

D21-11, Work-share modifications

Work-share has been one of the few unemployment success stories in Wisconsin during this pandemic. In light of federal changes to work-share programs during the pandemic, this proposal seeks to expand work-share options and flexibility in light of those federal changes so that more employers and employees can take advantage of these benefits.

This proposal is a no-brainer and should have been adopted months ago.

The Department wants to hear about other changes needed to work-share efforts in Wisconsin. Other than a reduction in the complicated paperwork (a universal complaint for work-share), contact me with your suggestions. I will pass them on to the Advisory Council.

D21-12, Secretary waiver of provisions for the sake of funding flexibility

This proposal expands the general savings clause (the Department’s secretary can waive compliance with any specific state requirement should that state requirement be found to conflict with federal law) to also allow the Department secretary to waive requirements that prevent the state from taking full advantage of federal funding opportunities (like immediately waiving the waiting week when the pandemic struck, as the legislative delay costs Wisconsin employers’ millions of dollars).

Given the current actions of the legislature, this proposal is probably dead on arrival no matter what the Advisory Council recommends.

D21-13, Initial tax rates for construction employers

Unemployment taxes have been declining so rapidly in Wisconsin that the initial tax rates for construction employers — one of the few booming industries from before and during the pandemic — are now lower than the initial rates of non-construction new employers.

2021 tax rates   Non-construction   Construction
Payroll<$500,000   3.05%              2.90%
Payroll>$500,000   3.25%              3.10%

D21-13 at 1. Because construction work is generally seasonal work, initial tax rates in construction should in theory be higher than for general, non-construction employers. The Department’s solution is to amend “the initial tax rate for construction employers to be the greater of the initial rate for non-construction employers or the average rate for construction industry employers as determined by the department on each computation date, rounded up to
the next highest rate.” D21-13 at 2.

Until construction work no longer has seasonal layoffs because of winter, this proposal makes sense.

D21-14, Phone hearings prioritized

Prior to the pandemic, the Department closed hearing offices and forced claimants and employers into phone hearings. An outcry ensued, but the pandemic made phone hearings a necessity.

Current regulations, however, still prioritize in-person hearings over hearings by phone. In this proposal, the Department wants:

to amend chapter DWD 140 to provide that, while parties may continue to request in-person hearings, it is the hearing office’s discretion whether to grant that request. The Department also proposes to clarify language in DWD chapter 140 regarding hearing records, Department assistance for people with disabilities at hearings, and to correct minor and technical language in DWD chapter 140.

D21-14 at 2. As currently worded, the proposal simply justifies what the Department wants to do and provides no actual reasons or justification for these changes. For instance, the Department lacks space for in-person hearings because the Department previously closed three out of four hearing offices.

Even more troubling, the substances of the proposed changes is lacking. Wis. Admin. Code § DWD 140 is THE set of regulations for how hearings are conducted. Any changes to this chapter could have long-term repercussions to claimants and employers about what happens at unemployment hearings and their access to the hearing files connected to these cases.

When presenting this proposal, the Department indicated that the changes to DWD 140 are needed as well as to DWD 149 to reflect the Department’s current practices in responding to open records requests. So, it begs the question of what exactly is in conflict between these regulations and the Department’s current hearing practices. Wis. Admin. Code DWD 149.03 provides:

(1)  Claimants and employing units. Except as otherwise provided under s. DWD 140.09, the department shall make the following records available to the following persons upon request:

(a) An unemployment insurance record concerning an individual is available to that individual.

(b) An unemployment insurance record concerning an individual’s work for an employing unit is available to that employing unit.

(c) An unemployment insurance record concerning a determination to which an employing unit is identified as a party of interest under s. 108.09, Stats., is available to that employing unit.

(d) An unemployment insurance record concerning an employing unit’s status or liability under ch. 108, Stats., is available to that employing unit.

In legal circles it is generally understood that phone hearings favor employers, as employer witnesses can gather in one room and share a set of notes during their testimony without an administrative law judge witnessing those notes being passed.

Finally, for comparison, here is a 1998 Department notice (from a 2000 training about unemployment hearings) about opting for a phone hearing. If the Department is going to go forward with this change, it should address these points it put forward in 1998 for why phone hearings are problematic.

D21-15, Camp counselor employer exclusion

Currently, summer camp counselors are generally ineligible to receive unemployment benefits because they are usually full-time students. But, summer camps must still pay unemployment taxes for the wages paid to summer camp counselor.

This proposal applies the federal definition of excluded employment for camp counselors to state law.

The result of this change is that summer camps will no longer pay unemployment taxes for the wages paid to their summer camp counselors. And, some summer camp counselors who are not students may lose the ability to include their summer camp wages in establishing a benefit year.

D21-16, Repeal of drug testing requirements

This proposal repeals the drug testing provisions the Walker administration kept trying to institute. Recall that the drug testing efforts came in three parts: (1) voluntary employer testing and reporting, (2) mandatory testing of claimants based on to-be-determined federally designated occupations for testing, and (3) mandatory testing of claimants based on a future, state-based list of designated occupations. Only the voluntary employer testing and reporting was ever implemented.

The big news here is that as of 31 March 2021, the Department has received 171 drug test reports (either a failed test or failing to take a test) from potential employers. Previously, the Department had reported none or just a couple of voluntary testing reports from employers. In any case, the impact of these 171 voluntary employer reports remains nil. “No claimants have been determined to be ineligible for UI benefits under the pre-employment drug testing statutes and rules and denied benefits because of the employers’ reports of a failed or refused drug test as a condition of an offer of employment.” D21-16 at 1. So, there has been no opportunity for claimants to maintain their eligibility by enrolling a drug treatment program at the state’s expense.

Because employers have no idea of whether a job applicant is receiving or not receiving unemployment benefits OR because employers are failing to provide the necessary drug-testing paperwork and follow the necessary protocols for reporting a drug test OR a combination of these two factors, the voluntary drug testing has been a complete bust. In more than five years, this effort has not led to a single disqualification or enrollment in a drug treatment program. Ending a program that is doing nothing should make sense.

D21-17, Repeal of the substantial fault disqualification

This proposal seeks to repeal the substantial fault disqualification. There are two issues with this proposal, however.

First, the Advisory Council previously rejected substantial fault when it was originally proposed. It was the Joint Finance Committee that went around the Advisory Council and which included substantial fault in the state budget. So, the Advisory Council does not need to approve of this repeal. It was already rejected, and the rejection should be included as a matter of course.

Second, court decisions in Operton v. LIRC, 2017 WI 46, and Easterling v. LIRC, 2017 WI App 18, have limited the scope of substantial fault in important ways from how the Department applies this disqualification. But, the Department continues to ignore those court precedents. Indeed, as of May 2021, I have come across two cases of employees disqualified for substantial fault because of unintentional mistakes where the mistakes in question are nearly identical to the mistakes in Operton (inadvertent job mistakes) and Easterling (unintentional mistakes while attempting to satisfy employer demands).

D21-18, Expansion of the relocating spouse quit exception

This proposal restores this quit exception to allow any claimant who has to quit a job because his or her spouse has to relocate. Prior to 2013, Wisconsin allowed claimants to receive unemployment benefits when they had to relocate because of a spouse transferring to another job for any reason. In proposal D12-19, the Department limited this quit exception to the spouses of military personnel who had to relocate.

So, this proposal restores the expansive nature of this quit exception.

The problem here, like with substantial fault, is that the Advisory Council previously rejected this Department proposal to limit this quit exception to the spouses of military personnel. Here is what the Advisory Council actually agreed to back in 2013. So, this proposed change should be included as a matter of course in the council’s agreed-upon bill.

D21-19, Repeal of the waiting week

The waiting week was enacted as part of the 2011 budget act, 2011 Wis. Act 32 and without any input from the Advisory Council.

The concept of a waiting week exists because state unemployment agencies originally could not act quickly on a claim for benefits, and so a waiting week was needed to give the state agency time to process the necessary paperwork. With the advent of claim-filing by phone, however, that additional time was no longer needed. The waiting week effectively became a vehicle for reducing the total amount of benefits paid out to a claimant, since claimants did not receive any unemployment benefits for the first week of their claim.

The Department estimates that the waiting week costs claimants $26.1 million each year. D21-19 at 3. Given the purpose of unemployment benefits to provide immediate economic stimulus to workers in time of need after losing their jobs, a waiting week makes no sense.

D21-20, Repeal of the lame duck work search and work registration changes

The lame duck laws, see 2017 Wis. Act 370 for the unemployment changes, that were enacted after Scott Walker lost his re-election bid, moved the Department’s work search and work registration requirements from Department regulations and into statutory law. That is, Republicans were so concerned about making sure these obstacles for unemployment eligibility remained in place that they made them statutory rather just a regulation that the new administration might then revise.

So, this proposal restores what existed before the lame duck changes and gives the Department some additional flexibility in how work search and work registration requirements are administered.

D21-21, Repeal of the wage cap on benefit eligibility

Right now, a hard cap of $500 per week is written into unemployment law. This cap was first proposed by the Department in D12-18, which the Advisory Council adopted at their 21 Feb. 2013 meeting.

In light of Wisconsin’s partial wage formula, a claimant with a weekly benefit rate of $370 could in theory have as much as $574 in wages and still qualify for at least $5 in unemployment benefits. D21-21 at 1. In other words, the partial wage formula indicates that anyone with $575 or more in wages would NOT receive any unemployment benefits.

As a consequence, the $500 cutoff actually discourages some work, as any employee who receives $500 or more in wages loses all unemployment benefits. For instance, a person with a WBR of $370 who earns $550 in wages would receive $22 in unemployment benefits that week, if the $500 wage cap was eliminated.

In other states, the gap between earnings and unemployment eligibility is called an “earnings disregard.” In some of these states, a worker who earns just $200 in a week loses unemployment eligibility dollar for dollar, so the earnings disregard in those states is sizable. See Massachusetts, for example, in this table. Because of Wisconsin’s partial wage formula, the earnings disregard in Wisconsin is limited to this $500 wage cap and only applies for claimants receiving the highest weekly benefit rate.

So, at present this $500 wage cap has a very limited effect. But, should the weekly benefit even be increased, it will become a major problem. And, as indicated in the next proposal, Wisconsin now has the second-lowest weekly benefit rate in the mid-west. So, this artificial cap needs to go if Wisconsin is going to raise its weekly benefit rate.

Finally, as noted by the Department, D21-21 at 3, the eligibility ban when working 32 or more hours in a week remains in place.

D21-22, Raising the weekly benefit rate

Currently, Wisconsin has the second-lowest maximum weekly benefit rate in the mid-west.

State   Max. WBR    Max. w/ dependents
IL        $484           $667
IN        $390           $390
IA        $481           $591
MI        $362           $362
MN        $740           $740
OH        $480           $647
WI        $370           $370

A listing of the weekly benefit for all the states is available here.

Note: this data is different from what the Department reports in its proposal, and these numbers are current as of October 2020. These numbers have changed since then. Ohio, for instance, currently has a maximum WBR of $498 and $672 with dependents.

The highest WBR available is in Massachusetts, at $823 ($1,234 with dependents). The second highest is in Washington state at $790.

This proposal sets forth a series of increases in the weekly benefit rate.

  1. For benefits paid for weeks of unemployment beginning on or after January 2, 2022, but before January 1, 2023, the maximum weekly benefit is capped at $409.
  2. For benefits paid for weeks of unemployment beginning on or after January 1, 2023, but before December 31, 2023, the maximum weekly benefit is capped at 50% of the state’s annual average weekly wages.
  3. For benefits paid for weeks of unemployment beginning on or after December 31, 2023, the maximum weekly benefit is capped at 75% of the state’s annual average weekly wages, or the maximum weekly benefit amount from the previous year, whichever is greater.

Wisconsin’s weekly benefit rate relative to the wages being paid in this state has never been all that good and has become essentially a token reimbursement in the last few decades.

History of the weekly benefit rate relative to wages paid in Wisconsin

Using the average weekly Wisconsin wage of $951 in 2019, the maximum WBR in 2023 would be $475, and in 2024 the maximum WBR would be $713. So, this proposal would basically make the maximum weekly benefit rate actually useful and relevant again in Wisconsin.

D21-23, Expanded flexibility in searching for suitable work

Here, the Department proposes two changes. First, the Department wants to expand the canvassing period from six weeks to eleven weeks.

The canvassing period is the time when you can reject a job offer which is a lower grade of skill or at a significantly lower rate of pay (less than 75%) than you had on one or more recent jobs without losing your eligibility for benefits. See Tips for filing for unemployment benefits in Wisconsin for more information about your canvassing period.

Second, the Department proposes expanding the trial time period for quitting a job without being disqualified from receiving unemployment benefits from 30 days to ten weeks (the original time period). The Advisory Council originally approved of the change from ten weeks to 30 days.

This trial time period provides various ways for an employee to still qualify for unemployment benefits when quitting a job regardless of the employee’s actual reason. The main reason found in this category usually is that the job fails to meet established labor market standards (e.g., wages are 25% or less than what is normally paid in that specific labor market for that occupation). But, any reason that would have allowed the employees to refuse the job offer in the first place as well as any reason for quitting the job with good cause applies here. Only the last reason — having good cause for quitting the job — is still available to employees after the trial period has expired.

D21-24, changing the SSDI eligibility ban to an offset

This proposal was previously discussed here, along with the entire history of the Department’s SSDI eligibility ban qua offset. Whether as an eligibility ban or an offset, it still makes no sense. There should be no SSDI offset, just like there should be no SSDI eligibility ban.

Here is hoping the Advisory Council can fix this crazy proposal and end this discrimination against the disabled.

D21-25, Mandatory e-filing for employers

At present, large employers (those with annual unemployment taxes of $10,000 or more) must e-file their reports and e-pay their unemployment taxes.

This proposal would mandate e-filing and e-pay for ALL employers.

The problem is that many one or two person LLCs and other self-employed individuals have no conception of unemployment taxes and the reports that need to be filed. Given the lack of broadband access in the state, this mandate for these small employers is likely difficult to impossible to implement.

Without a broad-based, educational media campaign, this mandatory e-filing will accomplish little more than allowing the Department to levy administrative penalties against small employers who have no idea what is going on and fail to provide their forms and payments via e-file and e-pay. The fact that implementation will be delayed until the Department actually has the technology in place to support this proposal offers little assurance. In short, this proposal should be rejected out-of-hand. After all, those who push for ease-of-use indicate that multiple kinds of access need to be maintained and fully supported. So, mandatory e-filing and e-pay actually runs counter to making unemploymeny more modern and easier-to-use.

D21-26, New worker mis-classification penalties

This proposal seeks to replace the token employer penalties for mis-classifying construction workers (1) with penalties that at least some have some dentures to them and (2) to expand this issue to all industries rather than limiting it to just construction.

The Advisory Council at the urging of Mark Reihl, then the head of the carpenters’ union in Wisconsin (and now division director for unemployment) originally approved the original penalties proposed by the labor caucus.

  1. $500 civil penalty for each employee who is misclassified, but not to exceed $7,500 per incident.
  2. $1,000 criminal fine for each employee who is misclassified, subject to a maximum fine of $25,000 for each violation, but only if the employer has previously been assessed a civil penalty for misclassified workers.
  3. $1,000 civil penalty for each individual coerced to adopt independent contractor status, up to $10,000 per calendar year.

D21-36 at 1.

With this proposal, the Department explains:

The proposal removes the $7,500 and $10,000 limitations on these penalties and provides that the penalties double for each act occurring after the date of the first determination of a violation. The proposal also removes the limitations on the types of employers to which the penalties apply, allowing them to be assessed against any type of employer that violates the above prohibitions.

D21-26 at 4.

BUT, the intent that needs to be shown for these mis-classification penalties remains unchanged. Per Wis. Stat. § 108.221(1)(b):

(b) The department shall consider the following nonexclusive factors in determining whether an employer described under par. (a) knowingly and intentionally provided false information to the department for the purpose of misclassifying or attempting to misclassify an individual who is an employee of the employer as a nonemployee:

1. Whether the employer was previously found to have misclassified an employee in the same or a substantially similar position.
2. Whether the employer was the subject of litigation or a governmental investigation relating to worker misclassification and the employer, as a result of that litigation or investigation, received an opinion or decision from a federal or state court or agency that the subject position or a substantially similar position should be classified as an employee.

Under this standard, it is well nigh impossible to charge an employer with mis-classification for a first-time violation. On the other hand, claimants are given no such leeway for their claim-filing mistakes. As noted above with proposal D21-10 (SUTA dumping), claimants who have filed for unemployment insurance previously and been given notice to read the claimants’ handbook are presumed to know everything about how to file an unemployment claim and to not make any claim-filing mistakes. But, here, employers are not liable for mis-classification (a far more serious problem economically) until after their first instance of mis-classification. In other words, these mis-classification penalties can only apply to employers when prosecuted a second time for the same mis-classification. Having two bites of the apple sure is nice.

Either employers should be held to the same claim-filing standards as employees, or the intent requirements used against employees for their claim-filing mistakes needs to be seriously redone.

Ending the supplemental unemployment programs early in service of stigma

Update (14 June 2021): UI Works provides some information about how unemployment is a crucial economic support for families and state economies.

Yesterday, both Wisconsin legislative chambers passed AB336, a bill to stop PUA, PEUC, MEUC, and PUC benefits in Wisconsin. The Republicans in the state legislature are pushing for the end of all of these pandemic-related supplemental unemployment benefits, under the disguise that these additional benefits are keeping people from working.

Utter nonsense. The real reason for what is happening is a push to create a stigma against those receiving unemployment benefits.

First, the news from a few days ago about a massive budget surplus based in large part on these federal supplemental unemployment benefits should be enough to indicate just how foolish this proposed early end to these programs is.

While I have some concerns about how unemployment payments in 2021 are goosing these fiscal numbers (because the 2021 payments largely represent payment of weeks claimed in 2020 since unemployment payments in Wisconsin are delayed by six to twelve months or even longer), the legislative fiscal bureau has assured me that these back-loaded payments have been accounted for in the fiscal projections.

So, Republicans are basically proposing to cut off immediately one of the major engines of economic recovery. Why?

Second, the recovery is still ongoing. While initial claims in 2021 are well below what they were in 2020 when the pandemic first struck, they are still running at over twice the number of initial claims that occurred in 2019. So, despite all the reports about businesses having trouble finding workers, it seems that far too many businesses are also still letting people go.

Third, David Copper writes that cutting unemployment benefits early hurts workers and state economies:

  • Pulling out of federal unemployment insurance (UI) programs is short sighted and not justified by current labor market conditions; the economy is improving but still far from healthy.
  • Suitable jobs are still not available for many jobless workers. Cutting back aid will leave many struggling to make ends meet and damage these states’ long-term economic health.
  • Unemployment benefits help speed recovery by bolstering consumer demand. Governors choosing to pull out of federal programs are taking away dollars that would likely be spent at businesses in their own states.
  • Workers should have time to find work suitable to their skills and circumstances, and not be cornered into taking any job available. An adequate UI system provides workers with the financial cushion and time to find appropriate work.
  • Forcing the unemployed to take jobs that pay less than their previous positions or that are not appropriate for their skills is a waste of workers’ training, a job taken from someone else, and a hit to that worker’s earnings—all of which hurt states’ long-run potential for growth.

Fourth, rumors of labor shortages are NOT backed up by the actual data, writes Heidi Shierholz.

  • The chorus of employers complaining they can’t find the workers they need is not new. As we have seen coming out of previous recessions, as employers raise wages to attract workers, their staffing needs are being met.
  • The main problem in the U.S. labor market remains one of labor demand, not labor supply. The latest jobs report showed no signs of widespread labor shortages.
  • In a large majority of sectors, wages are growing solidly but not fast enough to raise concern about damaging labor shortages, given that job growth in those sectors is also strong.
  • Employers of low-wage workers typically have a great deal of power to suppress wages. This corners workers into taking any job regardless of how bad the wages or working conditions. Unemployment benefits are helping to take this pressure off workers and allowing them to not accept a terrible job — this is what economists would call efficiency enhancing.
  • States cutting pandemic UI programs stand to lose $22 billion in aid, forgoing an enormous amount of economic activity.

Fifth, a report from Jeanne Batalova and Michael Fix at the Migration Policy Institute indicates that:

A tight labor market and decent supports for unemployed workers means people can avoid getting shunted into jobs below their level of potential. That’s good for them – they will earn higher wages, and for government – they will pay more in taxes. It’s also good for overall economic productivity.

In fact, rather than saying a tight labor market/decent support policy is good or bad for employers, maybe we could differentiate and say it’s good for employers who hire higher-skilled workers and bad for those employers who offer jobs that do not require much education or training.

Sixth, because of Wisconsin’s partial wage formula, workers receiving unemployment benefits do better when working part-time, receiving both wages and unemployment benefits. In other words, unemployment and work are NOT mutually exclusive in Wisconsin and often happen together, especially in retail and restaurant work, where the supposed workers shortages are allegedly highest.

As Ruth Conniff writes, a politics of austerity and resentment is behind these changes.

trying to pit one group of voters against another doesn’t work as well when the Republicans are turning down billions that would make a big difference in people’s lives in every area of the state.

As I have written, the Republicans are simply returning to the old playbook of making unemployment worse in order to drive workers into low wages jobs as a substitute for the unemployment benefits they should be receiving. Feudal economics, indeed.

What is lost in this hubbub is the essential nature of unemployment benefits in the first place. Unemployment is an insurance system. Just like car insurance is there when there is an car accident, unemployment is supposed to be there when there is a job loss. Period. Under Wisconsin unemployment law, eligibility is presumed (at least that is what is supposed to happen).

We need to start thinking that unemployment is what it is — insurance — that must be paid out immediately whenever there is a no-fault job loss. As Wisconsin law explains:

Whether or not a given employing unit can provide steadier work and wages for its own employees, it can reasonably be required to build up a limited reserve for unemployment, out of which benefits shall be paid to its eligible unemployed workers, as a matter of right, based on their respective wages and lengths of service.

Wis. Stat. § 108.01(1) (emphasis supplied).

For those that want to see the impact this reduction of unemployment is having on states that are going forward with it, NELP has the details:

In 21 States Ending All Pandemic Unemployment Programs Early, 3 in 4 Will Lose All Jobless Aid

Nearly 4 Million Workers to Lose Lifeline Unemployment Payments Starting June 12

NATIONWIDE — In the 21 states ending early their participation in all federal pandemic unemployment programs, three quarters of the workers now receiving jobless aid—nearly 2.3 million people—will be left with no state or federal jobless aid at all, according to a new analysis released today by the National Employment Law Project (NELP).

The greatest numbers of workers affected by the pandemic unemployment cutoffs will be in Texas, Ohio, Maryland, Georgia, Indiana, Arizona, Tennessee, Missouri, South Carolina, and Florida. In Texas, a staggering four in five workers (81.9%) currently receiving unemployment payments—totaling 1.2 million workers, 59.3% of whom are workers of color—will lose all unemployment income support.

“The post-pandemic recovery has barely started. Employment remains far below pre-pandemic levels. Millions of people are still out of work and need the income support from unemployment insurance to get by,” said Rebecca Dixon, executive director of the National Employment Law Project. “So it’s unconscionable that these 21 Republican governors have unilaterally decided that no one in their state needs any pandemic jobless aid anymore and that it’s OK to pull the plug on these programs early.”

“This severe, abrupt, and ill-advised cutoff of pandemic jobless aid hurts the workers and families who need that income support, harms the small businesses that depend on those workers to spend money as customers, and will set back the economic recovery in those states,” added Dixon.

The first wave of premature cutoffs begins on Saturday, June 12, in four states: Alaska, Iowa, Mississippi, and Missouri. Alaska will be ending only the $300 Federal Pandemic Unemployment Compensation (FPUC) weekly supplemental payments, while the other three states will be terminating all pandemic unemployment programs. Twenty-one more states will follow suit through June and early July, although NELP has argued that the U.S. Department of Labor has legal authority to ensure that all eligible workers continue to receive Pandemic Unemployment Assistance (PUA) benefits through September 6.

More than 3.9 million workers in 25 states will lose the weekly $300 FPUC payments. Workers of color will bear the brunt, as nearly half (over 46%) of unemployment insurance (UI) recipients in those states are Black, Latinx, Indigenous, and other people of color.

Workers losing out on lifeline payments will face an economy that is far from fully recovered. The May jobs report showed 9.3 million people unemployed, with another 5.3 million only working part-time but still seeking full-time work. The economy is down 7.6 million jobs (5%) from pre-pandemic Feb. 2020 levels. With families still reeling from loss, lack of childcare, and ever-present concerns about getting sick on the job, FPUC and all UI funds remain a crucial lifeline.

“The past year has demanded bold solutions to unprecedented levels of unemployment, with the additional federal unemployment funds serving as a necessary stopgap in lieu of structural reform. At this pivotal moment, elected officials need to get behind critical reforms to prevent future failures of our unemployment system, so we can avoid the type of harmful actions we’re now seeing at the state level,” said Dixon.

Federal pandemic programs are still helping millions of people and their families get through the worst economic crisis in over a century. For jobless workers and their families in states where Republican governors have opted out, the ramifications will be far-reaching:

- Over 3.9 million workers will lose the weekly $300 FPUC supplement in the 25 states. 3,951,578 people receiving unemployment payments as of May 15 will be affected — all of them losing the $300 weekly FPUC benefit supplement and more than half (57.5%) abruptly losing all unemployment benefits.

- In the 21 states ending participation in all of the pandemic programs, nearly 2.3 million people, who represent 74.5% of those receiving unemployment benefits in those states, will be left with no state or federal unemployment aid at all.

- Black, Latinx, Indigenous, and other people of color are nearly half (over 46%) of UI recipients in the states ending pandemic unemployment programs early.

- Of the 25 states cutting pandemic unemployment payments, 11 of them have 40% or higher people-of-color UI recipients, and eight have 50% or higher.

With unemployed people spending money at higher rates, federal assistance helps stimulate the economy just as businesses and industries begin to reopen, in addition to keeping families afloat. States that are prematurely ending federal pandemic unemployment programs threaten to stymie a fuller recovery.

READ THE DATA BRIEF: 3.9 Million Workers Face Premature Cutoff of Pandemic Unemployment Programs

Being able and available when disabled: getting worse in the weekly certifications

In September 2020, I described how the able and available questions on the weekly certification ignored actual Department regulations. In short, the questions about being able or available for full-time work ignored key regulations that allow claimants to answer “yes” if they could work to the best of their ability the number of hours they were capable of working. So, a claimant who can only work 20 hours in a week because of a physical or psychological disability should answer yes to these questions as long as they are capable of working 20 hours in a week and do not restrict their ability or availability even further.

Rather than incorporating these regulatory requirements into these questions, the Department has doubled down on ignoring its own regulations.

Here is how the ability to work question read in July 2020.

Ability to work question in July 2020

And, here is how the question read in October 2020, a few weeks after my original post on this issue.

Ability to work question as of October 2020

A fourth bullet point concerning childcare issues has been added, but the question itself is otherwise unchanged. As indicated previously, restrictions on an ability to work do NOT make someone unable to work full-time, especially when those restrictions arise from physical or psychological conditions.

Here is how the Department further revised these questions in April 2021. First the ability to work question.

Ability to work question in April 2021

The explanatory bullet points concerning the pandemic have been reduced to just two and the question itself has been changed to turn entirely on whether a person can work 32 hours in a week or not.

Nearly identical changes have been made to the available work question:

Work availability question in April 2021

So, now the Department is requiring people to answer “no” if they cannot work 32 or more hours in a week, including when a person has medical restrictions that limit an ability to work. This question is legally wrong.

The relevant unemployment regulations do NOT reference medical restrictions. There is no reference at all in Wis. Admin. Code § DWD 128 to a claimant’s medical restrictions. Section DWD 128.01(3)(a) explicit states that the factors to be considered by the Department may include:

2. The nature of the restrictions caused by the claimant’s physical or psychological condition.

Per this regulation, an ability to work and a disabled claimant’s availability for work are based on whether a claimant has physical or psychological restrictions that mean he or she cannot work 32 or more hours in a week. And, according to these regulations, as long as that claimant is able and available to work that number of hours, he or she is able and available for full-time work. Again, from these same regulations:

Example 1: A claimant has a number of physical restrictions due to recent surgery, including a restriction to work no more than 20 hours per week for 2 months. With the restrictions, the claimant cannot perform the duties of his or her usual occupation but is able to perform a number of jobs for which he or she has prior training and experience. The claimant is willing to do these jobs and is willing to work 20 hours per week. The claimant has no other restrictions to availability. Benefits will not be denied solely because of the inability to work full−time [32 or more hours in a week].

So, these new questions are in direct violation of the Department’s own unemployment regulations.

Even worse, administrative law judges at unemployment hearings are asking disabled claimants for “evidence” regarding their “medical restrictions,” as if these weekly certification questions stated actual unemployment law and over-ruled the actual regulations that directly relate to this issue.

Understand as well that answering “no” to these questions based on what is being asked means that all benefit payments are on hold until the Department “investigates” this issue, which now takes around three to five months.

So, not only does this question not follow the Department’s own regulations, but it also now runs afoul of federal requirements for unemployment benefits to be paid “when due.” A recent federal court decision explains the nature and importance of this requirement:

It has long been recognized that protracted denial of subsistence benefits constitutes irreparable harm. See Morel v. Giuliani, 927 F.Supp. 622, 635 (S.D.N.Y. 1995) (finding irreparable harm where New York City regularly failed to provide “aid continuing” benefits, in violation of federal and state law), amended, 94-CV-4415, 1996 WL 627730 (S.D.N.Y. Mar. 15, 1996). To indigent persons, the loss of even a portion of subsistence benefits results in injury that cannot be rectified through the payment of benefits at a later date. See id. (collecting cases). The reason for this should be obvious. Subsistence benefits by definition are those that provide for the most basic needs. As such, when the outright denial or undue delay in the provision of subsistence benefits is at issue, courts have not hesitated to utilize the extraordinary remedy of preliminary injunctive relief. See, e.g., Willis v. Lascaris, 499 F.Supp. 749, 759–60 (N.D.N.Y. 1980) (enjoining reduction in food stamp allowances); Hurley v. Toia, 432 F.Supp. 1170, 1176–78 (S.D.N.Y. 1977) (granting preliminary injunction and staying enforcement regulation authorizing termination or reduction of public assistance benefits prior to affording hearing), aff’d, 573 F.2d 1291 (2d Cir. 1977); Boddie v. Wyman, 323 F.Supp. 1189, 1193 (N.D.N.Y. 1970) (“There is no doubt . . . that the differences sought in payments by the plaintiff are extremely important in respect to these things daily and in that sense when the day passes the injury or harm that may occur is irreparable.”), aff’d, 434 F.2d 1207 (2d Cir. 1970), aff’d, 402 U.S. 991, 91 S.Ct. 2168, 29 L. Ed. 2d 157 (1971).

That unemployment insurance benefits fall into the category of subsistence benefits cannot be credibly disputed. Indeed, the vitalness of unemployment insurance benefits is codified in New York Labor Law, which recognizes that “[e]conomic insecurity due to unemployment is a serious menace to the health, welfare, and morale of the people of this state.” N.Y. Labor Law § 501. This is all the more true against the backdrop of the current health crisis ravaging this nation—a crisis which has led to almost unprecedented unemployment across various sectors, including the app-based FHV industry.

Islam v. Cuomo, 475 F.Supp.3d 144, 153 (E.D. N.Y. 2020). Note: Wisconsin has similar statutory language concerning the economic insecurity created by unemployment in Wis. Stat. § 108.01(1).

Unemployment in Wisconsin is recognized as an urgent public problem, gravely affecting the health, morals and welfare of the people of this state. The burdens resulting from irregular employment and reduced annual earnings fall directly on the unemployed worker and his or her family.

Making the claim-filing questions worse — further ignoring unemployment law and adding additional delays to benefit payments — is ignoring how vital unemployment benefits are to those who have lost jobs through no fault of their own.

Note: my thanks to various workers for bringing these changes to my attention. Keep the tips coming.

The DWD budget

The Joint Finance Committee met yesterday for the 2022-2023 fiscal budget. At this meeting, there were many complaints about job shortages and how “unemployment” was keeping the people collecting benefits from working. Rep. Zimmerman even described how he had to close his winery early on one Saturday because of a lack of workers. How terrible.

Apparently, no one on this committee understands that Wisconsin’s partial eligibility formula for unemployment benefits encourages people who are collecting benefits to accept part-time work and to work part-time.

Sigh. Under the partial wage formula, part-time weekend work is a financial boon for those collecting unemployment benefits. So, the real problem Rep. Zimmerman is having for finding weekend workers for his winery is that he is not offering a high enough wage to attract applicants. In other words, being unemployed does not mean that a person is not working. Indeed, in Wisconsin prior to the pandemic and outside of the winter months when many jobs shut down, most unemployed workers are actually still working.

As usual, Jake has the details on what the Joint Finance Committee did and did not do.

The LFB also mentions that the Evers Administration could use some of the $2.5 billion in discretionary money that the state will receive over the next 2 years, but much of those funds have already been planned on to be spent for other needs, such as $420 million in grants to small businesses.

So Evers was planning to use $15 million in state money in 2022 and 2023 to make up the deficit that exists in unemployment administration. And now the GOPs say “no,” which means that we will have to find somewhere else to make up the money, or eventually lay off a sizable amount of the staff that was added to take care of the delays in getting people their benefits, and in clearing up questions about their applications.

And did the WisGOPs remove any of the barriers and added paperwork that made getting benefits such a pain in the backside for so many state residents? OF COURSE NOT, and in fact, they’re bringing back more of this idiocy.

“Also Wednesday, the Republicans voted to reinstate a drug testing policy for some recipients of unemployment benefits.”

“In addition, they approved commissioning a study that would link how long Wisconsinites can receive benefits to the state’s unemployment rate. Under that system, the unemployed would qualify for benefits for a longer period when jobs are harder to find.”

Of course, the flip side is that they also can cut off people faster if the unemployment rate goes down. Even if the number of jobs remains significantly below where they were at the peak (which is the situation we are in today).

This connecting of unemployment benefits to the unemployment rate is a favorite mechanism for making unemployment that much more worse in times of an economic downturn. Legislators have been pushing this idea since 1 April 2013 (see #30). In Florida when the pandemic struck, Floridians were only eligible for 12 weeks of regular unemployment benefits (special legislation was passed to increase the number of weeks to 19). So, while the unemployment system in Wisconsin has been bad, the system in Florida has been even worse. This Florida “solution” — Wisconsin ended work search waivers during the winter off-season because of another Florida innovation — should be rejected out-of-hand.

As the Political Environment sums up the whole process:

[The Joint Finance Committee] just blocked funding for a UC system upgrade.

As I recently wrote, Wisconsin’s GOP leaders are running a pain and suffering operation out of the State Capitol that deliberately keeps low-income and disadvantaged citizens trapped in poverty, bad health and powerlessness.

Pro bono of the year award for unemployment

Update (6 July 2021): TMJ4 has this story about the award.

The Wisconsin state bar has announced its winners for pro bono attorney of the year award, and I am a co-winner with Rebecca Salawdeh in light of our separate work responding to the unemployment crisis in this state.

This entire website describes my efforts on behalf of the unemployed. So, I do not need to say much more about what I have been doing.

But, we all should hear about what Rebecca has been doing. She has been volunteering every Wednesday at Legal Action’s Milwaukee clinic to answer questions claimants are having about their unemployment claims. She has also taken on numerous cases herself and has appealed a few to the Labor and Industry Review Commission.

The need for just explaining the claim-filing process is overwhelming, Rebecca has found. Claimants cannot figure out what is going on with their claims — why a claim is being investigated or on hold or being denied. They cannot get answers from the portal or from staff answering claimants’ phone calls, Rebecca has observed. And so, just providing some perspective and explanation to claimants has been a godsend to many, Rebecca has witnessed, even for those who do not have a viable claim for unemployment benefits. For too many, finally getting an explanation about what has been going on is all that they wanted or needed.

Rebecca has also taken on several cases herself. Most of those hearings have gone well. The few that have not are being appealed to get the law applied correctly.

What Rebecca has seen in these cases is the toll that all of the delays and complications in the claim-filing process have created for claimants. One woman, on finally receiving the appeal tribunal decision finding her eligible and about to receive more than $10,000 in unemployment benefits, broke down and wept uncontrollably. Only at that point could all of the waiting and tension finally be released, and it was too much for her to contain.

I wholeheartedly agree with everything Rebecca has seen. A video of my acceptance speech has yet to be made available. But, here is the text of that speech.

I want to thank the state bar, all of the people who nominated me for this award, and my family for tolerating my crazy work hours this past year.

This award is because of the many unemployed folks I have been helping, including many, many disabled workers who are denied regular unemployment benefits.

When the pandemic hit, a host of new unemployment programs were started up, including a new program called Pandemic Unemployment Assistance or PUA, intended for workers for whom regular unemployment benefits were not available.

Perversely, Wisconsin initially held that these PUA benefits were NOT available to disabled workers because of the eligibility ban for regular benefits – the very reason PUA benefits were created in the first place.

Luckily, leadership at the Department of Workforce Development listened to reason and reversed course from what staffers were saying. By late July 2020, PUA benefits were finally available to disabled workers.

But, the struggles for disabled workers to receive their PUA benefits did not end. New obstacles have appeared through new tests and changes in how the Department administers the claim-filing process. For instance, despite state unemployment law holding that disabled workers are able and available for work that is less than 32 hours a week, as long as they work to what their disabilities allow, the Department and administrative law judges are holding that disabled workers are automatically disqualified if they ever work less than 32 hours in a week.

So, disabled workers continue to struggle. They have lost jobs and have waited and waited and waited for unemployment benefits. Far too many are still waiting on benefits now in May 2021 after having lost work in March or April of 2020.

Even for those that have received their PUA benefits, far too many have had to avoid eligibility traps during the claim-filing process or at their hearings or just to find ways to cope with the waiting. Numerous cases concerned simple questions about these disabled workers losing their jobs when their employers closed because of the pandemic. Their claims were denied despite their obvious eligibility for PUA benefits. And so, they waited months for hearings to state the obvious: they lost work when their employers closed because of the pandemic.

That waiting was torture for more than a few. Some have sold their furniture. Food banks and rental assistance are life-saving. Some having fallen into the trap offered by payday lenders. Wisconsin invented unemployment benefits so as to provide immediate and needed financial assistance at times of massive job loss. It has failed.

Representation at these unemployment hearings has been crucial to turning the situation of these disabled workers around. Cases are being won and payments have gone out. The secretary’s office at the Department has been especially helpful in speeding up the scheduling of emergency matters so as to prevent evictions, or worse. Mothers and their children have celebrated the December holidays in their own home. Family pets have not been abandoned. Cars have finally been fixed.

Still, the problems with the unemployment system continue and, in some ways, are getting worse. If these trends are not turned around, I may well be up for this award next year. So, I urge all of you to get involved in this unemployment crisis and give me some competition. There is plenty of work to do.

Thank you.