LIRC has just published to its website a comprehensive analysis of concealment issues in unemployment cases.
The decision is lengthy, as concealment cases by their very nature require a week-by-week examination of wages and unemployment benefits. This case also has a complicated history (LIRC issued an earlier decision that DWD asked to be reconsidered), and LIRC is careful here to delineate what standards should apply in a finding of concealment, what Department investigations should entail, and the obligations of administrative law judges during hearings when confronted with claimants who have difficulty understanding what is happening to them in regards to the concealment allegations.
There are two main factual issues at stake in this decision. First, the claimant was confused by the change in how DWD asks claimants on their weekly claim certifications about work and wages or pay received. This issue is not new, but here LIRC goes into detail about why a compound question on weekly claim certifications is problematic. The Commission explains (footnotes removed):
The commission is not alone in finding compound questions like the department’s Question No. 4 a potential source of misunderstanding by claimants. In June 2011, the U.S. Department of Labor strongly encouraged states to review the wording of their continued claims certification form and telephone script to assess whether any questions or language should be made clearer to ensure claimants understand what is being asked. The following example was given:
If the certification form or script contains a two-part question such as:
- Did you work and earn wages during the week?
Two separate questions could be asked instead, such as:
- Did you perform any work during the week?
- If you worked, what was the amount of wages you earned during the week (report wages earned whether or not these wages have been paid)?
This suggestion to rid claim certification forms and telephone scripts of two-part questions was part of an immediate call to action by the U.S. Department of Labor to all state administrators to develop state-specific strategies to bring down the improper payment rate in unemployment insurance benefits programs. The call to action was communicated in Unemployment Insurance Program Letter (UIPL) No. 19-11, titled National Effort to Reduce Improper Payments in the Unemployment Insurance (UI) Program. It was recognized that the best way to effectively reduce the improper payment rate is to prevent improper payments before they occur. The U.S. Department of Labor identified unreported or under-reported earnings by claimants as the primary cause of overpayments.
Yet, in spite of the call to action, sixteen months later, in October 2012, the department did exactly the opposite of what the U.S. Department of Labor suggested it do. The department took a relatively simple, straightforward question, one not easily susceptible to misinterpretation — “Did you work?” — and created a compound question — “During the week, did you work or did you receive or will you receive vacation pay, bonus pay or commission?” In doing so, the department created an identified cause of misunderstanding by claimants and a known source of improper payments. Question No. 4 was not made clearer to ensure claimants understood what was being asked; it was made more complex and confusing. At the same time, the department also increased the penalties for concealment.
Second, the Commission found from the claimant’s testimony that she was most likely learning disabled and confused about her reporting requirements as well as the unemployment process in general. While her prior unemployment claims and her receipt of the claimant’s handbook (on-line only now) indicated that it was possible to infer that concealment could have happened, other evidence demonstrated that an actual intent to conceal was completely lacking.
It was clear from the employee’s testimony throughout the hearing that she was confused. The employee was confused about how the unemployment insurance program operates in general and was confused by Question No. 4 on the weekly claim certifications in particular.
In a request to reconsider this decision, the Department contended that there needed to be evidence causally linking the claimant’s confusion or disability to the actual mistakes on her weekly claim certifications. The Commission disagreed (footnotes that cite to portions of the Disputed Claims manual on an internal DWD intranet that is not available to the public are removed):
The reason no connection was made between the employee’s learning disability and her failure to provide accurate information to the department is because the ALJ did not develop the record on this issue. It was clear that the employee did not understand her responsibility to report her second, short-term job to the department. After the ALJ twice explained to the employee why it was necessary, the employee remained confused. The employee apologized to the ALJ and stated that she, the employee, was learning disabled and “a little slow.” Not a single follow up question was asked of the employee.
The “fair hearing” provision in sec. 303(a)(3) of the Social Security Act requires a reasonable opportunity for workers whose claims are denied to be heard by an impartial tribunal in an adjudicatory proceeding which assures them of elementary fairness. An unemployment insurance ALJ is responsible for discovering the facts and may not rely on the parties to present their cases and facts, as they understand them, and to offer complete proof. Moreover, state unemployment agencies, such as the department, have a public duty to cooperate in revealing pertinent facts and other evidence that are peculiarly within their own knowledge, whether favorable or unfavorable to the claimant. A state agency is not to assume a hostile or an indifferent attitude in cases in which it views itself as an adverse party, because it leaves to the claimant the task of discovering exculpatory facts, a task claimants are most likely ill-prepared to perform. Thus, when the department alleges that a claimant has committed fraud and the claimant states that she is learning disabled, an ALJ is expected, at a minimum, to follow up on the claimant’s statement and attempt to ascertain whether any cognitive difficulties contributed to the confusion on the part of the claimant and led to an honest mistake.
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A claimant may establish the existence of learning, reading, and comprehension difficulties through non-certified and non-medical evidence by testifying, for example, as to whether he or she received special education services in school, required an individualized education plan, had low reading scores, or failed to graduate from high school.
There is much more to consider in this decision. Furthermore, it should be noted that the disabled often lack the resources and abilities to provide information about themselves or only have the ability to offer generalities rather than any specific information. Claim investigators and administrative law judges will need some sensitivity in how to delve into such matters as direct questions are unlikely to get specific evidence. Still, this decision sets forth in great detail what the Department should be doing if it wants to allege that a claimant has actually intended to conceal material information on his or her weekly claim certifications.