Concealment redefinition approved: Watch out claimants

There have been previous discussions here in this blog about the Department of Workforce Development’s concealment efforts on 27 January 2014, 28 May 2014, 14 April 2015, 15 April 2015, 26 May 2015, 23 April 2015, and numerous other posts.

On 19 May 2015, the Advisory Council approved of a redefinition of concealment that did not make logical sense — reinserting the word “intentionally” in various places of the new redefinition but stating that concealment does not require “an intent or design to receive benefits,” and shifting the burden of proof on claimants to disprove their concealment. In this redefinition of concealment, concealment was both intentional and not intentional.

At the 18 June 2015 council meeting, new concealment language was made available in Department-sponsored legislation (see pp.6-7). In this draft legislation, Wis. Stat. § 108.04(11)(g) is re-numbered (g)(1) and amended to read:

For purposes of 1. In this subsection, “conceal” means to intentionally mislead or defraud the department by withholding or hiding information or making a false statement or misrepresentation.

And, Wis. Stat. §§ 108.04(11)(g)(2) and (3) are created to read:

2. As a condition of eligibility for benefits under this chapter, a claimant has a duty of care to provide an accurate and complete response to each inquiry made by the department in connection with his or her receipt of benefits. If a claimant, in response to such an inquiry, makes a false statement or representation regarding a material fact relating to his her eligibility for benefits or regarding his or her wages earned or paid or payable or hours worked in a given week, there is rebuttable presumption that the claimant has violated par.(a) or (b), whichever is applicable. A claimant may rebut that presumption with competent evidence that the claimant did not intentionally mislead the department, but competent evidence does not include evidence that a claimant provided false or misleading answers due to any of the following:

a. The claimant’s failure to read or follow instructions or other communications of the department related to a claim for benefits.

b. The claimant’s reliance 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. The claimant’s limitation or disability, where the claimant has not brought such limitation or disability to the attention of a department employee authorized to provide service to claimants before issuance of the initial determination and has not provided competent evidence of the disability or limitation.

3. It is not a prerequisite to a finding that a claimant concealed a material fact relating to his or her eligibility for benefits as provided in par.(a) or concealed wages or hours as provided in par.(b) that the claimant has an intent or design to receive benefits to which the claimant knows he or she was not entitled.

This draft legislation is as illogical as the initially approved proposal. Concealment is still intentional, but under sub-section (3) a finding of concealment does not require any actual intent to conceal. Furthermore, the burden of proof will still be on claimants to disprove their concealment. And, folks cannot claim in their defense: (a) confusion or lack of understanding of departmental materials, (b) reliance on advice from others unless they can demonstrate that the advice was from someone in the Department “authorized to provide advice regarding the claimant’s claim,” or (c) a learning disability of some kind unless the learning-disabled claimant has the foresight to notify the Department beforehand of his or her learning disability and provide “competent evidence” establishing that disability (so, simply claiming a disability will not suffice). In other words (and as noted previously), claimants will be strictly liable for this mistakes.

A May letter to the Advisory Council illustrates these issues:

May 25, 2015

Janell Knutson, Chair Unemployment Insurance Advisory Council 201 E. Washington Avenue PD. Box 8942 Madison, Wisconsin 53708

Dear Ms. Knutson,

I have recently read the proposed law changes to Statute 108.04(11)(g) regarding the definition of “conceal” which will eliminate the word “intentionally” mislead or defraud. As a claimant who has had to pay overpayments that were not done intentionally, this concerns me.

Recently, I incurred an over-payment because my reported wages were “under reported.” I work highway construction. My pay scale is all over the place due to varied projects. For example, I worked on a county road project. As a conscientious person, I called the payroll division to clarify the wages and reported accordingly. What the payroll division didn’t tell me is that we were also paid benefitt pay. County jobs typically don’t include benefits; state highway projects do. Though this was a county road, the job was state funded. As soon as I received my pay check I called and gave correct information. If the “intent” element is removed, a claimant in my position may not realize he or she has received benefits to which he or she is not entitled, thus might be accused of concealment. Because these errors may not be discovered for a length of time, this could lead to hefty consequences for an honest mistake.

I have another personal scenario involving a friend. She had just signed up for benefits and wanted my help to access the dwd online web services. When she got onto her account, I noticed that she had reported wages of only $10. She works ten hours a week as a crossing guard and had actually earned $100. She reported these wages because she misunderstood the question. She thought that she was to report what she earned per hour and then how many hours she had worked. To my knowledge, she has never filed before. This also was an honest, understandable mistake. She also called and corrected this immediately. Had she not, it’s possible that this could have gone undetected for some time. Repayment of the monies, imposing the new penalty of 40%, and not allowing benefits until 2x her overpayment would be an excessive penalty for a misunderstanding.

I realize that fraud and concealment are major issues, but I am concerned that the passing of this proposal may deny a person their right to due process. I hope you will take my insights into consideration. Thank you for your time.

NOTE: At the June 18th council meeting, Ms. Knutson advised council members that there had been e-mail correspondence with the individual who authored the letter and that no discussion or response from the council to the letter was needed. Ms. Knutson did NOT say what her response to the letter was.

Both “mistakes” here were caught early through foresight and extreme carefulness. But, if not caught early, both situations would easily qualify as concealment, and there would be little the claimants could do to counter that accusation. A claimant who never corrected the “benefit pay” she received would be guilty of a concealment mistake even though she did NOT know at the time she filed her weekly claim that she would be receiving such wages. If she did not correct the mistake on her own, concealment would be charged because the burden is now on the claimant to prove his or her mistake was not actually a mistake she had any control over. Since she eventually knew about the benefit pay via a pay stub, the Department would likely allege that she was responsible for correcting the mistake even though she did not know about the mistake at all when she first filed her weekly claim certification.

The claimant who mis-understood her weekly claim reporting obligations by reporting her hourly wage rather than the total weekly wages she received is completely out of luck. Her mis-understanding will, by law, be excluded as any kind of explanation for her mistake. In short, the only chance a claimant will have to win such a concealment case will be to dispute the mistake ever occurred. Claiming that the mistake took place for reasons for which the claimant had no knowledge or awareness is not possible here since the claimant cannot allege that she does not know how many hours she worked or the total earnings she received for that work.