US DOL: 80 years of unemployment help

From an August 2015 post by Gay Gilbert on the 80th anniversary of the unemployment system:

Anniversaries are a chance to reflect on the work we’ve done and what we hope for in the future.  Reflecting on 80 years of the Unemployment Insurance program is especially poignant for me as the last five years (and more) have been marked by immense struggles and profound accomplishments. Our economy is recovering after the most difficult economic period in our lifetime. Millions of lives were turned upside down by rampant layoffs.

And through it all, the Unemployment Insurance system was there to lend a hand, offering support for individuals and families while they looked for a job. At a time when they needed it most, UI benefits helped put food on the table and a roof over the heads of millions of American families. 

The UI program is also credited by most economists as playing a vital role in stabilizing the economy.  The program provides money to the people who need it most and who in turn inject that money right back into the economy at a critical time. These dollars are spent on food, school supplies, rent and other vital products and services that help local employers remain in business – preventing further job losses.

And the backbone of the program are the men and women at the federal, state and local level who kept the program running smoothly – even in the face of unprecedented budget constraints and capacity challenges. They continue to be key partners as we enact reforms to develop a program that meets the needs of workers and employers in the 21st century.

And as we look to the future, we have more tools for laid-off workers that we didn’t have during the Great Recession. Recent legislation is helping to ensure that laid-off workers not only get the financial support they need, but are also connected to federal employment services to help them get back on their feet quickly. Employers also have tools like Short Time Compensation to help be avoid layoffs during temporary weak business cycles.

UI has a proud legacy and will continue to serve generations to come.

Gay Gilbert is the Director of Office of the Unemployment Insurance at the U.S. Department of Labor. 

2014 State UI Tax Info Available

From Rick McHugh of NELP:

A useful report from U.S. Department of Labor is the Significant Measures of State UI Tax Systems. The 2014 edition has been released.

One of the useful features of this report is that USDOL calculates an “Adequate Financing Rate.” The bad news in the report is that most states are under-financing their UI programs using this benchmark: meaning they will not be prepared with trust fund reserves sufficient to ride out increased benefit costs during the next recession. Forty-four states had an average UI payroll tax below their minimum adequate financing rate in 2014. Yikes!

Business climate debates dominate UI discussions in the states. (Yes, I know these are not real world discussions. Ironically, business climate is viewed as real by the same folks who do not think climate change is real.) The Significant Measures report gives advocates key information about individual states as well as comparative information presented in tables. In addition, by selecting the United States as an “individual state” you will have a ready-reference to how your individual state compares to U.S. averages.

In terms of business climate claims, many employer groups will focus on average tax rates on taxable wages. The average taxable employer paid $398 per employee in 2014. This translates to 0.8% of total wages, or 80 cents of every $100 dollars of wages. Nonetheless, using average UI taxes on taxable wages exaggerates tax levels.

The Significant Measures report gives us some basic information on the distribution of taxes that usefully shows that most employers do not pay average UI taxes. Instead a few employers (6 percent in 2014) pay taxes at the highest rate and the rest pay lower taxes, many pay close to no UI taxes. Indeed, last year 37 percent of all employers paid the lowest state tax rate available (in five states this rate was zero) and 47 percent paid a tax rate of less than 0.5 percent of total wages (or less than 50 cents for every $100 dollars of wages). In some states, I have observed that up to 70 percent of employers paid minimum tax rates in some years. This tax distribution info is not routinely shared by state agencies in my experience, making this source of information the best we have in many states.

Yes, there are states where UI taxes are higher and perhaps a half-way credible business climate case can be made there. However, overall it is difficult to make out a case that UI payroll taxes make up a significant element of business climate. In the few states with higher UI taxes, I suggest comparing UI taxes to total wages and benefit costs (according to the 2015 National Compensation survey from BLS, UI taxes were $ 0.23 of the average hourly cost of labor ($33.49) in the private sector in 2014. Or, profits. Or, health care. Or, pensions.

The first of the DWD-sponsored proposals have appeared in legislation

At the 12 October 2015 Advisory Council meeting, the council gave final approval to the following proposals:

• D15-10 — eliminating the publication of the claimant benefit tables within the statutes,
• D15-11 — changes to circuit review review previously described here,
• D15-12 — allowing the same protocols for unemployment taxes in regards to fiscal agents in adult care to apply to fiscal agents in child care situations, and
• D15-13 — ending the sunset date in 2034 for the program integrity fund (i.e., the fund for receiving some of the monies from concealment enforcement) since the Department now expects concealment monies to continue in perpetuity.

Previously, the council had approved the following Department proposals:

• D15-02 — adding the ability to issue determinations against out-of-state employers in combined wage claims for being at fault for an erroneous benefit payment to a claimant,
• D15-03 — applying the Treasury offset program to employers, as described previously in this post, and
• D15-07 — changes to how work share benefits are calculated so as to comply with federal requirements for work share programs.

With the legislature currently in session, these three proposals — D15-03, D15-07, and D15-02 — have appeared in bills AB416 and SB341. The legislature will most likely enact these provisions shortly.

Several Department proposals, however, remain in limbo or are still being debated. The council has extensively discussed D15-04 in regards to setting up essentially a backup insurance program for reimbursable employers who get their unemployment accounts swindled by identity fraud (and so have little to no hope of ever recovering the stolen benefits). The final recommendation from the council was for reimbursable employers to be taxed initially in order to create a fund of $1 million for covering themselves against identity fraud, essentially the second option of the three presented. Proposal D15-05 was to correct a hole in the statutes that accidentally left LLPs out of the definition of employer (see also this DWD memo on this issue). Appeals modernization, D15-06, continues to be discussed by council members. Perhaps the most significant change in this proposal — notice by Internet in place of postal mail — has NOT received any discussion of comment from council members, however. On the other hand, there has been no word on D15-09 — distinguishing able and available determinations from separation determinations — since this proposal was introduced at the 19 May 2015 council meeting. Finally, the proposed changes to the definition of concealment in D15-08 (described in this previous post) may be discussed again at subsequent council meetings.

Filing for unemployment? It’s a trap!

Thanks to an information request from one of the members of the Advisory Council, concealment data for the 2014 calendar year is now available. Of 21,694 initial determinations that led to appeal tribunal decisions in 2014, fully 11,040 were initial determinations that found claimant concealment. That is, nearly 51% of the initial determinations in 2014 concerned (and found) claimant concealment.

Of these 11,040 initial determinations, however, only 470, or 4.25% of the total, were appealed. Appeal tribunals overturned 216 or 46% of these 470 concealment appeals and affirmed 254 of these concealment cases. In 2014, the Labor and Industry Review Commission heard 196 concealment appeals and only affirmed 34 appeal tribunal decisions. The Commission overturned nearly 63% (123 cases) of the appeal tribunals that found concealment, and the Commission remanded 20% (23) of the 2014 concealment cases that reached it for additional evidence. That is, only 92 (34 affirmed by LIRC and 58 never appealed to LIRC) concealment decisions out of 470 appeals — i.e., 20% of the concealment appeals — were actually confirmed as concealment after review of some kind. So, while very few concealment cases are appealed, those that are appealed are usually overturned either by the appeal tribunal or the Commission.

And, given what has happened in the concealment cases the Commission has overturned — see, e.g., O’Neill v. Riteway Bus Service, Inc., UI Hearing Nos. 15600518MW and 15600519MW (28 May 2015) (“ALJ placed the burden of proving concealment on the wrong party. The ALJ stated that it was the employee’s burden to prove that there was no concealment. This is incorrect. As the commission and the department have stated for decades, the burden to establish that a claimant concealed information is on the department.“) (emphasis in original) and Dabo v. Personalized Plus Home Health, UI Hearing Nos. 14609522MW and 14609523MW (16 April 2015) (“The employee, as a non-native English speaker, missed the ‘did you work’ part of the multi-part question. It is a common mistake, one long acknowledged by the department.”) — it seems that many of the cases that are alleging concealment do not contain actual concealment.

Since less than five percent of concealment determinations are ever appealed, however, the Department has had a relatively unchecked hand in charging claimants with concealment. Unemployment claims, then, have essentially become a vehicle for alleging concealment against claimants. As they say in a galaxy far, far away:

Income tax intercepts coming to employers

Tax intercepts against claimants for recovering over-payments have been occurring for numerous years now. That is, a claimant who owes money to the Department of Workforce Development because of an over-payment has seen the Department intercept federal and state tax refunds due the claimant in order to recover that over-payment. The official name for these tax intercepts is the Treasury Offset Program, or TOP.

The 2013 budget act at the federal level required states to implement treasury offsets for ALL unemployment debts. Wisconsin has previously only applied treasury offsets for collecting claimants’ debts. To continue to receive federal grants for administering unemployment law, Wisconsin needs to make treasury offsets applicable to employers’ debts as well.

To that end, at the February 19th Advisory Council meeting the Department prepared a proposal, D15-03, for implementing a treasury offset against employers. Besides setting forth new and changed statutory language, this proposal explained:

Impact: This proposal is expected to save the Trust Fund approximately $4.3M annually via additional employer state Ul tax collections.

Summary of the Proposal: The Treasury Offset Program (TOP) is a Federal tax intercept collection tool used to collect unpaid debts owed to various government agencies. DWD UI previously implemented TOP to recover fraud and wage non-fraud overpayment debts from claimants. This proposal expands the use of the TOP program to unpaid employer contributions when personal and corporate liability can be assigned. However, the Federal government does not have the functionality to collect from corporate tax accounts at this time. The proposal is written to include corporate accounts for future enhanced Federal capabilities. Expansion of TOP is mandated by the Federal government. Fees are charged by the TOP program directly to the participant and would not affect the UI Trust Fund.

Methodology: Employer tax debt that would be certifiable for TOP is mainly debt from preliminarily closed and closed employer accounts. From 2010-2014 the average yearly amount of delinquent debt due to preliminarily closed/closed accounts is approximately $43M of which approximately 38% is recovered by Ul collections.

In 2012, TOP for claimant benefit overpayments was expanded to include fraud and non-fraud wage overpayments. From 2012—2014 the average annual amount of benefit overpayment debt certifiable for TOP was $25.2M of which approximately $12M was recovered by UI collections, or 48%.

At a 48% recovery rate, approximately $20.6M of employer debt certifiable for TOP would be collected annually. Much of the debt UI already recovered would now be collected with TOP; however, it would be collected more efficiently. Since UI can already collect approximately 38% of TOP certified debt using other collection tools, adding TOP as an additional tool would increase employer debt tax collections by approximately 10% of the certified debt annually. Ten percent of the average $43M employer debt certified for TOP would result in Trust Fund savings of approximately $4.3M annually via additional employer tax debt collections.

Note that while a federal process for applying treasury offsets against corporations is not yet in place, these treasury offsets will certainly take effect against employers whose businesses are included in their personal tax returns, such as limited liability corporations. Accordingly, the Department acknowledges that these offsets will have an immediate effect of $4.3 million in additional collections for employer debts.

At its March 19th meeting, the Advisory Council approved this proposal. As a result, it will be included in the Department’s UI bill along with other changes approved by the council. That bill should be presented to the legislature this fall or winter. So, for the 2016 tax year and perhaps for the 2015 tax year (if the bill is enacted in 2015), employers will have to face the loss of their state and federal refunds if they have unpaid unemployment taxes.

Feds release two important advisories about claimant access

On Friday, October 2nd, the Department of Labor issued two advisories — officially called program letters — about maintaining claimant’s access to their unemployment benefits.

The first concerns the due process protections claimants have when charged with concealment. In particular, this advisory spells out the requirement that whenever unemployment benefits are denied:

[T]he individual must receive a written copy of that determination and must have the right to appeal the denial. States are not required to conduct a full, formal evidentiary appeal hearing before determining that an individual was overpaid, but they must offer the individual an opportunity to know and rebut the information in fact finding before issuing a decision that the individual is not eligible and was overpaid.

UIPL 01-16 (1 October 2015) at 4. Furthermore, once a claim for unemployment benefits is underway, payment of those benefits cannot be stopped until a determination about the claimant’s eligibility has been issued.

If the state agency cannot make an eligibility determination before the date of a timely payment, the state agency “presumes the claimant’s continued eligibility until it makes a determination otherwise.” Additionally, a state must inform individuals that the pending eligibility issue may affect their entitlement to [unemployment compensation] and may result in an overpayment.

Id. And, in that investigation about the claimant’s continued eligibility for unemployment benefits, the unemployment agency must independently verify any computer match information casting doubt on the claimant’s continued eligibility, notify the claimant about the doubts on his or her continued eligibility, and give the claimant time to respond to the accusation.

States may not make determinations of overpayments and/or fraud using automated systems without the input of agency staff. The individual must also be informed of the information received as a result of the match with the Federal database and given the opportunity to be heard before a determination of an overpayment may be issued.

Id. at 5. This specific statement that fraud determinations CANNOT be based on automated systems seems specifically targeted against the fraud by algorithm process currently taking place in Michigan. The advisory closes with the requirements needed for any fraud notice.

[A] fraud determination notice must be sufficient to allow the individual to know the potential penalties or other consequences of a fraud determination as well as his or her rights with respect to an appeal. The individual must be provided additional information on the appeal process including the right to have representation; to present testimony and other evidence relative to the appeal; to subpoena witnesses and records; and to be apprised of the consequences of failing to attend an appeal if one is requested. Communications must be in plain language and using methods that ensure the communication is most likely to be successful for all populations, including individuals with limited English proficiency.

Id. at 6. Given the push in Wisconsin for pursuing concealment charges against claimants for claim-filing mistakes, this advisory applies with equal force to Wisconsin.

The second advisory concerns preventing program discrimination because of age, national origin, or language proficiency and making sure that new, computerized filing and notification procedures are as user-friendly as possible. This lengthy memorandum begins by spelling out the legal requirements for open access to claims information.

[S]tate UI agencies must ensure that use of new technologies and systems for administering UI programs and providing services do not create barriers (e.g., procedural, technological, or informational) that may prevent individuals from accessing UI benefits, such as by denying them a reasonable opportunity to establish their eligibility. The U.S. Department of Labor (Department) has determined that “access” for purposes of conforming to Section 303(a)(1) of the [Social Security Act] means individuals’ ability to complete, submit, and obtain information about their initial and continued claims, appeals, reemployment services, and any other information, program functions, or services available for all claimants.

* * *

Thus, while states may offer claimants a variety of methods to receive information, the content of a written determination, whether it is a letter mailed to the claimant or provided in an electronic medium, must comply with the requirements in the Standard for Claim Determination specified [in Employment Security Manual, Part V, Section 6013.C.1.c.].

UIPL 02-16 (1 October 2015) at 3-4.

Electronic-only communication requirements may well run afoul of these non-discrimination requirements.

The nondiscrimination laws that apply to state UI agencies prohibit discrimination based on both disparate treatment — intentionally treating members of protected groups differently based on their protected status — and disparate impact — the use of policies or practices that are neutral on their face, but have a disproportionate impact on members of some protected groups. In addition, as detailed below, regulations implementing these laws prohibit states from establishing policies or procedures that, while not directly barring access to benefits or services for individuals who have disabilities and/or are [Limited English Proficient], indirectly prevent or limit access. The use of a website and web-based technology as the sole or primary way for individuals to obtain information about UI benefits or to file UI claims may have the effect of denying or limiting access to members of protected groups in violation of Federal nondiscrimination law.

* * *

States may offer individuals the option of receiving the information, services, etc., discussed in this guidance via electronic methods, but may not require that individuals communicate only through electronic means. Such policies unduly restrict program access, as not all individuals have the ability or capacity to communicate electronically.

Id. at 4-5. This advisory then goes into detail about what these non-discrimination requirements mean and describes the numerous steps that state agencies need to take. Of particular note are the following requirements and objectives:

Use of free, web-based translation services (also known as machine translation software) is not sufficient to ensure that the translation is appropriate and conveys the same meaning as the English version. Information about effective translation resources may be found at: [Lost in Translation.]

* * *

State UI agencies should also ensure that web-based claims filing systems also maintain a system for receiving and addressing complaints from limited English proficient persons and persons with a disability. This includes, but is not limited to, providing in-language notice regarding how to file an online complaint about delayed or denied service resulting from language barriers.

* * *

States may promote on-line filing as a primary method of filing UI claims, but they may not have policies and operational practices that make on-line filing the exclusive method of filing and certifying UI claims. As with persons with disabilities or those with [Limited English Proficiency], or older individuals, states must offer an alternative option for accessing information and benefits, such as by telephone and/or in person, in a manner that ensures equal access for persons unable to access or use a web-based system in order to avoid disparate impact on other protected groups. Further, states must broadly and conspicuously disseminate information about alternative access options in ways that ensure that people who may need to use such options are aware of the options. State UI agencies must ensure that use of new technologies and systems for administering UI programs and providing services do not create barriers (e.g., procedural, technological, or informational) that may prevent individuals from accessing UI benefits, such as by denying them a reasonable opportunity to establish their eligibility.

* * *

State UI agencies must also take reasonable steps to ensure that, if technology or other issues discussed in this UIPL interfere with claimants’ access, they have established alternative methods of access, such as telephonic and/or in-person options. The alternative access points must be communicated clearly in a manner that reaches the population that may need to use them. The processes the state UI agency uses to offer alternative methods of access must be documented in the agency’s policy documents and operating procedures. In addition, a state must train UI and American Job Center staff on the alternative methods of access to ensure that claimants and others who experience challenges are properly directed to alternative access options so that they may be served in a timely manner. Excessive delays experienced by potential claimants as they are referred to alternative access methods can result in a denial of access to services, in conflict with Federal UI law and nondiscrimination law requirements.

* * *

Action Required. State Administrators must:

1. Ensure that processes exist or are implemented to provide all claimants access to UI benefits as discussed in this UIPL;
2. Disseminate this guidance to appropriate state agency staff, including the state’s [Equal Opportunity] Officer;
3. Ensure that state [Equal Opportunity] Officers are involved early in all appropriate information technology modernization and business process reengineering plans to promote the full integration of equal opportunity requirements into agency technology plans; and
4. Work with state [Equal Opportunity] Officers to evaluate the avenues available to the public to participate in the UI process to help ensure access to everyone including individuals with disabilities and [Limited English Proficient] individuals.

Id. at 9, 10, 12, 13, and 14.

The recent developments in Florida and the push in Wisconsin for similar obstacles to filing unemployment claims have been going on for some time now. See, e.g., the posts about job searches changes and waivers. These advisories, however, demonstrate for the first time that federal authorities are pushing back. Stay tuned to see what happens next. The National Employment Law Project has declared: “By staking out a strong enforcement position in support of fairness and accessibility, we believe that the Department [of Labor] has taken a critical first step toward ensuring that unemployment insurance will be there when America’s workers need it, no matter who you are or where you live.”

NELP releases scathing report on Florida unemployment

On September 22nd, the National Employment Law Project released a report about a rapid decline in unemployment claims in Florida. In 2011, Florida enacted a series of restrictions on claim filing and in 2013 launched a new claims-filing system called CONNECT. The result: in 2014, just 12% of jobless Floridians received unemployment benefits, the lowest rate of recipiency in the nation (tied with South Carolina). For instance, a chart in this report shows a sudden and significant drop starting around the middle of 2011, when new claim-filing protocols went into effect, and then accelerating the decline in first payments relative to the national average.

“Ain’t No Sunshine: Fewer than One in Eight Unemployed Workers in Florida Is Receiving Unemployment Insurance” at 6. Some of the new filing requirements Florida instituted and eerily similar to what Wisconsin is doing. Florida’s claim-filing requirements, for instance, include:

• An initial skills assessment consisting of a 45-question test to be completed online as part of the initial claim process; (Note: In 2014, the Florida Legislature acted to make the skills assessment voluntary and removed participation in the assessment process as a condition of benefit eligibility.)
• A requirement that UI claimants register for work electronically on the “Employ Florida Marketplace” as a condition of benefit eligibility, including completion of a “background wizard” (another detailed online application in order to qualify for a first benefit payment) and an online resume; and
• Detailed documentation of five employer contacts per week on weekly claim certifications filed electronically as a condition of weekly eligibility.

Id. at 3. These requirements, among others, led the US Department of Labor in 2013 to issue a lengthy and detailed probable cause finding that Florida was discriminating against claimants because of their national origin and their lack of proficiency with English. Unfortunately, Florida rejected these findings and, as evidence from this report, seems to have doubled down on putting up obstacles to making a successful unemployment claim. As the report concludes:

Florida has imposed a series of burdensome process requirements and technological obstacles so severe that unemployment insurance is virtually inaccessible for the average jobless Floridian seeking benefits earned through their work histories. Instead of remedying this problem, the implementation of the CONNECT system appears to have made the situation worse. And for the small share of jobless workers who do receive benefits, the limited weeks available have proven to be inadequate time for most to secure suitable new employment.

A program in which the number of disqualifications for reasons relating to availability, work search, and procedural reporting requirements exceeds the number of first payments is not unemployment insurance; it is an obstacle course. And the steep decline in Florida initial claims over the past four years (by 44 percent compared to 32 percent nationally) strongly suggests that these obstacles are discouraging unemployed workers from filing for unemployment insurance.

The federal government funds administration of the unemployment insurance program, and federal law establishes standards with which states must comply to ensure qualified unemployed workers can access benefits and are not unfairly denied. The State of Florida is thwarting the fundamental rights of unemployed workers to apply and qualify for unemployment insurance. An insurance program that pays benefits to fewer than 4 in 10 unemployed workers who apply and fewer than one in eight jobless workers in the state can hardly be called insurance. Unemployed Floridians struggling to make ends meet until they get that next job deserve a UI system that is fair and accessible. The Social Security Act was intended to hold state unemployment insurance programs to standards of fairness and accessibility. There should be no exception for Florida.

“Ain’t No Sunshine: Fewer than One in Eight Unemployed Workers in Florida Is Receiving Unemployment Insurance” at 8.

Work search waivers now limited

When the new job search requirements went into effect, this e-mail message to state representatives and senators went out.

From: Dernbach, BJ – DWD
Sent: Monday, June 15, 2015 5:06 PM
Subject: FYI: Changes to Unemployment Insurance Worksearch Waiver

Dear Members:

Starting this week, the Division of Unemployment Insurance (UI), in order help more UI claimants transition back to employment quickly and meet employers’ demand for talent, will revise its current system of waiving work-search requirements for claimants who expect recall from their employers.

Highlights of the revisions include:

• Claimants who expect recall by their employer may seek a waiver of the weekly work-search requirement for an 8-week period that can be extended for a maximum of 4 additional weeks with verification from the claimant’s employer. Currently, waivers are approved through the end of a benefit year for a claimant who is not recalled.

• The weeks of Thanksgiving, Christmas, and New Year’s will no longer be automatically waived for work search.

• Claimants who will start work with a new employer within 4 weeks will  need to provide employer verification in order to obtain a work search waiver.  Employer verification is not currently required in these cases.

• Claimants working part time for a customary employer (an employer for which the claimant works for more than 4 weeks or the claimant worked at least 32 hours during a given week) will have their work search waived, but will be required to register with Wisconsin Job Service through JobCenterofWisconsin.com and build a Job Match Profile.  This requirement is not currently in place for those with work search waivers.

These changes implement revisions to Chapter 126 and 127 of Wisconsin Administrative Code that the Legislature requested during the most recent legislative session.  DWD has now put in place the technology and operational framework to carry out these new requirements.

As you are aware, UI claimants must be able to work, be available for work, and conduct a search for work when required. While the work search requirement may be waived when certain conditions are met under state law, such waivers are the exception, not the rule.  You also find more information about the work-search waiver online at  http://dwd.wisconsin.gov/uiben/.

We will proactively notify affected claimants about the changes but also wanted you to be aware in the event you receive constituent inquiries.  As always, please don’t hesitate to contact me with any questions.

BJ Dernbach
Legislative Liaison
Department of Workforce Development
201 E. Washington Ave.
Madison, WI 53703

Changes to unemployment venue now and in the future

In DWD v. LIRC, 2015 WI App 56 (“Froehlich,” after the claimant at issue in the case), the Department filed an unemployment appeal case in Milwaukee County even though none of the parties resided in that county.

Normally, unemployment cases in circuit court must be brought in the county where the claimant or the employer (i.e., the plaintiff in the case) resides. But, the Department also has the ability to appeal any LIRC decision even if the parties to that case do not. And, in Froehlich, the Department did just that. Under Wis. Stat. § 102.23(1)(a), when the Department of Workforce Development is the appealing party, venue is in “the county where the defendant resides.”

Typically, when a claimant or employer appeals a LIRC decision in the wrong county, the Commission immediately moves to dismiss the action for lack of venue. And courts routinely grant such motions, ending the unemployment appeals before the merits of the case are ever addressed.

But, in Froehlich the Department was the appealing party, and the Commission did not immediately move for dismissal. Instead, the Commission said it was willing to agree to venue in Milwaukee County subject to what other parties wanted and the circuit court’s permission. For some reason, the Department did nothing. When additional Department appeals were filed in numerous other cases throughout Wisconsin (and again in counties where no defendants resided), the Commission moved to dismiss Froehlich. The circuit court granted that request, and the Department appealed that dismissal to the appeals court.

NOTE: In the past, when the Department appealed a Commission decision because of a fundamental disagreement with the Commission over the meaning of unemployment law, the Department filed those appeals in Dane County, where the defendant Commission resided.

The court of appeals held that dismissal was NOT warranted in Froehlich because the Commission had accepted jurisdiction in Milwaukee County and the other defendants never objected to venue in Milwaukee County. Since the active parties to the case — the Department and the Commission — had indicated that Milwaukee County was a proper venue, dismissal for lack of venue was improper. But, the case was still remanded to the circuit court to determine whether it would agree to jurisdiction, and the appeals court strongly hinted to the circuit court that it should agree. See n.4 in Froehlich.

The end result in Froehlich is that a wrong venue no longer leads to automatic dismissal, at least when the Department is the plaintiff. Whether Froehlich might also lead to claimants and employers being able to keep their cases alive despite filing in the wrong venue remains an open question. But, a colorable claim is now viable that such cases should NOT be dismissed but remain either in the county where filed or transferred to another county where venue is proper before any dismissal for lack of venue takes effect.

For its sake, the Department is not sitting on its laurels. At the September 17th Advisory Council meeting, the Department presented a new proposal to create a new unemployment venue provision, D15-11. In place of Wis. Stat. § 102.23, a new Wis. Stat. § 108.09(7) is created and which includes a host of changes to how unemployment appeals will be handled in the future. These changes include:

• Who is a party — Under new 108.09(7)(c)1, “every other party to the proceedings before the commission shall be made a defendant.” So, the parties of interest from workers’ compensation precedents no longer have to be included.
• DWD is a required defendant — Under new 108.09(7)(c)1: “The department shall also be made a defendant if the department is not the plaintiff.” So, copies of complaints and summons have to made for the Department in every unemployment case. And, the Department explained to the Advisory Council that it will most likely file a routine answer in all of these appeals. Moreover, the Department may decide to take an active role in some cases. Certainly, if the Department does not receive its summons and complaint, expect a motion to dismiss from either the Commission or the Department for failing to serve a necessary party. See also new 108.10(4). At the very least, this new provision will make unemployment appeals that much more expensive, especially for large employers involved in numerous unemployment cases.
• Commission excluded as a defendant for purposes of venue — Under new 108.09(7)(c)2: “if the plaintiff is the department, the proceedings shall be in the circuit court of the county where a defendant, other than the commission, resides.”
• Proceedings in any court — Under new 108.09(7)(c)2: “The proceedings may be brought in any circuit court if all parties appearing in the case agree OR if the court, after notice and a hearing, orders.” So, the parties can agree to venue in a court whether or not that court agrees to venue. Or, a court might order the parties to file in another venue or accept venue itself if one of the parties disputes venue (and, as noted below, the court will have no reason for declining venue).
• Lack of venue is NOT lack of competency — Under new 108.09(7)(c)2: “Commencing an action in a county in which no defendant resides does NOT deprive the court of competency to proceed to judgment on the merits of the case.” In other words, the Department can file its own unemployment appeals in any county it wants, regardless of whether the claimant or employer have any connection to that county whatsoever.
• A 60-day time limit for submitting the record to circuit court is mandated. See new 108.09(7)(c)5.