The push to charge concealment/fraud for mistakes when filing for unemployment is not just happening in Wisconsin. It is a national phenomena.
Here are descriptions about what is happening in two other states.
Pennsylvania
In Fugh v. Unemployment Comp. Bd. of Review, 153 A.3d 1169 (Pa. Commw. Ct., 2017) — also available here, the state’s unemployment board argued for an expansion of the definition of fault in that state’s unemployment statutes to cover non-intentional mistakes.
In this case, the claimant had her hours reduced and most of her job duties re-assigned to others. She then quit and filed a claim for unemployment benefits, listing “lack of work” as the reason for her separation. Technically, a lack of work is a layoff, so she misunderstood how to properly classify her separation. The state unemployment program, however, charged with being at “fault” for that mistake, which meant she had to repay the unemployment benefits she had initially received with interest, and the state could file liens and intercept taxes in order to recoup those unemployment benefits.
A prior Pennsylvania court decision, Cruz v. Unemployment Compensation Board of Review, 110 Pa. Commw. 117, 531 A.2d 1178 (Pa. Cmwlth. 1987), had previously held that extremely similar circumstances did not provide evidence of an intentional mistake necessary for a finding of fault. The Pennsylvania board argued that Cruz and decisions based on it were wrongly decided and that any finding of fault does NOT require either knowledge or an intent to file a deceptive unemployment claim.
In Fugh, an en banc panel of the state’s appeals court rejected this argument and explained (Fugh, 153 A.2d at 1176-7, footnote omitted):
A statute should be construed, if possible, to give effect to all its provisions. 1 Pa. C.S. § 1921(a). “[S]tatutory language must be read in context, that is, in ascertaining legislative intent, every portion of statutory language is to be read ‘together and in conjunction’ with the remaining statutory language, ‘and construed with reference to the entire statute’ as a whole.” Pennsylvania Gaming Control Board v. Office of Open Records, 628 Pa. 163, 103 A.3d 1276, 1285 (2014) (citation omitted). “Fault” is a persistent theme throughout the Unemployment Compensation Law.
For example, the Law states that it protects workers who have suffered a loss of income due to separation from employment “through no fault of their own.” Section 3 of the Law, 43 P.S. § 752; Preservation Pennsylvania v. Unemployment Compensation Board of Review, 673 A.2d 1044, 1046 (Pa. Cmwlth. 1996). Where a claimant is “at fault” for his loss of employment by reason of his willful misconduct, he is ineligible for unemployment compensation. The term “willful misconduct” is not defined by the Law, but our appellate courts have defined the term as “(a) wanton or willful disregard for an employer’s interests; (b) deliberate violation of an employer’s rule; (c) disregard for standards of behavior which an employer can rightfully expect of an employee; or (d) negligence indicating an intentional disregard of the employer’s interest or an employee’s duties or obligations.” Reading Area Water Authority v. Unemployment Compensation Board of Review, 137 A.3d 658, 662 (Pa. Cmwlth. 2016). A “fault” separation requires conduct “of such a degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of the employer’s interest or of the employee’s duties and obligations to the employer.” Id. (quotation marks omitted). A negligent act alone does not constitute willful misconduct; rather, the conduct must be of “an intentional and deliberate nature.” Grieb v. Unemployment Compensation Board of Review, 573 Pa. 594, 827 A.2d 422, 426 (2003) (citation omitted).
The Referee found that Claimant “made a mistake” when reporting “lack of work” as the reason for her separation from Employer. Referee Decision at 3. The Referee found no evidence that Claimant had wantonly disregarded the truth of the information she provided in her application. Nor was her conduct found grossly negligent. The commission of a mere voluntary act does not establish fault. Daniels, 309 A.2d at 741. The Board cannot hold a claimant liable for a fault overpayment for a mere mistake or confusion. Cruz, 531 A.2d at 1180. The Board erred in holding that Claimant’s mistake made her liable for a fault overpayment of benefits under Section 804(a) of the Law, 43 P.S. § 874(a).
The Board asks this Court to abandon the principle of stare decisis and “correct [our] prior statement of the standard required to establish a fault overpayment,” i.e ., the state of mind standard set forth in Daniels and its progeny. Board Brief at 19. Stare decisis is “the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827, 111 S.Ct. 2597, 115 L.Ed.2d 720 (1991). Indeed, our Supreme Court has explained that “stare decisis has ‘special force’ in matters of statutory, as opposed to constitutional, construction, because in the statutory arena the legislative body is free to correct any errant interpretation of its intentions.” Hunt v. Pennsylvania State Police, 603 Pa. 156, 983 A.2d 627, 637 (2009) (quoting Shambach v. Bickhart, 577 Pa. 384, 845 A.2d 793, 807 (2004 ).
We decline the Board’s invitation. Apart from the restraints of stare decisis, we conclude that our long held construction of “fault” is not in need of “correction.” It is as sound today as it was 40 years ago. The revision to the Section 804 paradigm proposed by the Board is one for the General Assembly to make. Accordingly, we reverse the Board’s adjudication, in part, and remand the matter for revision of Claimant’s restitution obligation to reflect her liability for a non-fault overpayment under Section 804(b) of the Law, 43 P.S. § 874(b).
Michigan
As previously noted here, Michigan created an algorithm for charging unemployment fraud that led many of its residents to be accused without any actual evidence from their unemployment claims. Thousands ended up being falsely accused, and, because of quirks in the on-line only notice, could no longer challenge the false accusations.
A 2016 Guardian article updates the problems these false accusations have had on thousands of people. As noted in the article, some solutions at the state level were being discussed and proposed.
Those options came to naught, however. And, a class-action law suit has run into trouble as well because it took too long for the unemployed and their representatives to figure out what was going on in order to file the class-action law suit in the first place (folks did not check their on-line UI accounts when no longer receiving unemployment benefits, and so most only found out about the fake fraud accusations when the state went to recoup the alleged fraud a year or so later). Michigan has basically adopted policies that target vulnerable residents, and then fought like hell to be considered responsible for that targeting and the resulting harm.
UPDATE (11 Oct. 2017): There is a must-read article about how administrative law judges who first noticed the fake fraud accusations and sought to call attention to the problem were attacked by state officials for such temerity. Some of the administrative law judges were even charged with being biased against the state agency for pointing out that accusations of fraud without any factual basis should not be made in the first place and then explaining to claimants their rights at their hearings when nothing was being done to stop the fake accusations.
Wisconsin Unemployment 