Advisory Council meeting — 17 Jan. 2019

After a break for the November elections, the Advisory Council met on January 17th to meet the new secretary, Caleb Frostman, and review events of the last few months.

The financial report was eye-popping and will be addressed in its own post. Here is what was covered outside of the financial report.

Mis-classification of employees

Mike Myszewski reported on the Department’s efforts in preventing the mis-classification of employees.

Note: These reports continue to be made orally and have NEVER appeared in writing. Given the Department’s annual report on alleged claimant fraud and the numerous charts and reports on alleged claimant fraud that appear at these meetings, it begs the question why the Department cannot at a minimum put down on paper in some way what it is doing to combat alleged employer unemployment fraud.

In any case, given that this report consists entirely of what was said, some of my numbers may be off. In addition, the exact nature and scope of this data is unknown, as this data is simply not available to the public and the Advisory Council apparently does not ask for it.

Mr. Myszewski reports that the Department has recovered $2.1 million in unemployment taxes from employers because of mis-classification for 1222 employees, or about $347 per mis-classified employee.

This recovery arose from 511 investigations in the last fiscal year, and there had been 145 investigations so far in the current fiscal year.

There were NO questions from the Advisory Council about this report.

The 15 Nov. 2018 public hearing

As compared to the public hearing in November 2016 in which there were 300+ comments from 295 individuals, at the 2018 public hearing there were only 21 comments in toto. Given these few comments, the summary presented to the council at this meeting included not only a summary but the actual 21 comments that were made.

Not surprisingly, work search waivers were again the hot topic. Here are some of those work search comments as well as others:

Karen, HR manager

“Moving onto the standpoint of someone who worked for UI, I think that customer service should be more of a priority for claimants and employers alike, but especially claimants. I get that there are some people that play the system, but overall, the claimants are not the enemy. The poor customer service is evidenced by the outrageous wait times when claimants call in, (but the employer hotline is answered in a couple of rings), not being clear on the number to call to get assistance, not posting the adjudication centers’ phone numbers or street addresses, and the legalese that is not easily understood by the average person in documents (which would not present as much of a problem if the claimants could easily contact someone who could help explain it to them).”

Krista, claimant

“[After describing various education and training actions that should count as job searches:] I understand that the State wants people off UI and back onto to work as soon as possible, but sometimes education and building of new skills are needed before people can do that. Just because it isn’t an application to a job, it does not make these actions any less of a job search function.”

Anonymous

“[After requesting that property liens that the Department uses for its debt collection efforts no longer be visible to the public via court records, she explains:] I have my Masters degree in Business. I have an undergraduate degree in Nursing. The ridiculous time consuming hoops I jump through to ‘prove’ I’m looking for a job are ridiculous. $370/wk doesn’t cover my bills and no one is looking harder for my job than me. As opposed to making people sit in some 4 hour class — where I can assure you that people like myself who have been working since 14 will get nothing from it.”

United Migrant Opportunity Services

“Over 11,000 claimants were accused of concealment in 2014. When appealed, over 70% were overturned, and another 8% remanded, It would appear that the Department is alleging concealment in many cases where a more thorough review of the evidence does not support that finding.”

Scott, building services employer

Unemployment benefits should be limited to 4 to 8 weeks. [Note: Currently, claimants are eligible for up to 26 weeks of benefits, and winter usually lasts a minimum of 14-18 weeks for those who go through seasonal layoffs.]

Tawana, claimant

She is upset with: (1) having to wait 21 days for an adjudicator to be assigned to her case and (2) the extremely limited access to phone support when the number of unemployment claims are much less than what occurred in 2010, when she last filed for unemployment benefits.

Soraya, claimant

Upset with having to wait 21 days for a decision on her claim.

Sarabi, claimant

The penalties for unemployment concealment are much too harsh.

Robin, claimant

Get rid of work search requirements for employees who experience seasonal layoffs and return to the same employer and eliminate the waiting week.

Sandy, claimant

Get rid of work search requirements for employees who experience seasonal layoffs.

Kyle, claimant

Get rid of work search requirements for employees who experience seasonal layoffs.

Tasha, employer

Get rid of work search requirements for employees who experience seasonal layoffs. And, the claim-filing process is extremely difficult for the employees handling snow removal during the winter months.

Bill, employer

Get rid of work search requirements for employees who experience seasonal layoffs. For employers in Northern Wisconsin, work searches during winter months are a waste of time for both employees and employers, as there no jobs available then.

Deborah, employee

End the ban on unemployment benefits for those who are working while also receiving SSDI benefits. [Note: the Department currently eliminates unemployment benefits because these claimants have a disability that qualifies them for SSDI benefits. Wisconsin is the only state to have instituted this ban. Other states have only applied an offset to unemployment benefits for the SSDI benefits being received.]

Nadine, employer

Get rid of work search requirements for employees who experience seasonal layoffs and return to the same employer. She explains: “Our seasonal employees are returning to our business which they have been at for several years!! Why take the chance with this job-search stuff, which we could lose our valuable employee that we rely on returning. Now days’ finding someone to work is very hard.”

Richard, employee

Get rid of work search requirements for employees who experience seasonal layoffs and expect to return to the same employer year-in and year-out,

Avis, claimant

Complaining about being denied benefits because a medical disability limits work availability. *Note: the description offered presents an obvious violation, as claimants are still eligible for unemployment benefits when work availability is limited to part-time work only because of a medical condition. See CITE.

Hawks Quindel law firm

Undo the damage to the unemployment system created in DWD v. LIRC (Beres), 2018 WI 77, 382 Wis.2d 611, 914 N.W.2d 625, that allows an employer to discharge an employee for a single absence (regardless of why the employee was absent) as misconduct and end the work search requirements for employees who undergo seasonal layoffs and expect to return to the same employer.

Heidi

After presenting numerous ways to make job search information more user-friendly to claimants, she requests that job search criteria be expanded to include the actions claimants actually need to undertake when searching for a new job — such as networking events and informational interviews — and for the Department to allow training opportunities that currently prevent claimants from receiving any unemployment benefits.

Lame duck legal changes

The Department included a one-page memorandum regarding the lame duck changes enacted via 2017 Wis. Act 370. The last sentence of the memo provides all the description that is needed:

Because Act 370 codified current administrative rules and Department practices, claimants and employers should not expect any changes to the unemployment insurance program under this Act.

So, Republican legislators have taken ownership of the job search requirements that nearly no one — I repeat, nearly no one, if the public comments in 2016 and again in 2018 are any indication — thinks are doing anything useful except to make unemployment claims more difficult. Everyone in rural Wisconsin should be asking their state representative and senator why — WHY — they think these job search requirements make sense.

Next steps

The Department indicated that its own proposed changes to unemployment law will be introduced at the February meeting of the Advisory Council (why the Department continues to introduce its own substantive changes to unemployment law remains a mystery ever since the Department proposed its own substantive changes to unemployment law in November 2012).

Scott Manley of Wisconsin Manufacturers & Commerce also made two research requests. First, he wanted the Department to revisit its definition of independent contractor work in light of growing employment through TaskRabbit, Mechanical Turk, and other on-line business operations.

Note: the Labor and Industry Review Commission has already determined that a Lyft driver is NOT an employee for the purpose of unemployment benefits. See Ebenhoe v. Lyft, Inc., UI Hearing No.16002409MD (20 Jan. 2017). Currently, Lyft’s responsibility for paying unemployment taxes is being litigated. See Lyft, Inc., UI Hearing Nos. S1500424MW and S1800091MW (26 Oct. 2018).

Second, Mr. Manley wanted to know what the Department could do to expand its program integrity efforts for bringing criminal charges against claimants for their alleged unemployment fraud. For how the criminal charges that have already been filed are hugely disproportionate according to the race of claimants (75% of the cases are against African-Americans), see this post.

Mark Reihl of the Carpenters made a third request. He wanted a comparison of how Wisconsin’s weekly benefit rate (the average received and the maximum available) compare to the other fifty states and territories.

Note: Wisconsin’s maximum available weekly benefit rate is $370. The average weekly benefit being paid out in 2017 was $317.14. See this 2017 4Q report (this data is for all fifty states, Wisconsin is on p.64 of the pdf). Data for the 3Q of 2018 indicates that the average for the last four quarters was $320.03. The average duration of unemployment benefits for these last four quarters was 12.7 weeks. See p.63 of the pdf for this data.

Data on the financing for all fifty states for 2017 (the most recent year available) can be found here (Wisconsin is on p.60 of the pdf).

Unemployment benefits for federal workers during the shutdown

The Department of Workforce Development released the following notice yesterday:

Wisconsin ready to assist furloughed federal employees
Workers can access unemployment funds during partial shutdown

MADISON — Federal employees in Wisconsin can apply for unemployment benefits to help meet their financial needs while they wait for work to resume.

“We are ready to assist any federal employee that is facing a lack of work and income due to the partial shutdown,” said Department of Workforce Development Secretary Caleb Frostman. “Furloughed federal workers are dislocated workers, unemployed through no fault of their own and can apply for unemployment.”

Federal employees can apply for unemployment through DWD’s online UI benefit system at my.unemployment.wisconsin.gov.

Because many federal offices are currently closed, furloughed workers should be prepared to provide wage verification in the form of pay stubs or a W-2 form as DWD may be unable to verify wages through the employer.

Federal workers that are working full time but are not being paid during the partial shutdown are not eligible for unemployment benefits.

There are more than 29,000 federal employees in Wisconsin. Per preliminary counts, DWD’s unemployment division fielded roughly 426 total initial and continued unemployment compensation claims between Jan. 7 and Jan. 11, 2019.

As required by law, workers who receive back pay should plan to repay any unemployment benefits received.

Several issues need pointing out, however.

First, federal workers are finding it difficult to impossible to actually file unemployment claims. On-line claims (the only method allowed for filing an unemployment claim) are being rejected without an explanation that the worker understands. And, phone calls to get an explanation are limited to certain days of the week, and those days are connected to a worker’s social security number. Miss that day, and you have to wait several other days or maybe even a week to try again with a phone call.

Note: For example, after two minutes of voice menu choices and prompts, I learn that I need to call back on Monday, Wednesday, or Friday, as Tuesday is not my designated day according to my social security number if I want to ask someone a question about the claims-filing process.

Second, the on-line claims process (the last time I had access) does not contain a category for govt shutdown. These workers are not laid off. They have not been discharged either or let go for performance-related reasons. They could indicate that they are locked out, but I do not think that reporting category exists. And, the kind of questions being asked can lead to claims being summarily rejected. For instance, a federal worker could easily report he or she is still eligible for work with his or her federal agency. Answering yes to such a question would automatically mean no eligibility for unemployment benefits because the separation seems to be a voluntary quit by the employee.

Third, given the Department’s eagerness to charge concealment for non-intentional claim-filing mistakes (including in 2018 alleged mistakes in reporting the reasons for the employee’s separation from employment). So, an employee might indicate he or she is laid off and start collecting benefits because of the shutdown. The Department may later conclude, however, that this layoff “reason” is incorrect and then charge the claimant with unemployment fraud for intentionally providing misleading information on his or her unemployment claim (and even when the mistake was actually unintentional).

Note: for a full description of the unemployment concealment issue, see this expert report I prepared for a case of a claimant charged criminally for the kind of unemployment concealment allegations that the Labor and Industry Review Commission routinely dismisses.

Fourth, any federal workers with second jobs, while still eligible for unemployment benefits, MUST make sure to report wages and hours from those second jobs. Under-reporting those numbers will automatically be considered by the Department to be fraudulent. So, any wages or hours from a second job should be OVER-reported to avoid a fraud charge down the road.

Fifth, you will need to do four job searches a week and many other tasks to remain eligible for unemployment benefits. For how to handle those job searches and other unemployment filing matters, make sure to review these tips for filing unemployment claims in Wisconsin.

Finally, when/if the shutdown ends and if/when missing wages are repaid, you will need to immediately contact the Department about re-paying unemployment benefits. If you wait for the Department to contact you, expect to be charged for unemployment concealment.

So, as repeatedly said here, unemployment is purposefully difficult to impossible to receive and everyone should avoid unemployment benefits unless you have no other options. The on-line system is designed for the benefit of the Department — not you — as a way to catch a mistake on your part. As obvious, these hoops and obstacles for filing unemployment claims are part of a larger economic change underway in this state the past several years. Until there are significant changes in the unemployment system in Wisconsin, you need to be as careful as possible and understand that the Department is always looking for a reason to disqualify you or charge you with concealment if you do end up receiving unemployment benefits.

UPDATE (17 Jan. 2019): Another problem appears for federal employees — having the wages to qualify for unemployment benefits in the first place. Because of the shutdown, federal agencies are not responding to inquiries from state unemployment agencies about verifying employees’ wages. As a result, employees need to produce pay stubs going back a year or more to establish the wages paid out for various quarters. The catch: access to the pay stubs is usually only available to employees when at work using their computers.

A January 15th press release from the House Committee on Ways and Means has the details:

Neal Calls on Secretary Acosta to Help Furloughed Workers Access Unemployment Insurance

WASHINGTON, DC – Today, Ways & Means Committee Chairman Richard Neal (D-MA) sent a letter to Department of Labor (DOL) Secretary Alexander Acosta calling for guidance to be issued that would ensure that states can provide federal workers not being paid during the government shutdown with Unemployment Insurance (UI) benefits. Roughly 800,000 federal workers are furloughed without pay due to the shutdown, and President Trump has stated that this impasse could persist for many more months. Unemployment Insurance would  help furloughed workers make ends meet and pay for necessities as the shutdown continues. “During the shutdown in 2013, the Department of Labor moved quickly to make sure this lifeline was available to workers, issuing guidance to state workforce agencies about helping workers access UI benefits, 10 days after the shutdown cut off their pay,” wrote Chairman Neal. “Twenty-four days after the shutdown began, your department has not issued similar guidance to help federal workers navigate this crisis. Indeed, many states are working hard to help these workers, but the lack of guidance and leadership from DOL has impeded their progress.” Certain UI eligibility requirements – for example, that recipients be actively searching for new jobs, and that they obtain proof of eligibility directly from agencies – can be waived when workers are furloughed or are expected to return to their jobs without pay. However, Chairman Neal pointed out that without guidance on this matter from DOL, “we are hearing reports that some workers have been unable to access benefits, and without guidance, states may not be able to use the flexibility in federal law.” Mr. Neal also raised his concern that as the shutdown drags on, DOL does not act, and more furloughed workers are called back to the office, “this Administration is simply forcing more and more federal workers to return to their work stations without pay or UI benefits.” Lastly, Chairman Neal pointed out that “the need for unemployment benefits caused by the shutdown will, in the short run, have a negative impact on unemployment trust fund balances, which are already dangerously low in a number of states.” He asked that Secretary Acosta respond and explain “what harm the shutdown is doing to state unemployment insurance trust funds in the short run, whether that impact is triggering tax increases for employers to fund the shortfall, and how you plan to work with states to remedy that harm in the longer term.” Full text of the letter is available HERE.

As obvious from this press release, the Dep’t of Labor is simply dropping the ball on a host of issues and so adding additional hurdles for federal employees trying to claim unemployment benefits when out of work through no fault of their own.

UPDATE (23 Jan. 2019): For more information about the problems federal workers are having in filing their unemployment claims and actions states can do to ease that claim-filing, see this posting by Andrew Steiner of The Century Foundation.

Note: There is typo in the article. The governors who want the federal govt to pass legislation to allow unemployed federal workers to receive unemployment benefits even when called back to work for no pay are from Michigan, New York and Washington, not Wisconsin.

 

DWD and LIRC continue to ignore court precedent on substantial fault

After the Supreme Court decision in Operton v. LIRC, 2017 WI 46, and an appeals court decision in Easterling v. LIRC, 2017 WI App 18, the Department of Workforce Development took no action to change its practices and follow these binding court decisions. Accordingly, parties needed to appeal their initial determinations in order to get unemployment law to be followed.

It is becoming apparent, however, that numerous appeals are now needed to get unemployment law to be followed whenever claimants are involved. Marilyn Townsend, Operton’s legal representative, just won an unemployment case in circuit court where DWD and the appeal tribunal not only continued to ignore Operton in an almost identical situation — namely a charge of several inadvertent errors by the employee — but the Labor and Industry Review Commission affirmed a finding of substantial fault by adding alleged warnings for which there was NO evidence in the record. As the circuit court judge explained (emphasis supplied):

The stated reasons for discharge were allegations that there were receiving issues on three separate dates in January of 2018. The store’s witness said he was only familiar with the incident that occurred on January 13th. The employer must prove the allegations upon which the discharge was based. Standing alone, this court does not believe that the January 13th incident [concerning a document mis-match between inventory and an invoice] is substantial evidence of substantial fault.

The plaintiff stated that she believed two pieces of paper merely stuck together and that is the reason the invoice was not scanned properly. She realized on the same day that an invoice could not be matched to the inventory and the [employer] witness (Ovsak) said she came to him and explained the problem. Apparently the problem was resolved when they received another invoice from the supplier on the following Monday.

There is no argument or claim that the plaintiff did anything intentionally wrong. In fact, she discovered her error and reported it to her supervisor. It appears that the incident was an inconvenience for the employer, but nothing more. The Commission agreed with the ALJ that the employee’s conduct did not rise to the level of an intentional and substantial disregard of the employer’s interest. There is no evidence that this single act was anything but an inadvertent error.

* * *

The Commission modified the decision to of the ALJ to fit the conclusion the ALJ wanted to reach. It decided that the January 13th incident, along with three prior coaching incidents during the second half of the fall of 2017, served as the reasons for discharge. Specifically, leaving a receiving door unlocked in August of 2017, an alleged incident of being belligerent and speaking with a raised voice on November 9th, and failing to accurately count some DVD’s on November 22th. The plaintiff says those earlier coachings are not relevant in determining whether the discharge after those coachings was for substantial fault where the employer has failed to prove the subsequent allegations that actually prompted the discharge.

The employer offered no proof at all of two of the three grounds alleged in the discharge document. While it offered proof that the January 13th, 2018 incident occurred, that act in the opinion of this court was not evidence of substantial fault. The Wisconsin Supreme Court has ruled that careless conduct does not equal substantial fault. Operton v. LIRC, 2017 WI 46, 375 Wis.2d 1.

The Commission relied on the prior coachings in 2017 as well as the January 13th incident to justify the finding of substantial fault. . . . the mere fact that [the Commission] did indicates that the Commission felt it necessary to essentially correct and bolster the findings of the ALJ in order to try and justify denying the plaintiff benefits.

Those prior coachings appear to be unrelated to the action on January 13th. They appear to be minor infractions and they did not lead to a dismissal standing on their own. The Commission cannot create evidence of substantial fault by adding the prior unrelated coachings to the January 13th incident.

So, now not only is DWD ignoring Operton, but administrative law judges at the Department’s hearing offices are also ignoring Operton. And, the Commission is also now ignoring Operton and seeking to get around Operton by adding arguments and connecting evidence in ways that the record obviously does not support.

The Department and the Commission are supposed to be NEUTRAL entities that are supposed to assess the evidence presented by employers to meet their heavy burden of persuasion in order to disqualify a claimant from receiving unemployment benefits when misconduct or substantial fault have occurred.

What this case illustrates is that the Department, the hearing offices, and the Commission are ignoring these obligations and instead looking to disqualify claimants on nothing more than whim and pretense, even when courts have directly told them otherwise.

Given the hundreds to thousands of people who apply for unemployment benefits every week in Wisconsin, it should in NO way require an attorney well-versed in the intricacies of unemployment law take an appeal into court simply so that unemployment law might be followed. An initial determination, a hearing before an administrative law judge, and an appeal to the Commission all failed in this case to follow clear and unmistakable black letter unemployment law.

An employee having to take up an appeal to circuit court and find an attorney for that appeal for the sake of simple justice in an unemployment case is in practical terms not possible for the hundreds and thousands seeking unemployment benefits every week of the year in Wisconsin. Something is fundamentally wrong when claimants have to go to such lengths simply to get the unemployment benefits due them if the law had been followed in the first place.

Note: Links to the appeal tribunal and LIRC decisions will be added.

Skills gap for the unemployed more wishful thinking than reality

Matthew Yglesias has some news about the latest in labor market research. Those who were applying for jobs and having to go through three to five rounds of interviews and be an absolutely perfect “fit” for the job already know the answer: the skills gap is more myth than reality.

Now, there is some cutting edge research from economists to back up that story. The takeaway of this research:

employers responded to high unemployment [during the recession] by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again.

What folks need to start paying attention too, however, is how national job numbers are covering up a TON of variation from state to state. The job market in Minnesota is today nothing like the job market in Wisconsin. And, as indicated previously, changes in denial rates across the fifty states vary dramatically and have changed significantly in numerous states since 2010 because of an explosion in use of “other reasons” to deny unemployment benefits to claimants.

So, as always, in Wisconsin make sure to review these tips for filing an unemployment claim.