Delays are a choice

Wisconsin Watch reviews the stories of several claimants facing incredibly long delays in the processing of their unemployment claims.

Some perspective, however, is needed on what these stories reveal.

First, the story reports that around 150,000 claimants are still waiting for their claims to be decided. The May 2020 jobs report indicates that the workforce in Wisconsin is just under 3.1 million. Some simple math reveals that the number of workers with outstanding claims waiting and waiting is roughly 5% of the state’s entire workforce.

So, just like disabled workers, one out of every twenty people who work are WAITING on the Department to decide their cases after now nearly four months.

Anyone with eyes in their head should see with these numbers that the Department has a massive problem on its hands. A thousand more workers processing unemployment claims is not going to fix a problem that is systemic to the claims-filing process itself.

Note: the claims processing backlog continues. On June 9th, the Department was just processing appeals in unemployment cases that had been filed on May 9th. At present, the delay at the hearing office in processing documents submitted for a hearing is down from 14+ days to 10-12 days. In a best case scenario, I would not expect a hearing on an appeal filed today to occur until late September. Appeals I filed in early to mid- May have yet to be scheduled for a hearing.

Which gets to the second problem revealed in this story: why is the Department taking so damn long to process claims. Here is the official explanation:

Frostman, the workforce secretary, said his agency needed time to interpret federal guidance for the new program. By April 27, for example, state agencies nationwide asked enough questions to prompt the labor department to update its guidance. Another obstacle Frostman cited: DWD’s 1970s-era technology, a vulnerability that lawmakers and regulators have understood for decades but never bothered to fix.

Wisconsin Watch reports how a few other states have had claim-filing problems (though the actual delays in those other states are not like those in Wisconsin). Yes, every state has had processing problems given the number of claims being filed. After all, the number of claims at issue now is at Great Depression levels.

What is NOT mentioned in the article is how those states have quickly adapted and changed their claim-filing processes to streamline their decision-making and reduce the number of issues that has to be decided with each claim.

Michigan paid out $1 million in PUA benefits as of the week ending April 25th. APRIL 25th! New Jersey, which made initial headlines about its ancient COBOL system and was experiencing similar delays with its claims, now reports more than 1 million claimants paid out of 1.2 million workers with unemployment claims. New Jersey even offers explicit advice about how to answer weekly certification questions that is still lacking in Wisconsin.

Note: Wisconsin continues to report confusing numbers about weeks being claimed rather than the number of claimants being paid or denied benefits. The small print in these reports, however, reveals “approximately 141,110 unique claimants with around 232,576 issues requiring adjudication” that are still waiting on an initial decision.

And, states as varied as Ohio and Massachusetts were already making significant alterations to their claim-filing requirements as of March 17th. By March 24th, information on what states were doing in response to the pandemic was already available and known.

There was no federal guidance available then. Yet, somehow these states were acting in response to the major unemployment crisis they were facing. Certainly, no state has been perfect. But, at least these states and others were responding to the crisis.

In Wisconsin, the story instead has been a multiplication of issues for disqualifying claimants, like SSDI, job registration, and BAR barriers.

There is a timidity to the Department’s decision-making that is unique to Wisconsin at the moment. For whatever reason, the Department is attempting to maintain the status quo in the face of this pandemic. More bodies on the front lines, however, do not help when the nuclear bomb has gone off.

SOME in the Department now think the disabled SHOULD receive PUA benefits

Recall that Wisconsin denies unemployment benefits to SSDI recipients. But, with the pandemic and the economic stimulus created in the CARES Act, it seemed that the disabled in Wisconsin should be eligible for federally-funded PUA benefits based on the statutory provisions in that act.

For some reason, Wisconsin DWD decided the prohibition on eligibility in state law would govern this federal law. By mid-May, legislators were getting dozens to hundreds of inquiries regarding PUA-eligibility for the disabled.

At this time, DWD-UI had received a generic “conclusion” from the US Dep’t of Labor that the SSDI-recipients were NOT eligible for PUA benefits (no actual reasoning is available; see this April 2020 e-mail chain and this other April 2020 e-mail chain — a client of mine just received these from his own open records request).

At this time, I began working with numerous legislative offices at the state and federal level by explaining to them how the proffered rationales for denying PUA benefits to the disabled made no sense in light of current law or the CARES Act. Despite my efforts at being rational and following the actual text of the statutes and regulations in question, my efforts were not having much success.

I feared that reliance on the legal process to correct the Department’s misinterpretation of the law would mean a practical denial of PUA benefits to the disabled. After all, who could wait six to ten months for the legal process to work its way through without any income whatsoever. As is obvious to everyone (except maybe the Department), people literally are going hungry and are getting more desperate by the hour.

A change in policy by the Department is needed now, not next week or next month.

Then, two reporters picked up on this story and did some amazing pieces about the scope of this denial and and its irrational nature.

• Wisconsin blocks group of people with disabilities from federal unemployment assistance
• ‘I cried for days’: Wisconsin blocks pandemic payments for federal disability aid recipients
• Why Federal Disability Aid Recipients Can’t Get Pandemic Unemployment In Wisconsin

That media coverage led DWD to produce this e-mail chain dated May 29th with a proffered guidance from the US Dep’t of Labor.

According to this “guidance,” the denial of eligibility for regular unemployment determines eligibility for PUA benefits. As several legislative aides and others know, I did not think this “guidance” was all that convincing. It misconstrued relevant statutes and regulations and avoided applying the basic text of the CARES Act itself for determining eligibility for PUA benefits in the first place.

I continued to work with legislators and advocacy groups on this issue. I also went from 1-2 calls a day to 5-10 calls a day from folks seeking legal help with their unemployment issues. I am now working with around 50 disabled people directly in regards to their eligibility for unemployment benefits and am probably at my limit of how many I can represent.

In the meantime, one of these new clients informed me of a hearing set for June 10th. My June 4th appearance notice in that case probably has still not been processed as of today, but I managed to finally get through to the hearing office about my participation with a phone call on June 9th (my successful strategy? Call every hour starting at 8:30am. I got through at 10:30am after a 35 minutes wait).

That same day, I then got calls from the senior ALJ from the Milwaukee hearing office about procedural matters and even a personal e-mail message from a DWD attorney urging me to drop my “meritless” appeal.

The hearing on June 10th went forward, and the next day I submitted a letter-brief on the issues of how the ban on regular unemployment is discriminatory, how SSDI-recipients are eligible for PUA benefits under the statutory text of the CARES Act if the discriminatory ban remains, and why the ALJ should rule on these issues. If you want to understand the legal issues at stake, read this letter-brief.

Then, last Saturday a source revealed to me a June 9th letter from Sec. Frostman to Sec. Scalia at the US Dep’t of Labor indicating that it is now DWD’s position that SSDI-recipients ARE eligible for PUA benefits because the prior advice had misstated the relevant law.

So, the Department now agrees with me. Let that sink in for a moment.

Without the media coverage on this issue, there would not be a change right now. So, my public thanks to the reporters for their coverage on this issue.

As a result, DWD leadership has stepped up and made a needed policy change. For that, DWD leadership is to be commended and thanked. Still, much work remains, and no one should expect that DWD as a whole has suddenly changed its stripes.

The Department staffers responsible for this discrimination against the disabled are pushing back against this change. Rather than just implementing it, they have warned of dire consequences should the Department get this issue wrong, like the disabled being required to repay the PUA benefits they received or even the Department being sued by the US Dep’t of Labor.

So, the Department claims it now needs permission from Sec. Scalia to find the disabled eligible for PUA benefits. This claim is being made despite the lack of any formal or correct guidance originally denying PUA eligibility to the disabled in the first place.

So, hogwash. As noted in my letter-brief, North Carolina has a similar ban for the disabled receiving state unemployment benefits. In that state, the ineligibility of SSDI recipients is based on their allegedly NOT being able and available for work. North Carolina waived that requirement away by executive order.

Wisconsin claims it cannot waive any able and available requirements, even ones created by state law, such as the requirement to register with the job center of Wisconsin website. In other words, North Carolina is doing something Wisconsin considers impossible. And, yet, somehow North Carolina is doing fine, or at least better than Wisconsin in processing its own unemployment claims and there is no ensuing legal cataclysm.

Wisconsin, in its own ban against the disabled, simply declares them ineligibility regardless of their ability to work. So, the “ineligibility” in Wisconsin falls squarely in the category of making them “eligible” for PUA benefits. As noted in my letter-brief and by Sec. Frostman in his letter, anyone ineligible for regular state unemployment benefits is, by the statutory text of the CARES Act, eligible for PUA benefits.

But (with legal matters, there always seems to be a but), no one should underestimate the hostility of staffers at the Department to awarding PUA benefits to the disabled. The June 9th personal e-mail message to me provides ample evidence of that hostility.

And, I suspect that the Department will slow walk eligibility and examine every facet of a claim for possible denial or fraud charges. And, all of the folks who never applied in the first place or were told not to apply may not be allowed by the Department to file their claims now after this change in policy.

Finally, let’s acknowledge the consequences of this policy change. In 2018, there were around 186,423 SSDI recipients in Wisconsin. Of these, 158,502 worked as well. See Table 9 of this 2018 report.

Around 3 million folks in Wisconsin are in the labor force now. So, 5% of the labor force consists of disabled workers receiving SSDI benefits. FIVE PERCENT.

Note: This number of 158,502 disabled workers is more than all construction workers in the state (127,500 is the April revised figure for construction workers in Wisconsin for March 2020).

Under the state’s eligibility ban, employers still pay unemployment taxes on the wages paid their disabled employees. And, the unemployment trust fund accrues additional monies because these disabled employees are ineligible for the unemployment benefits due them for their work. As such, the trust fund has been rebuilt off of the labor of the disabled. Really.

If this change in policy actually does happen, there are literally tens of thousands of people who will be helped out by my pro bono efforts, these media reports, and the efforts of my clients.

Update (18 June 2020): Fox6 has a follow-up piece on the Department’s shift in position as well.