Upcoming testimony before a Senate Committee

Update (28 Jan. 2021): TMJ4 is perhaps the only media outlet in the state that actually describes what happened at the hearing over current problems with unemployment claims and how any computer updates are not a viable solution for those currently dealing with this mess.

I am scheduled to testify before the Senate Committee on Economic and Workforce Development this Wednesday, January 27th, at a public hearing starting at 10am, concerning Wisconsin unemployment.

Given the general lack of information about what is actually happening with the unemployment crisis, I have provided the committee a 199pp. PDF of the materials and a 3pp. letter describing those materials.

WisEye will be carrying the testimony live.

Some of the charts and tables in the informational packet include:

WI claimants paid, initial claims, continued claims, and covered employment, 2007-2020

The year of 2007 should be considered a base year for how a healthy unemployment system in this state should function.

WI first time payment timeliness, 2005-Nov. 2020

Notice that during the Great Recession first payments of benefits for the most part continued to be timely.

Comparison of PUA claims-handling for WI and select other states

Except for Minnesota, Wisconsin has had fewer PUA claims that many other states and has paid far fewer PUA claims as a percentage than other states. New Jersey, like Wisconsin, has a COBOL mainframe for their unemployment claims. Yet, New Jersey’s handling of PUA claims shows incredible success compared to Wisconsin.

Update (27 Jan. 2021): My testimony and the testimony of others, including the Department, is available here. My testimony starts around 11am (an hour into the hearing), and runs 30-40 minutes. Here is a recap of my remarks about how disabled workers are being treated:

$1.1 billion is the amount available in the unemployment trust fund at the end of December 2020. $1.1 billion that is not helping anyone but just sitting in a bank account.

Wis. Stat. § 108.01(1) (emphasis supplied) provides:

Unemployment in Wisconsin is recognized as an urgent public problem, gravely affecting the health, morals and welfare of the people of this state. The burdens resulting from irregular employment and reduced annual earnings fall directly on the unemployed worker and his or her family. The decreased and irregular purchasing power of wage earners in turn vitally affects the livelihood of farmers, merchants and manufacturers, results in a decreased demand for their products, and thus tends partially to paralyze the economic life of the entire state. In good times and in bad times unemployment is a heavy social cost, directly affecting many thousands of wage earners. Each employing unit in Wisconsin should pay at least a part of this social cost, connected with its own irregular operations, by financing benefits for its own unemployed workers. Each employer’s contribution rate should vary in accordance with its own unemployment costs, as shown by experience under this chapter.

So, money to pay rent and groceries, to dine out in restaurants, just to spend on consumer goods — WHEN there is a state-wide lack of consumer spending because of a worldwide pandemic — is not going out to the unemployed workers in this state who need it.

One group in particular has been hit hardest — the disabled.

Wisconsin is one of only two states that denies unemployment benefits to those who receive SSDI benefits. This eligibility ban was premised on the belief that only 50 workers would be affected by it.

That belief was not true. In any given year, there are 150,000+ SSDI working in Wisconsin (for 2019, see Table 27 at this link). To put that number in perspective, in the December 2020 jobs report for Wisconsin, there were 128,100 construction workers in this state, a ~22,000 short of the workers who receive SSDI benefits.

Wisconsin is allowing its employers to lay off these 150,000+ disabled workers and face no consequences for such layoffs. If unemployment was automobile insurance, then Wisconsin would exactly be saying that drivers could run over disabled people without any consequences to their auto insurance premiums. This is obscene.

So, a $1.1 billion unemployment trust fund has been built up on the backs of 150,000+ disabled workers in this state who by law cannot receive those unemployment benefits, against this explicit provision in Wis. Stat. § 108.01(1) (emphasis supplied):

Whether or not a given employing unit can provide steadier work and wages for its own employees, it can reasonably be required to build up a limited reserve for unemployment, out of which benefits shall be paid to its eligible unemployed workers, as a matter of right, based on their respective wages and lengths of service.

Fixing the battle for corporate scraps

Greg LeRoy of Good Jobs First has the following news for the government officials who read this blog:

The low-road “Economic War Among the States” was visibly on steroids during the Amazon HQ2 tax-break auction. But Jeff Bezos was only playing a system that is more than 80 years old. This “race-to-the-bottom” captures the public sector in a “prisoners’ dilemma,” thereby enabling site location consultants and their corporate clients to dominate how economic development happens in the U.S.

If you have any officials in your state whom you know to be rightfully aghast at this system and would like to learn more about how nations of the European Union have for decades achieved greater cooperation than have the states of America, we have a positive alternative for you. Yes, EU nations spend less and get more for their Euro-incentives. (Hint: no nation’s capital region or financial center would have been allowed to give Amazon a dime if the HQ2 auction had taken place in Europe.)

Starting in late February, in a special three-part learning event organized by Good Jobs First and the European Union Delegation to the United States — “International Lessons for Interstate Progress” – we will teach U.S. leaders on how European Union “state aid” rules shape economic development subsidies to attract investment and jobs.

If you wish to nominate a governor, cabinet secretary, state legislator, mayor, county executive or city or county council member, please send their name and contact info to our Fellow, Professor Emeritus Kenneth Thomas (author of two books comparing the U.S., EU, and Canada), and he will follow up. Please give Kenny a brief note and/or links to newsclips or other information on what you know about the official’s opinion of the “economic war.”


PS: if you yourself are interested, see this U.S. set of remedies we’ve laid out, and also a primer on the EU system.

New mainframes do not mean the end of old problems

The unemployment special session has come and gone with nothing to show. For some reason, however, folks seem to think a new mainframe is somehow vital to fixing the unemployment case-handling problems at the Department.

I have to ask: what are they smoking?

A new mainframe is a four to eight year project, and there is no guarantee of success. Massachusetts, for example, did not actually get a new unemployment system until its third attempt at replacing its old mainframe.

And, in every state that has moved to a new claim-filing system, the effort has taken numerous years of extensive planning, testing, more testing, and then fixes for implementation mistakes just to make the system operational, if not still worker-friendly.

Do not take my word. Here is what a recent report indicates:

For many years, modernization projects trended in the red—encountering significant cost overruns and schedule delays, with several states actually pulling their projects. As noted in the introduction to this report, as of 2016, 26 percent of projects had failed and been discarded; 38 percent were past due, over budget, or lacking critical features and requirements; and 13 percent were still in progress. However, the past few years have shown great improvement, with more states implementing final systems while controlling costs.

* * *

The completed modernization projects have encountered significant problems, including numerous delays, issues with testing, data conversion errors between legacy and new systems, data loss and security issues, and poor training of staff who interact with claimants. For example, Massachusetts’ modernized system, built by Deloitte, was $6 million over budget and, after rolling out two years late, was riddled by implementation problems. Call center wait times doubled, and there were 100–300 claimant complaints per week, owing in large part to a major increase in system-generated questionnaires to claimants, which delayed claims processing.

While Tennessee’s system was developed by a different vendor, Geographic Solutions Incorporated, they experienced some of the same problems as Massachusetts: the system auto-generated numerous non-critical questions about applications that had to be cleared by staff, and the backlog for responding to user questions about claims stretched to eighty-two days after the system was rolled out in May 2016. Data conversion problems between the legacy and new system caused delays in payments, all during an implementation that a legislative audit later concluded was rushed.

In several other states, implementation has been rushed to meet external deadlines, leading to situations like that in Maine and Washington (described in depth in the case studies) where the state’s system was not ready for a surge of claimant questions, glitches caused the system to go down after launch, and repeat problems with core elements like passwords could not be solved.

Florida’s CONNECT system was riddled with timeliness and accuracy problems when it launched, including more than 400,000 claims documents that were stuck in an “unidentified” queue and unable to be processed. The implementation of the new system coincided with a new requirement that claimants report per week, which could only be reported online through the new system. As described in a previous NELP report, “the number of workers disqualified because DEO [the Florida Department of Economic Opportunity] found they were not ‘able and available for work’ or not ‘actively seeking work’ more than doubled in the year following the launch of CONNECT, even though weekly claims declined by 20 percent in that same year.” The U.S. Department of Labor Civil Rights Division found that this aspect of the system had a discriminatory effect on Limited English Proficient claimants who struggled the most. New Mexico’s modernization implementation also faced a civil rights complaint from a legal service organization based on multiple language access problems, including an elderly Spanish-speaking farm worker who was told he could file online in a site that was only in English.

Centering Workers — How to Modernize Unemployment Insurance Technology (17 Sept. 2020) at 11-12 (footnotes omitted).

Furthermore, as previously pointed out, this report demonstrates that these modernization efforts have gone hand-in-hand with making the claim-filing process more difficult, not less.

Even Jake, normally an astute observer of labor economics, seems to have fallen under the mainframe spell, when he makes the claim that program integrity funds can be used but are insufficient for such a project. Jake mistakenly uses Department budget numbers for real dollars being expended. In reality, program integrity expenses have been limited to the salaries of a few LTE investigators who predominately investigate claimants for alleged fraud when they make UN-intentional claim-filing mistakes.

Note: A Fox6 report ably shows how the Department presumes UN-intentional claim-filing mistakes are fraudulent, as a fraud charge leads to gargantuan penalties for which the Department pockets a sizable amount for its own program integrity fund — a fact Jake fails to mention.

As of November 2020, program integrity (line 228) remains a cash cow for the Department. In that month alone0, this fund raked in $387,871.95 while only expending $22,906.33, raising the amount tucked away to $15,507,000.

The claim-filing problems right now are not going away (see, e.g., how current questions about able and available status violate state unemployment law), and they are getting worse. Pinning hopes to a new mainframe that is years away is ridiculous. Yes, the Department needs a new mainframe, but the problems with unemployment are more basic and have little to do with technology. If anything, the Department has used technology to make the claim-filing process more obtuse and less transparent.

As I previously noted: “New Jersey, a state saddled with an older mainframe system based on COBOL like Wisconsin, has paid nearly 75% of the 657,000 PUA claims filed in that state.” For the same time frame, Wisconsin only paid 32.01% of 112,114 PUA initial applications. So, if a COBOL mainframe is NOT preventing New Jersey from handling SIX times more PUA claims and paying 13.5 more PUA initial claims than Wisconsin (490,282 first payments in NJ versus 35,889 in WI), then just maybe a COBOL mainframe is not the source of the problems here in Wisconsin.

Continued Assistance Act

The Continued Assistance Act had a rocky signing, but it is now law and some details are starting to emerge.

As with this pandemic, there are numerous programs, and it is vital that you keep the distinctions clear for yourself. So, first determine which unemployment benefit applies to you and then read the section for that specific benefit.

And, then read about the other benefit programs, as those will likely affect you as well at some later point if not immediately.

The Department indicates that it hopes to start paying out the new $300 PUC benefit before the end of January. Implementation of the other programs remains unknown.

Returning to work notices

In response to largely fictionalized concerns over workers refusing to come back to work, notice requirements about refusing work are now mandated.

Wisconsin already has had generalized notices in place, and has actively been encouraging workers to report any and all work refusals so as to deny claimants eligibility. For example, the Department provides this advice to employers:

If an employee decides not to return to work when the business re-opens, are they eligible for unemployment?

In most cases, no. Unemployment benefits are available to individuals who are totally or partially unemployed due to no fault of their own. In this example, the individual—not the employer—is choosing not to work and, therefore, would be ineligible. However, the facts of each circumstance are important. An investigation would be conducted to determine if the employee would still be eligible. Please see the Claimant Handbook Part 6 Eligibility Issue, Common Disqualifications.

How do I notify UI that an employee had refused to return to work?

UI Employers can report individuals who are filing for UI but have refused a job offer by visiting https://unemployment.wisconsin.gov/employerfeedbackform.

You will choose “Report Individual Who Refused Work” and be prompted to answer several questions regarding the individual who refused the work, and the job offer itself. A confirmation email is sent to the person submitting the information. The reported information is sent to a UI Job Refusal Mailbox, prompting the creation of an eligibility issue on the individual’s claim that will need adjudication.

UI Employers can also contact the UI Help Center (Employer Assistance Line), (414) 438-7705.

Whether workers are actually refusing returning to work remains to be seen, especially since Wisconsin’s partial unemployment eligibility is a financial boon to workers who do return to work (as long as that work is still not full-time).

Interestingly, this provision also requires the Department to provide claimants accused with refusing a return to work with a plain-language notice that includes:

  • Summary of state UC laws regarding an individual’s return to work;
  • Statement about the individual’s rights to refuse to return to work or to refuse suitable work;
  • Explanation of what constitutes suitable work under state UC law;
  • Explanation of the individual’s right to refuse work that poses a risk to the individual’s health or safety (if permissible and as defined under state law); and
  • Instructions for contesting a denial if the denial is due to a report by an employer that the individual refused to return to work or refused suitable work.

UIPL No. 9-21 (30 Dec. 2020) at 14-15. Such a notice is much more than what Wisconsin currently offers for a work refusal.

Finally, you can refuse a return to work and remain eligible for PUA benefits if:

  • you are diagnosed with COVID-19 or have symptoms of a COVID-19 infection,
  • you are caring for a family member or a member of your household diagnosed with COVID-19,
  • you have primary care-giving responsibility for a child or person who cannot attend school or another facility because of the pandemic and so you cannot abandon that care-giving responsibility, or
  • a government agency or a medical provider has told you to quarantine

The $300 PUC

There is now a new $300 PUC payment for 11 weeks, starting with the week ending 1/2/2021 through the week ending 3/13/2021 for anyone receiving PEUC, PUA, EB, or regular unemployment benefits.

This $300 PUC is automatic as long as the claimant is receiving some other unemployment benefit for these weeks.

Pandemic Emergency Unemployment Compensation (PEUC)

PEUC benefits are extended an additional 11 weeks, from the week ending 1/2/2021 through the week ending 3/13/2021. But, these additional weeks cannot be paid for any weeks prior to the week ending 1/2/2021.

A phaseout time period is now available to those claimants receiving PEUC benefits who have not yet exhausted those benefits as of the week ending 3/13/2021. These claimants can continue receiving PEUC benefits for additional weeks until the week ending 4/10/2021.

Because with every new quarter PEUC payments are halted or slowed while state agencies investigate claimants’ potential eligibility for regular unemployment benefits, there is now a program in place to allow state agencies to continue paying PEUC benefits in certain circumstances.

Individuals may be eligible to continue to receive PEUC instead of regular UC if all of the following criteria are met:

Criterion #1: The individual has been determined to be entitled to PEUC with respect to a benefit year;

Criterion #2: The benefit year with respect to which the PEUC entitlement had been established (i.e., the parent claim) has expired after the date of the enactment of the Continued Assistance Act (December 27, 2020);

Criterion #3: The individual has remaining entitlement to PEUC with respect to such benefit year; and

Criterion #4: The individual would qualify for regular UC in a subsequent (new) benefit year and the WBA for regular UC in the new benefit year would be at least $25 less than the WBA payable on the individual’s PEUC claim.

UIPL No. 17-20 Change 2 (31 Dec. 2020) at 6-7. Essentially, this criteria means that a person can continue to receive PEUC benefits rather than regular unemployment benefits if that person still has weeks remaining on their PEUC claim, their current benefit year does not expire until after 27 Dec. 2020, and the total weekly benefit amount in regular unemployment benefits is $25 less than what they are entitled to with their current PEUC benefits.

This program letter spells out various options for how state agencies can apply this option. See UIPL No. 17-20 Change 2 (31 Dec. 2020) at 7-11.

NEW — Mixed Earners Unemployment Compensation (MEUC)

Many independent contractors found themselves eligible for regular unemployment benefits because of side jobs they had. Those regular unemployment benefits were much lower than what they would have earned from the self-employment, however.

So, a new, optional benefit has been created for these self-employed workers, and Wisconsin has said it is adopting it.

Under this program, claimants who have more than $5000 in self-employment income for the calendar year previous to when their initial claim starts will be eligible for an additional straight $100 per week on top of their regular unemployment (or PEUC or EB) benefit. See UIPL No. 15-20 Change 3 (5 Jan. 2021) at 4-5.

The documentation to establish the $5000 in self-employment income is nominally a tax return.

If available, individuals must provide a copy of the income tax return for the most recent taxable year ending prior to the individual’s application for regular UC to substantiate their self-employment income for purposes of establishing eligibility for MEUC. If the tax return is not available (e.g., because the individual has not yet filed the income tax return yet), acceptable documentation of self-employment income include, but is not limited to, pay check stubs, bank receipts, business records, ledgers, contracts, invoices, and billing statements that substantiate self-employment income of at least $5,000 during the most recent taxable year ending prior to the individual’s application for regular UC.

Individuals may submit this documentation at any time while the MEUC program is in effect. States may wait to make an eligibility determination for an MEUC application until documentation is provided. Or, states may provide individuals a reasonable amount of time, as provided under state law, to submit this documentation after they apply for MEUC. However, until the individual provides the documentation and the state can determine that it substantiates that the amount of self-employment income meets MEUC eligibility requirements, MEUC payments may not begin.

Unfortunately, this MEUC benefit is only payable for weeks ending 1/2/2021 through the week ending 3/13/2021 — 11 weeks in all.

Assistance in figuring out this new program is available here, and the Department has created a FAQ as well.

Finally, MEUC payments are counted for determining income for Medicaid coverage Children’s Health Insurance Program (CHIP). See UIPL No. 15-20 Change 3 (5 Jan. 2021) at 5.

Note: Per § 2104(h) of the CARES Act, PUC benefits are NOT counted for Medicaid and CHIP.

Pandemic Unemployment Assistance (PUA)

There are many changes and updates.

  • The new calendar quarter that started in January 2021 does not mean that all PUA payments have to be put on hold while the Department investigates potential eligibility for PEUC benefits. States like Wisconsin are now allowed to continue paying PUA benefits for four more weeks while the state determines potential eligibility for PEUC benefits.

    Obviously, claimants who receive PUA benefits in lieu of PEUC benefits cannot later claim PEUC for those same weeks.

    This lag period (or hold harmless period) realistically only applies to those receiving PUA benefits because they have exhausted their eligibility for regular unemployment benefits and then suffered a pandemic-related job loss. After all, claimants who initially are only eligible for PUA benefits cannot ever receive PEUC benefits. So, this lag period option will not matter to the self-employed or the SSDI recipients who are getting PUA benefits, since they are ineligible for regular unemployment or PEUC benefits in the first place. Still, this lag period is helpful to claimants in W2 covered employment who are receiving PUA benefits because they lacked sufficient benefit year earnings.

  • New initial claims for PUA benefits filed after Dec. 27th can only be backdated to a job loss on Dec. 1st at the earliest.
  • A phaseout period is now available to those claimants receiving PUA benefits who have not yet exhausted those benefits as of the week ending 3/13/2021. These claimants can continue receiving PUA benefits for additional weeks until the week ending 4/10/2021.

    PUA claimants are eligible for this phase out period if their PUA claim is eventually considered to be “live” for the week ending 3/13/2021.

There is now an additional documentation requirement for PUA claims. Claimants will have to provide documentation regarding their employment, self-employment, or the job offer/work they were slated to start for any weeks PUA weeks for the week ending 1/2/2021 or later.

  • New PUA claims filed on Jan. 31st or later will have to provide that documentation within 21 days of the claim.
  • Continued PUA claims or initial PUA claims filed prior to Jan. 31st will have 90 days to provide this documentation.

In most cases, documentation submitted to provide proof of income should be enough. But, those claimants receiving PUA benefits because of a withdrawn job offer or loss of work may need to provide additional documentation. Here is what the program letter spells out for this requirement:

In general, proof of employment includes, but is not limited to, paycheck stubs, earnings and leave statements showing the employer’s name and address, and W-2 forms when available.

Proof of self-employment includes, but is not limited to, state or Federal employer identification numbers, business licenses, tax returns, business receipts, and signed affidavits from persons verifying the individual’s self-employment.

Proof of employment with organizations such as the Peace Corps, AmeriCorps, and educational or religious organizations includes, but is not limited to, documentation provided by these organizations and signed affidavits from persons verifying the individual’s attachment to such organizations.

Proof of the planned commencement of employment includes, but is not limited to, letters offering employment, statements/affidavits by individuals (with name and contact information) verifying an offer of employment.

Proof of the planned commencement of self-employment includes, but is not limited to, business licenses, state or Federal employer identification numbers, written business plans, or a lease agreement.

Individuals must present the proof of employment and the state may verify the proof submitted using records the state may have available, such as wage records or state revenue records.

* * *

Unlike the documentation requirement to receive a higher WBA, documentation to substantiate employment or self-employment need not cover the entire period in which an individual was working. States have discretion to determine if the documentation an individual submits substantiates an individual’s employment, self-employment, or planned commencement of employment or self-employment.

UIPL No. 16-20 Change 4 (8 Jan. 2021) at I-10 to I-11. Claimants who fail to provide this requested documentation will be liable for repaying PUA benefits only for weeks ending 1/2/2021 and later. “This is because the individual cannot be ineligible for a week of unemployment ending before the date of enactment solely for failure to submit documentation.” Id. at I-12.

There is also a new weekly re-certification requirement specifying that, for each week claimed, the pandemic-related reason for PUA-eligibility, effective the week ending 2/6/2021, must be provided.

Note: Wisconsin has already mandated this requirement for PUA claimants. See the PUA weekly certifications at the post that has Wisconsin’s claim-filing forms.

But, benefits are NOT to be denied for prior weeks solely for failing to submit this weekly certification by states that made a good faith effort to implement PUA program for those prior weeks. See UIPL No. 9-21 (30 Dec. 2020) at 9; see also UIPL No. 16-20 Change 4 (8 Jan. 2021) at I-15 to I-16. So, Wisconsin may well be denying benefits to claimants pre-maturely and without legal justification.

Over-payments of PUA benefits can NOW be waived if the claimant is not at fault for the mistaken payment and repayment would be contrary to equity and good conscience (i.e., the claimant cannot afford repayment at this time). As Wisconsin’s over-payment standard is based on the Department making an error of some kind when there is no claimant fault, this equity and good conscience should apply for over-payments of PUA benefits:

If a state UC law provides for the waiver of overpayments but does not include a provision defining “equity and good conscience” the state must use the following provisions for equity and good conscience, when assessing whether an individual overpayment may be waived.

» It would cause financial hardship to the person from whom it is sought;

» The recipient of the overpayment can show (regardless of his or her financial circumstances) that due to the notice that such payment would be made or because of the incorrect payment either he/she has relinquished a valuable right or changed positions for the worse; or

» Recovery could be unconscionable under the circumstances.

States that choose to waive overpayments under Section 201(d) of the Continued Assistance Act must notify all individuals with a non-fault overpayment of their ability to request a waiver. The notification must include how to request the waiver.

Waiver determinations must be made on the facts and circumstance of each individual claim, blanket waivers are not permissible.

Update (16 Feb. 2021): The Department has a program tracker page for the Continued Assistance programs. Unfortunately, the news is NOT good.

Program tracker for contiued assistance act programs

Extended PEUC benefits are NOT slated to be available until March 4th. The new PUA benefits are not slated to be paid until April 21st, well after the end date of March 13th and even after the phaseout period ending on April 10th. And, MEUC benefits will not be available until April 28th, four months after the program was supposed to start.

Proposed claim-filing changes are token measures at best

The Department has announced that it is making BIG changes to the claim-filing process and has even invited public comment on those proposed changes by asking folks to download a spreadsheet setting forth those changes. These comments are due Jan. 8th.

These proposed changes hardly match what has been promised, however.

Problems with form

The MS Excel spreadsheet for viewing the proposed changes and for providing these comments is extremely difficult to use. The spreadsheet originally had several columns that were over 15″ wide and would barely fit on my mammoth 24″ 1920×1200 monitor. Moreover, the links to actual graphics in the first column of the spreadsheet are broken. Any click on those links took me to a DWD login screen, where I was prompted for a user-id and password.

Luckily, the Department provided links to the original initial claims questions and weekly claims questions.

Still, this formatting essentially requires a person to fix the needlessly wide columns in the spreadsheet and to either print up web pages or the Excel spreadsheet (when neither has been formatted for printing) or to view these two separate documents on two monitors (what I have done).

Most working folks, especially working folks whose online access is limited to their smart phone, are cut off immediately from providing any feedback whatsoever. MS Excel is not a universal format, despite Microsoft’s efforts. And, viewing such a spreadsheet on a smart phone is impossible. And, how many folks have two wide-screen monitors available to them for viewing all of this information? As is now typical with the Department, online use is geared to the top 10%, and the rest of Wisconsin is left behind.

Problems with substance

The proposed changes are extremely minor to say the least. For example, here is the original question #39 for an initial claim:

39. Do you normally obtain work through a trade union hiring hall? A trade union hiring hall is a place maintained by a trade union that refers union workers to available jobs.  Trade unions represent construction workers, painters, operating engineers, electrical workers and other trades.  Not all unions are trade unions.

Here is the proposed plain language question #39:

39. Do you normally get work through a trade union hiring hall? A trade union hiring hall is a place where a trade union refers union workers to available jobs. Trade unions represent construction workers, painters, operating engineers, electrical workers and other trades. Not all unions are trade unions.

It’s difficult to even find what has changed. And, here are my comments:

Here is a classic example of how the claim-filing process is broken.

1- The questions here go from specific and less familiar to the more general and more easily known. If the Department was actually trying to be helpful and educational, the questions on this issue would start with the easiest and most well understood: Do you work at a union job site? If Yes, Do you belong to the union? If Yes, Are you a member in good standing? If Yes, Does your union have a hiring hall or an out-of-work list? If Yes, Have you specifically signed up for new work or job assignments through that hiring hall or out-of-work list (signing up will mean that you weekly work search requirement will be waived as long as your sign-up remains active)?

These series of questions educate and inform claimants about the issue and does so by building on basic concepts and getting more specific.

2- The distinction being made between trade unions and unions is from 1905. Laborers unions in Wisconsin have had hiring halls for decades, and SEIU locals (FiServ forum, for example) are establishing job banks and hiring zones for their members. The sentences here simply make no sense. Just watch season 2 of The Wire to understand how wrong these questions are in their present form.

Here is another example. First, the original:

School Attendance

You may be denied benefits if you are unavailable for full-time shift work and unable or unwilling to change your classes to work full-time first shift, unless the department determines you are in a course of approved training. This applies even if you are working.

104. What is the name of the school you are or will be attending?

105. Provide the city and state in which the school is located

106. What is the phone number for the school?

107. Are you enrolled in a Apprenticeship administered by the Department of Workforce Development?

108. Dependent on Yes to #107 -Trade/Occupation

if yes, to apprenticeship, then additional questions:

Provide the name of your Workforce Innovation and Opportunity Act (WIOA) case manager:

Provide the phone number of your Workforce Innovation and Opportunity Act (WIOA) case manager:

Now, the plain language version:

School Attendance

You may be denied benefits if you are can’t work a full-time shift and are unable or unwilling to change your classes to work first shift full-time (unless the department approves your course of training). This applies even if you are working.

104. What is the name of the school you are or will be attending?

105. What city and state is the school in?:

106. What is the school’s phone number?

107. Are you enrolled in an Apprenticeship offered by the Department of Workforce Development?

108. Dependent on Yes to #107 -Trade/Occupation if yes, to apprenticeship, then additional questions:What is the name of your Workforce Innovation and Opportunity Act (WIOA) case manager:What is your Workforce Innovation and Opportunity Act (WIOA) case manager’s phone number?:

Obviously, there is no fundamental re-working of the claim-filing process going on here. Indeed, fundamental defects remain solidly in place:

Legally wrong in regards to first-shift schooling. See Eckardt v. Jennico 2 Inc., UI Hearing No. 06201757EC (10 Nov. 2006) (available at https://lirc.wisconsin.gov/ucdecsns/2691.htm), Kaiver v. Richardson Industries Inc., UI Hearing No. 07400427GB (18 May 2007) (available at https://lirc.wisconsin.gov/ucdecsns/2850.htm), and DWD 128.01(4) (availability for work). A person who takes classes during the day but works as a barkeep at night is eligible for UI when laid off from the barkeep job because his/her customary work is 2nd shift. In other words, most students are actually UI eligible, but the Department routinely denies these claims for invalid reasons. What happened to the presumption of eligibility?

Another example of a lack of fundamental change are the questions over independent contractor status. I explain in response:

There should be extensive discussion/questions of gig work. Way too many folks are doing gig work in WI. To them, they think of this work as 1099 work, not work as an independent contractor.

So, you need to ask questions in ways that claimants understand the issue, not in the legal framework the Department wants to apply. The claim-filing processes in other states seek to bridge that gap. Here, Wisconsin is stuffing claimants’ job experience into the legal framework it wants to apply. Good customer service is helping claimants answer the questions being asked rather than forcing claimants to become legal experts in a field.

This whole independent contractor examination should be reserved for an actual investigator. Or, a link to https://dwd.wisconsin.gov/worker-classification/ui/ would be much more helpful than what is here.

The proposed changes to the weekly claims questions are no better. For example, questions about missed work are misleading and incomplete:

Examples of missed work need to be provided. Many claimants think missed work is the same as unexcused absences from work. If they went to doctors appointments on Thursday morning with the permission of their employer, most claimants do NOT think they missed any work, since that Thursday morning doctors appointment is “understood” as not available hours of work. So, the Department needs to explain that the doctors appointment is missed work for unemployment purposes. Also, salary workers who do not clock in or clock out also need to be explained here. As currently framed, this question does more to mislead claimants that assist them with providing accurate claim-filing information.

The new SSDI question continues to presume that claimants know everything:

90. Are you receiving any disability benefits from Social Security? Note: SSDI (Social Security Disability Insurance) is not the same as SSI (Social Security’s Supplemental Income which is usually for dependents with disabilities.)

I explain why this question still presumes too much on claimants:

Most SSDI/SSI folks do NOT understand the difference and do not even know what specific benefit they are receiving. Just stating they are different does not help claimants understand that difference. If the Department is going to use SSDI eligibility to deny UI benefits, then the Department needs to explain how claimants can know whether they are getting SSDI or SSI benefits. The SSDI/SSI person with learning disabilities should not be responsible for figuring out this legal distinction that never mattered to them until the cruel ban on eligibility for regular UI was instituted.

The “Did you work?” question is fundamentally broken. The proposed question is:

{Warning only shows if they reported the last day of work within the week they are filing for.}

• WARNING: Either you or your employer reported that you worked during the week ending 12/5/20 when you filed your initial benefit claim. That is the week you are now claiming.

• Because you worked during the week, you must report gross wages.

• If you did not work as reported, contact a claims specialist to correct your last day of work on our record.

• We cannot accept your claim for the week until you have reported your gross wages or corrected your last day of work.

You are filing a claim for the week of 9/13/20 through 9/19/20 (week 38/20 on the Unemployment Insurance calendar)

34. Did you work during this week?

Answer “Yes” if you worked at all in this week. Wages must be reported in the week they are earned, even if they will not be paid until a later week. If you do not report that you worked in a week that you actually did, you may be paid more benefits than you are qualified for and could face penalties, including being charged with a crime.

You will be asked if you received sick pay, vacation pay, bonus pay, holiday pay, severance/termination pay or other types of income in later questions.

If you have questions about whether or not you worked, click the ‘Work and Wage Help’ button for assistance.

I explain why that this question is broken because it does NOT actually reflect the state’s unemployment law:

“Did you work?” presumes hours and wages. Yet, claimants are NOT asked about hours and wages until they answer YES to working. This process is backwards.

Why not use the actual statutory definition of employee: Did you perform ANY services for ANY kind of pay for an employing unit? You will need to report ANY wages or pay you have received or will receive for that service as well as the hours spent in that service. Report the wages or pay even if you are not sure about ever being paid for that service. Later, we will ask you to explain the specific circumstances of those wages or pay as well as the hours spent on those services, if that information is available to you.

Another question about reporting work continues these problems:

47. Did you work for any other employers during this week?

This question is not so simple, however, largely because it does not actually follow unemployment law (as “work” is not actually defined in unemployment law):

Again, DWD is presuming everyone knows what “work” needs to be reported. Confusion about benefit year employers by claimants means many claimants do not think part-time work with another employer needs to be reported. Wallenkamp v. Arby’s Restaurants, UI Hearing No. 13607281MW and 13607282MW (15 May 2014) (available at https://lirc.wisconsin.gov/ucdecsns/4013.htm), aff’d DWD v. LIRC, 367 Wis.2d 749, 877 N.W.2d 650 (2 February 2016), Maurer v. Manpower US Inc., UI Hearing No. 13607416MW and 13607417MW (28 Jan. 2014) (available at https://lirc.wisconsin.gov/ucdecsns/4077.htm). Rather, the question should follow the actual UI statute: Were there any other services for pay performed by you last week?

The focus on reporting work should be shifted to reporting wages and hours of work, period. In regards to questions about reporting various kinds of income and hours of work, I explain:

Instead of focusing initially on what wages should not be reported, have claimants first report all wages and hours. Then, have claimants indicate which hours and wages should be excluded for UI purposes. The point of this process is to get claimants to report as much info as possible without making a mistake. By getting them to exclude from the onset rather than include all relevant info, the claim-filing process is implicitly encouraging claimants to exclude info. Furthermore, the explanation of what “work” should be reported should appear BEFORE the question, not after.

Before asking about sick pay, shouldn’t the Department explain what it means by sick pay? Is sick pay the same as PTO pay, personal time, or vacation pay used to cover an illness (because my employer mandates a doctors note after two days of sick leave and so I used vacation pay instead when taking time off because of ill kids)? By not providing this basic explanation, the Department is essentially inviting claimants to decide for themselves what these categories mean. But, when claimants get the information wrong they pay the price for that mistake, not the Department.

You are asking about sick pay received this week or sick pay that will be received. What about asking claimants about sick pay they received for an older week? Why is the Department uninterested in that info? Shouldn’t the Department at least provide a phone number for claimants to call about reporting that older sick pay?

Also, for sick pay, holiday pay, hours worked, gross wages, and other kinds of pay, WHY isn’t the Department encouraging people to get their pay stubs. Literally thousands of claimants never ever look at their pay stubs, because those documents are on-line only now. So, all they ever see are their bank statements with the net deposits, and the specific breakdown of their pay is never known to them. Claimants can only be accurate if they have accurate information to begin with.

These other pay questions showcase how DWD is putting the cart before the horse. By asking for pay according to all of these categories, the Department should be asking for all pay, period. Then, break down that amount into discrete chunks.

It is much easier for people to drill down rather than to build up from specifics (Sherlock Holmes is the obvious exception, and is why that character continues to amaze us a century later). There is no reason why the weekly claims process should require all of us to become Sherlock Holmes in regards to our weekly income — looking at a piece of info and then gleaning a larger meaning from it.

The summary of reported wages at the end of the claim remains. My feedback:

A summary at the end is generally useless. Claimants need to see a running total AS they fill out this form. That way, they see how their answers actually change the results from question to question. With the current summary at the end, they just see the end result and so will have no way of knowing if they made a mistake somewhere and failed to note that mistake at the time. In short, this summary is just that, a summary. The steps that got to the summary is what folks need to see if you want them to understand possible mistakes WHEN those mistakes are made.

Finally, the job search question fails to establish what actually is required of claimants:

The Department needs to make clear that there are three distinct job search requirements:

  • 4x work searches per week,
  • RESEA (job search training seminar) attendance once per benefit year, and
  • jobcenterofwisconsin.com registration per benefit year.

By only focusing on the job searches and leaving the other two as a kind of job search, claimants easily forget about these other two. The example this past year of tens of thousands of claimants getting their benefits stopped because of the jobcenterofwisconsin.com registration requirement and, of late, the RESEA attendance requirement should make clear how these other requirements need to be emphasized alongside the actual job search requirement.

My spreadsheet with these comments and others is available here.

These problems are already known

In a late-October memo to then Transition-Secretary Pechacek, I wrote the following about bad claim-filing in Wisconsin has become relative to other states:

Warnings are not assistance or guidance

Attached is the list of warnings claimants must agree to have read when filing an initial claim (two sets of warnings, one dated 28 April 2020 and another dated 7 Oct. 2020). These warnings are the “guidance” the Department “offers” claimants. The very nature of this document — multiple pages of text in multiple languages and in scattered bold-faced or regular text — completely ignores basic principles of readability, effective on-line communication, and usability. This document also ignores Dep’t of Labor guidance on limited English proficiency (https://www.lep.gov/) and fundamental web design principles for accessibility (https://www.w3.org/WAI/design-develop/).

Substantively, the document switches between the difficult to understand to the nonsensical. There are no headings to the information and no flow in subject matter. There are links to Department resources for some information, like applying for PUA benefits, when this warning screen appears when filing for PUA benefits in the first place. And, other pieces of information, like the job registration requirement still mandated, have no links or explanation whatsoever.

Finally, the two versions demonstrate that these documents appear quite differently depending on the browser used to view them. They are obviously not designed for viewing and for navigation on a smart phone.

Instead of providing explanations and links and processes that might explain how the claim-filing process works, the Department has instead turned to warnings to keep claimants “in the right.” So, the fraud warning at the start of every claim is nothing but a warning.

Weekly certfification warning

This warning provides no substantive guidance or assistance to claimants in how to answer the questions being asked of them. But, claimants cannot be expected to provide correct answers to questions they do not understand in the first place or do not even know they do not understand.

Note: On the other hand, the Department itself disclaims any accuracy as to its own website and the online portal contained therein.

“Although the data found using the State of Wisconsin’s access systems have been produced and processed from sources believed to be reliable, no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. This disclaimer applies to both isolated and aggregate uses of the information.”

See “Disclaimer of Warranties And Accuracy of Data” at https://www.wisconsin.gov/Pages/Policies.aspx. It does not appear that any other state has such a disclaimer denying the accuracy of its own website or on-line filing portal. According to this disclaimer, all claim-filing information is presumed NOT to be accurate, adequate, complete, legal, reliable, or useful.

Being new and unfamiliar with all the facets and ambiguities of an unemployment claim should not make a person a criminal. Many young people when they first start driving get into accidents simply because they are still learning how to stay safe when driving. And so every accident is not a crime, and the Department should not be presuming every claim-filing mistake is criminal simply because the mistake occurred. Without proper guidance from the Department explaining the kind of information claimants need to provide, the Department’s warnings do little more than assuage the conscience of the Department staffers who charge claimants with concealment when their answers are “inaccurate” or “incomplete.”

Claimants should not be responsible for figuring out the unemployment system

Attached is a chart I created that describes how the various pandemic unemployment benefit programs interact with each other. The Department does not provide anything even close to such a guide.

Worse, the Department seems to be handing off responsibility to claimants to determine whether they should apply for PUA or regular unemployment or even if they should be filing in another state (a problem — admittedly not unique to Wisconsin — is to deny all eligibility to claimants who have any kind of income in another state because the state does not want the administrative burden of that claim). So, a claimant cannot file for PUA benefits in Wisconsin despite living here and running her business in this state because a client in Illinois paid for her services. A claimant who has exhausted regular unemployment benefits is denied PEUC benefits because he did a weekend painting job in Minnesota for $100 and is told to file for regular unemployment in Minnesota despite not being eligible for unemployment there solely for that weekend painting. SSDI recipients are told to still file a claim for regular unemployment benefits before filing a PUA claim, despite the Department declaring they are only eligible for PUA benefits. A flight attendant living in Milwaukee who is based at O’Hare for an airline in still another state is denied an unemployment claim in Wisconsin and told to file in those other states, even though Wisconsin tax with-holdings have occurred with her every paycheck.

Note: Even if the airline company has never paid Wisconsin unemployment taxes for the attendant, she should still be allowed to file either an interstate claim in Wisconsin or a Wisconsin-based claim (with the Department charging the airline company for the unpaid unemployment taxes). Either way, the Department should be assisting the flight attendant with this kind of information rather than just denying her claim outright.

State agencies should not be making claimants responsible for navigating the bureaucracy of the unemployment system. The information gleaned from claimants (after all, the Department has been requesting entire tax returns from claimants) should allow the Department to assist claimants on filing the right kind of claim in the right state.

Note: To that end, the google cloud initiative announced by the Department in an Oct. 19th press release is welcome news. But, the use of “predictive analytics based on historical data” is both vague and similar sounding to what led to the concealment by algorithm problem in Michigan, see “Concealment in Michigan” (3 July 2015) (available at https://wisconsinui.wordpress.com/2015/07/03/concealment-in-michigan/) and “Unemployment concealment in other states” (12 Oct. 2017) (available at https://wisconsinui.wordpress.com/2017/10/12/unemployment-concealment-in-other-states/), that led to a UIPL that specifically prohibited that practice, see “Feds release two important advisories about claimant access” (9 Oct. 2015) (available at https://wisconsinui.wordpress.com/2015/10/09/feds-release-two-important-advisories-about-claimant-access/).

Simply telling a claimant no claim allowed or charging the claimant with an over-payment without any explanation or guidance about other filing options is making the Department into an ogre.

The Department’s online FAQs are targeted to the wrong audience

At the start of the pandemic, I filed open records request to ascertain what internal guidance the Department was creating for administration of the various pandemic unemployment programs. The response I received was that the available guidance for Department staffers were the public FAQs offered on the Department’s website.

As any comparison to other states will reveal, these FAQs provide information in a legalistic manner that address questions adjudicators and claim specialists might have. These FAQs are NOT focused around the kinds of questions a claimants might have or how a claimant will likely want to examine this information. As such, claimants do not learn anything from these FAQs other than changes in Department policies (for instance, when the Department changed the wording in its denial of PUA benefits to the disabled to a declaration that the problem was being looked into, see “SSDI — Waiting for the discrimination to end” (23 July 2020) (available at https://wisconsinui.wordpress.com/2020/07/23/ssdi-waiting-for-the-discrimination-to-end/)).

Other states provide simple answers that are geared to the questions claimants are asking and provide that information in an organized by topic fashion and using good design rather than based solely on a listing of question by question. Here are some examples:

The Department’s forms need updating and correction

Attached is the current claim confirmation form sent out to claimants. This form indicates that claimants are to do four job searches a week even though this requirement has been waived because of the pandemic. Given this false requirement for job searches, claimants are likely to ignore the paragraph below about registering with the Wisconsin Job Service, even if they understand what this registration requirement actually is.

Note: Every state that had a job center registration requirement but Wisconsin has waived that requirement during the pandemic. The formal comments Legal Action of Wisconsin and myself provided on this issue to the Department has not even been acknowledged by the Department. See my e-mail message dated 18 June 2020 to the Department and the attached Department jobregistrationfaq.2013.pdf explaining the then new job registration requirement and the memorandum from Legal of Action of Wisconsin dated 23 April 2020 sent to the Department regarding this work registration requirement. Wisconsin’s RESEA (attending a job search training seminar) is likewise waived in states with a similar requirement, but not in Wisconsin.

This error is not happenstance. Initial claims still mandate at the end of the process that claimants are to do four job searches a week. See attached initial claim checkoff. Other Department forms are also either misleading or simply wrong.

Note: The Department has even begun to fudge the date of its notices. See, for example, the attached appeal confirmation dated 13 Oct. 2020 that was received on Oct. 13th and which was postmarked Oct. 9th.

For instance, the PEUC claim notice (attached) is a single paragraph that simply announces eligibility for PEUC benefits. There is no explanation provided about what PEUC benefits are, how they work, why a claimant might want to apply for them, and what that application entails. In short, this notice presumes that claimants have a full and complete understanding of PEUC benefits and will make an informed and educated decision on their own about what to do next. In contrast, here is how Michigan handles PEUC benefits:

“In addition to the weeks of benefit entitlement on a regular claim, the Relief for Workers Affected by Coronavirus Act adds 13 additional weeks of unemployment benefits in Pandemic Emergency Unemployment Compensation (PEUC). With these additional benefits, individuals may be eligible for up 39 weeks of benefits. You may also receive an additional $600 per week of pandemic federal unemployment compensation (FPUC) in addition to the weekly benefit amount payable. This amount is payable for weeks between 3/29/2020 – 7/25/2020. You do not need to do anything additional to receive the additional 13 weeks of PEUC or the additional $600 of FPUC benefits.”

From https://www.michigan.gov/leo/0https://www.michigan.gov/leo/0,5863,7-336-94422_97241_98585_98650-523035–,00.html (emphasis supplied). Pennsylvania’s information about PEUC benefits is available at https://www.uc.pa.gov/unemployment-benefits/file/Pages/Filing-for-PEUC.aspx. A separate PEUC application is needed in Pennsylvania, which provides the already referenced information page, a brochure concerning PEUC benefits (available at https://www.uc.pa.gov/unemployment-benefits/file/Documents/PEUC%20Brochure_UCP-26%20REV%2005.12.docx) and the actual application form (available at https://www.uc.pa.gov/unemployment-benefits/file/Documents/PEUC%20Application_EUC-8%20REV%2005-20.pdf) which are automatically sent to claimants when their benefit year is exhausted.

There are other examples. The PUA claim process wrongly limits eligibility for PUA benefits to claimants who have lost work because of business closures, even when PUA benefits are allowed for partial loss of work, period.

Note: Of 48 SSDI recipients for which I have a known result with their PUA claims, ten have been denied because their workplace was not technically closed even though both employee and employer indicate that employee was laid off, not recalled, or had their hours reduced because of the pandemic. A request for determination rationales to explain how benefits can still be denied or a request to resolve this non-factual outcome short of a hearing have fallen on deaf ears.

And, the on-line claim questions about able and available status do NOT comply with state statutes and regulations. See “Being able and available when disabled” (23 Sept. 2020) (available at https://wisconsinui.wordpress.com/2020/09/23/being-able-and-available-when-disabled/).

I could go on with the other ways unemployment has been turned inside out in this state. These numbers suffice. In 2018, the number of claimants receiving unemployment benefits was 130,710. In 2019, that number was 129,888. In 2007 and prior to any recession, the number of claimants who received unemployment benefits in Wisconsin was nearly three times higher: 332,982. Needless to say, the entire claim-filing process for claimants is in need of an overhaul after what has been done to it.

Comparison with what was

In 2007, here are ALL the questions that claimants were asked during their weekly certification (which they could even do back then through a technological marvel called a phone call):

  1. During the week, were you able to work full-time and available for full-time work?
  2. Did you contact at least two employers during the week to try to find work?
  3. During the week, did you refuse an offer of work?
  4. During the week, did you miss any work the employer had scheduled for you?
  5. During the week, did you quit a job?
  6. During the week, were you fired from a job?
  7. Did you work during the week?
  8. Did you receive or will you receive holiday pay for the week or any part of the week?
  9. Did you receive or will you receive vacation pay for the week or any part of the week?
  10. Did you receive or will you receive dismissal pay for the week or any part of the week?
  11. Were you self-employed?

And, you could read in 2009 a Handbook for Claimants that went through each question and the answer the Department expected from you.

Rather that addressing the flaws in these questions and improving the guidance, the Department has instead made the process infinitely more complex and actually provided less guidance than what was previously available. Cf. this 2020 Handbook for Claimants.

Today, filing an unemployment claim is the equivalent of filing a full 1040 tax return but without any instructions or advice available about how to actually provide all of the required information.

Putting in the work to see what is going on reveals just how broken the claims-filing process truly is. The Department should know better but is pretending that a few creases and some folds there will smooth over all the problems and somehow transport the state back to what existed in 2007.

Unemployment was completely undone in the 2010s in this state, and pretending otherwise provides a monumental dis-service to all involved.

Additional avenues for feedback

The Department has also announced a focus group done on zoom sometime in mid-January 2021. Those interested in participating will need to fill out a survey that asks for your contact info.

Update (13 Feb. 2021): added graphic for post.

Unemployment delays, part 5

Previous posts detailed the length of time and number of cases in the unemployment backlog in part 1, some of the mistakes by the Department that allow cases to be re-opened in part 2, a place for stories and advice about how to find assistance in part 3, and how most claims in Wisconsin — and unlike in other states — are being denied and thereby creating a ginormous backlog in hearings in part 4.

The Department announced at the end of 2020 that the claims backlog had been cleared and that Transition Secretary Pechacek was now Secretary-Designee for the Department. According to the Department:

“Since the start of the pandemic, our top priority at DWD has been ensuring that all eligible unemployment claims in Wisconsin are paid as quickly as possible,” Pechacek said. “Today, I am proud to say we have reached our goal to clear the backlog of claims. The tireless work of DWD staff has made it possible for UI to resume its seasonal level of timeliness in January. I look forward to implementing further enhancements to our UI processes to continue to improve services to Wisconsinites who are out of work through no fault of their own.”

Unfortunately, hard data is not available. The Department’s weekly data post was last provided on Dec. 22nd, and the Department has revealed this week that the daily initial claims data will no longer be provided in lieu of a weekly summation.

The Department’s previous weekly data reports provide running totals of claimants paid unemployment benefits, initial claims that were filed, and the number of claimants still waiting on their claims to be adjudicated. When combined into one document, simple math in a spreadsheet allows for weekly changes in these totals to be tracked, and those weekly totals reveal that the “backlog” has largely been “fixed” by denying initial claims.

Claims procesed by week

The first, brown line shows the weekly change in the number of initial claims filed by week. This data was reported in May 2020, whereas the rest of the data was not first reported until August 2020.

The green, triangle line reveals the number of claimants by week reported by the Department as being paid regular unemployment benefits. Until late December, this weekly number was the lowest being reported.

The purple, triangle line shows the weekly change in the number of claimants who were either not paid or denied regular unemployment benefits (initial claims minus paid claimants). Until early December, this number kept increasing until it plunged to under 5,000 for the 12/15/2020 data release.

The red, hourglass line shows the weekly change in denied claims (initial claims minus paid claimants and then minus claimants still waiting on adjudication). This number jumped markedly for the 9/29/2020 data release, then continued to increase by 10,000 a week to over 16,000 a week by the first December report. And, each subsequent week in December saw an even greater number of initial claims being denied, such that in the last two weeks there were more claims being denied than initial claims being filed (a difference of more than 10,000 for the final week of data).

Initial claims and claimants are not exactly interchangeable numbers, as there are circumstances where an individual claimant can have more than one initial claim. But, initial claim data is generally understood as a good proxy for the number of claimants in an unemployment system, and so is the statistic used in unemployment circles to assess how many actual people are filing claims because of job loss, especially since weekly claims data only really measures the number of claimants who have had their claims approved and are receiving benefits or are in the process of receiving benefits.

Because the Department has continued to rely on weekly claims data, the Department has under-reported the claims backlog and has completely missed the growing number of claims getting denied.

In a late-October memo to then Transition-Secretary Pechacek, I wrote the following about this counting problem:

Currently, the Department has been reporting weekly claims data as descriptive of how the Department has managed its pandemic response (more than 90% of weekly claims have been paid is a common talking point of the Department’s). Weekly claims data provides a measure of the financial drain on the unemployment trust fund and says little to nothing about the actual number of initial claims that have been filed with the pandemic or how many of those claims have actually been processed by the Department. Weekly claims data only indicates the number of weeks of benefits that have been claimed and so provides a measure of the “draw” on the unemployment trust fund. This statistic says nothing about the number of people who have denied their claims and those still waiting on their claims to be decided.

If you want to know how the Department is actually doing with its processing of unemployment claims, the traditional measures are around first payments and the average number of days needed for various steps (first payments, adjudication, and appeal tribunal decision). While the Department refuses to provide this data in response to queries, the Department must provide this data to the Dep’t of Labor. As a result, anyone conversant with unemployment has access to this data.

The picture this data paints is horrendous. Through the end of August, Wisconsin reports 918,757 initial claims connected to the pandemic (initial claims filed in March through August) and only 294,571 first payments for those same months, a percentage of 32.06%. Prior to the pandemic (the months from January 2018 through February 2020 — two years and two months), there were 632,728 initial claims and 245,558 first payments, a percentage of 38.81%. Not only are these percentages some of the lowest in the nation, Wisconsin may be the only state that has actually experienced a decline in first payments during the pandemic.

Note: Dep’t of Labor data for PUA claims filed from March thru August indicate that Wisconsin has paid 30.96% of 103,511 PUA initial applications. The percentage in other states is starkly better: North Carolina with 257,718 PUA initial claims is at 74.45%, Minnesota with 108,110 initial claims is at 86.87%, and Florida is at 88.91% for 329,289 PUA initial claims. Even Illinois with 335,533 initial PUA claims is at 45.15% (and without any August data).

And, denial rates have actually increased since the pandemic started, particularly for reasons that have nothing to do with an actual separation from work (i.e., a failure to follow a Department claim-filing requirement).

Proporation of denials by separation and non-separation reasons

The data for when the Department first pays unemployment claims shows a major breakdown here as well. The Dep’t of Labor requires that 87% of all first payments must be made within 14 days (waiting week) or 21 days (no waiting week) and 93% within 35 days. See UIPL 21-04 (18 May 2004) (available at https://wdr.doleta.gov/directives/attach/UIPL21-04.pdf). First payment rates have plummeted in Wisconsin.

Timeliness of first payments

This combination of more claims being denied alongside the increased delays in paying claims that are eventually approved creates a second bottleneck at the adjudication stage. For the months from March through August of this year, only 52.58% of appeal tribunal decisions have been issued within 30 days and 78.73% on average have been issued within 45 days.

Note: The Dep’t of Labor threshold is 60% and 80% of these decisions, respectively.

These numbers are only going to get worse. At the end of August 2020, there were 9,655 cases pending before appeal tribunals, roughly 9x the number of pending cases that existed on a monthly basis prior to the pandemic. Granted, many of these cases are nonsensical and lead to quick hearings (since the administrative law judge is simply recognizing the obvious, like the claimant was laid off because of the pandemic). But, the administrative sludge created by this crush of cases is having its natural effect of short tempers among staffers at all levels and claimants giving up in the face of these mindless obstacles. As I explained in “Unemployment delays, part 1” (16 Sept. 2020) (available at https://wisconsinui.wordpress.com/2020/09/16/delays-part-1/):

“At the end of March, some major problems and bottlenecks in the claims-filing process were identified [https://wisconsinui.wordpress.com/2020/03/31/claims-and-phone-calls/]. Other than what was noted then, many of those bottlenecks continue to exist.

“On May 12th, as the claims piled up, processing delays were enormous [https://wisconsinui.wordpress.com/2020/05/12/backlogs-with-claims/]: a month was needed just to process a faxed or mailed document for an unemployment claim and more than a week just to get a document recognized by the hearing office after being received.

“Now in mid-September it still takes around 30 days for a claim document sent by mail or fax to be processed. And, information sent to a hearing office still takes 5+ days to be processed. Furthermore, while the clogged phone lines to reach a claim specialist have been opened up, it is now incredibly difficult to contact the hearing office by phone. In my experience, it takes numerous phones calls over a day or two and then a hold of 30 to 70 minutes or more before I can get through to a hearing office staffer.”

And, there is no glimpse of a decline in unemployment claims anytime soon. Right now, initial claims are on the rise, and the trajectory of the pandemic in the nation and in Wisconsin indicates that the situation is likely to get worse (week 11 was 1:1).

Ratio of 2020 to 2019 initial claims by week

As of week 42, nearly 1 million initial claims have been filed in Wisconsin, and there are close to 120,000 PUA claims that have been filed (the approximate number of regular initial claims paid in all of 2019 or 2018). The unemployment system as currently designed and implemented is designed to stymie successful claims. Whereas before the pandemic folks simply gave up on unemployment and found low-wage work as a substitute, those job options are no longer available at the moment. So, not only will there never be a clearing of the claims backlog under the current system, but a tidal wave of cases will be created at the hearing stage regarding people will be challenging the unjust denial of their claims. Major change in how the Department handles unemployment claims is the only way to escape a new meltdown and political fallout.

On 14 December 2020, the Legislative Audit Bureau released an audit report on the Department’s claims-processing delays. The results of that audit bares out what I indicated back in October.

First, the audit revealed that the number of claimants waiting on their claims was much larger than being reported by the Department:

As of October 10, 2020, DWD had paid 493,504 of the 662,731 individuals (74.5 percent) who had filed initial claims for regular program benefits since March 15, 2020, but it had not paid the remaining 169,227 individuals (25.5 percent). DWD may not have paid these individuals because it had not yet resolved their claims, it had denied their claims, or the individuals had withdrawn their claims. The data we obtained from DWD did not indicate the reasons why DWD did not pay these claims.

Report 20-28 (Processing Certain Unemployment Insurance Claims) at 6. In comparison, in its October 13th report, the Department indicated that the weekly claims “in process” were only 8.12% of the weekly claims filed — a figure three times smaller than the actual number of claimants still waiting on their claims.

Second, the audit revealed that over three quarters of all initial claims were being adjudicated rather than just approved (as typically happens when both employer and employee report a layoff and there are no other “issues” discovered in the documents):

We found that DWD placed into adjudication the initial claims of 514,026 of the 662,731 individuals (77.6 percent) who filed claims from March 15, 2020, through October 10, 2020. DWD may place a given claim into adjudication because of multiple issues. As of October 10, 2020, 96,623 of the 514,026 individuals (18.8 percent) still had initial claims in adjudication.

Report 20-28 (Processing Certain Unemployment Insurance Claims) at 9.

Third, the audit bureau randomly sampled 268 individuals to assess how quickly the Department processed their claims.

our file review found that DWD had resolved the initial claims of 250 of the 268 individuals (93.3 percent) as of November 2020. DWD’s data indicate that 70 of the 144 individuals whose initial claims DWD had denied subsequently filed new claims after April 11, 2020. As of October 10, 2020, 34 of those 70 individuals were paid program benefits.

Report 20-28 (Processing Certain Unemployment Insurance Claims) at 12. The audit bureau concluded:

it took an average of 13.0 weeks to resolve the initial claims of the 250 individuals in our file review. We estimate that it took an average of 11.5 weeks to deny the claims of the 144 individuals and an average of 15.5 weeks to pay program benefits to the 103 individuals.

We estimate that DWD was responsible for 11.0 of the 13.0 weeks (84.6 percent) that it took, on average, to resolve the initial claims of the 250 individuals. For example, DWD was responsible for time that elapsed before it requested information it needed from individuals and employers, and for time that elapsed after it had the information necessary to pay or deny program benefits but did not do so. In contrast, DWD was not responsible for time that elapsed while it waited for individuals and employers to provide information it had requested.

Our file review found more than 950 instances when DWD was responsible for time elapsing while it processed the initial claims of the 268 individuals. The 268 individuals each experienced, on average, more than 3.5 instances when DWD was responsible for time elapsing during initial claims processing. A given claim could have multiple instances if, for example, time elapsed before DWD requested information from individuals or employers, and then additional time elapsed after DWD received the information.

This last point reveals a state agency overwhelmed with so much work that staffers cannot even look at case files in a timely way. Unlike every other state, however, Wisconsin has NOT changed its adjudication process whatsoever in the face of the pandemic (CA: weekly claims allowed every other week; every other state but WI: waiving investigation of benefit year separations for pandemic-related job losses, since employer accounts are not charged for any benefits connected to such job losses).

So, the delays revealed by the audit bureau are a natural consequence of Department staffers still trying to do the same job they have been doing for the last few years alongside the same denial criteria and impulses without any pressure from above to approve claims or altering the adjudication process in light of the tidal waive of claims connected to the pandemic.

Given that most initial claims are being denied, all the problems revealed by the audit bureau are making their way to the hearing office. Simple errors are popping up all over the place, for no other reason than because staffers and administrative law judges are being overwhelmed with their workload. Hearings are generally short — since eligibility facts are already in the investigatory record and just need to be entered into the hearing record. But, getting all those decisions written and properly entered is causing problems I have never seen to this extent before. Almost every case now is falling into limbo because of some processing error that hearing office staffers now are having great difficulty fixing.

My December has been about as bad as it has ever been with this pandemic. And, given the skyrocketing number of claims that were denied in December, I suspect that these hearing office problems are only expanding.

We are in for a world of hurt for 2021, I fear.

Update (5 Jan. 2021): tjm4 has a review of the ongoing claims-handling problems at the Department, and the Racine Journal-Times details these on-going problems as systemic.