Unemployment taxes and personal tax liability for employers

Claimants are not the only folks having trouble with unemployment.

Many employers think that incorporation protects them from individual liability. Not so. In particular, for unpaid unemployment taxes there are specific provisions for holding an individual owner of a company (and others, see below) responsible and liable for unpaid unemployment taxes. Besides interest and penalties, the Department will work out payment plans, intercept tax refunds, place liens on property, revoke professional licenses, levy bank accounts, and even garnish wages from later employment to recoup unpaid unemployment taxes.

In 2013, the Department proposed several changes to make it easier for employers to get the administrative penalties and interest connected with unpaid unemployment taxes waived. See Memorandum RE: 27 November 2012 DWD legislative proposals to Advisory Council (13 Jan. 2013) at 46-50. And, prior to the Great Recession, the Department had created a special work group to assist new employers with understanding unemployment issues and taxes.

Somewhere along the line, the Department changed course, particularly with small employers. The work group to assist employers disappeared, and the Department started pursuing anyone connected with small employers for unpaid tax liabilities despite those collections efforts being legally deficient.

The Department also began changing the law of personally liability in ways that were not acknowledged at the time.

Wis. Stat. § 108.22(9) sets forth the personal liability provision in unemployment law. Under this provision, a person is personally liable for unpaid unemployment taxes when the following four criteria are met:

1. That person is an officer, employee, member, manager, partner, or other responsible person of an employer,
2. That person has control or responsibility for paying unemployment taxes,
3. That person willfully fails to pay those unemployment taxes, and
4. That person was subject to proper collection efforts by the Department.

Prior to 2015, Wis. Stat. § 108.22(9) (the 2013 version) varied significantly from its current form. The requirement for being a “responsible person” was first put forward statutorily by the Department itself in proposal D15-05 (19 Feb. 2015) to the Unemployment Insurance Advisory Council and was enacted in § 91 of 2015 Wis. Act 334. While the proposed change was described as a way of making sure members of a partnership could be found liable for unpaid unemployment taxes, the proposal also indicated that the scope of personal liability was limited to “responsible persons.” As explained in the Department’s proposal:

This proposal will create a more level playing field because it will ensure that responsible persons are not able to avoid personal liability for unpaid UI contributions simply because they chose a particular form of business entity. It also provides flexibility for the department to impose personal liability if the Legislature creates other business forms (such as a Low-Profit Limited Liability Company or “L3C”).

Proposal D15-05 at 2. In a memorandum dated 19 March 2015 that was provided to the Advisory Council, the Department offered an explanation of what it considered to be a responsible person based on both state income tax rulings as well as Commission precedent.

The proposed amendment to section 108.22(9) is designed to permit an assessment of personal liability for unpaid unemployment insurance contributions against individuals who, by nature of their “status, duty and authority,” are responsible for filing the contribution reports and paying the taxes. This is similar to the way that LIRC currently interprets section 108.22(9) and is consistent with the federal IRC and the Wisconsin Revenue Statute.

Memorandum to the Unemployment Insurance Advisory Council (19 March 2015) at 2. As explained in this memorandum:

the Tax Appeals Commission, which reviews assessments of the Wisconsin Department of Revenue, has interpreted the term “responsible person” broadly and it “gauges responsibility by examining whether the person had the actual or de facto authority to withhold, account for, or pay the taxes, the duty to pay the taxes, and whether the person intentionally breached that duty.” Sandberg v. Wisconsin Department of Revenue, Wisconsin Tax Appeals Commission, ¶401-491, (Nov. 18, 2011).

And the Tax Appeals Commission held that “the responsible person determination is pragmatic and based on considerations of substance, rather than form. It boils down to the fact that the crucial inquiry is whether the person had the effective power to pay the taxes — that is, whether he had the actual authority or ability, in view of his status within the corporation, to pay the taxes owed.” Id (internal citations omitted). The Tax Appeals Commission in Sandberg found that the son of the business owner was not a “responsible person” for the purposes of the Wisconsin Revenue Statute because “evidence showed that the business, in fact, was a ‘one-man show’ where his father, Kenneth Sandberg, was ‘that man.'” Id.

Id. (footnote omitted).

So, it would seem that individual liability should be limited to those owners and individuals who have designated or actual authority for unemployment tax matters, regardless of the title or status of that person. After all, the persons actually responsible for paying unemployment taxes should be the person liable for those taxes when they go unpaid, not any possible director or even employee of the company.

And, that perspective made sense until Proposal D17-07, in which the Department proposed eliminating the 20% ownership threshold. The change was explained this way:

And, the fiscal impact, according to the Department, was minimal:

Trust Fund Impact: This proposal would have a negligible but positive impact on the Trust Fund. Without the 20% threshold, this change would streamline investigations into assigning the debt. Some nonprofits do not have a clear owner, so this may make assigning personal liability in cases involving nonprofits easier. However, in general, individuals the department is trying to assign personal liability to already meets the 20% threshold and thus would not result in a significant impact to collections.

Proposal D17-07 (23 May 2017) at 19. The Advisory Council approved of this change, and it was enacted as part of 2017 Wis. Act 157.

So, because the Department re-wrote this individual liability law broadly, it is now free to ignore its own arguments about how the targets of the Department’s collection efforts would be limited. So, the Department for the past several years has expanded who it targets for debt collection to include ANY employee or individual in its discretion it thinks it can collect from.

A December 2020 decision by the Labor and Industry Review Commission concerning a sprawling, for-profit enterprise illustrates just how expansive these debt collections efforts have become: Rice Mgmt., Inc. et al., UI Hearing Nos. S1900089MW-117MW (Kevin Breslin), UI Hearing Nos. SI900262MW-290MW (Robert Parkins), UI Hearing Nos. S1900291MW-319MW (Mary Jo Parkins), UI Hearing Nos. S1900320MW-348MW (Gina Mignano), and UI Hearing Nos. S1900349MW-77MW (Anthony Carriero) (30 Dec. 2020)

Note: In the briefing before the Commission, I represented one of the individuals pursued for debt collection, the assistant controller, Anthony Carriero.

The Department only pursued two out of five partners, all of whom raked in millions (the two were Kevin Breslin and Williams Burris, Jr.,, and Burris settled his case with the Department prior to hearing and withdrew his appeal) for collection efforts. But, several lower level employees and former employees were targeted (including an assistant controller, who reported to a controller, who reported to a CFO, who in turn reported to a managing partner), apparently for no other reason than that the Department had their names and contact information.

Of the four requirements for personal liability, both the administrative law judge and the Commission found that the second and third factors were obviously not met for the defendants other than Breslin. But, in examining the first requirement, the Commission provided the first extended analysis of all the changes the Department has wrought, and the result shows just how broad debt collection in unemployment law now reaches.

This part of the statute has undergone some changes in recent years. Prior to 2015, the statute provided that before a person could be found personally liable, the individual had to be “an officer, employee, member or manager holding at least 20% of the ownership interest of a corporation or of a limited liability company” subject to Chapter 108. In 2015, the legislature changed this so that the individual could be “an officer, employee, member, manager, partner, or other responsible person holding at least 20 percent of the ownership interest of a corporation, limited liability company, or other business association” subject to Chapter 108. It appears that the impetus to broaden the statute in 2015 was to include managing partners of limited liability partnerships as persons who could be found personally liable for the contributions owed by an LLP, and to ensure that those people could be found responsible even if they chose another business entity. However, if the person did not own 20% of the business, the condition still was not met. In 2018; the statute was changed again, and it now provides that before a person can be found personally liable for an organization’s unpaid unemployment insurance taxes, the first condition that must be met is that the person must be or must have been “an officer, employee, member, manager, partner, or other responsible person of an employer…”

As the appeal tribunal noted, there is little case law on the first condition with the new statutory language. Previously, the analysis for this condition was focused on whether the individual owned 20% of the business and the nature of the business. With the recent law changes, the legislature has expanded who can be found personally liable to persons beyond the listed titles and without regard to ownership, and it has expanded the application of the law to any employer rather than just to corporations, limited liability companies, or other business associations.

The appeal tribunal paraphrased this condition as requiring that the individual “has a special relationship with the company.” Under this interpretation, in addition to determining whether the individual was an officer or employee, etc., the appeal tribunal questioned whether the individual was also a “responsible person” of the employer and analyzed whether the individual’s particular duties made that owner, officer, or employee a “responsible person” of the employer. In this reading of the statute, the word “other” in the statute was read to imply that any officer or employee, etc., must also be a “responsible person” as well, and, therefore, the decision maker must decide whether the person is a “responsible person” under this first condition in addition to determining whether the person was an officer or employee, etc. In the Carriero decision, for instance, the appeal tribunal found that the words “or other responsible person of the employer” now acted to modify the word “employee” to differentiate employees who have greater responsibilities from those who do not.

While it is true that an individual may not be found personally liable unless the individual was responsible to pay the unemployment insurance taxes, the commission concludes that this analysis is generally more appropriately addressed under, the second condition, where the commission has historically examined whether an individual is a “responsible person” for purposes of personal liability. This is consistent with the federal case law, which looks at who has a duty to collect and pay over the tax as a “responsible person.” It is thus not necessary to duplicate the analysis for both the first and second conditions, as the appeal tribunal did here. With this reading of the statute, the first condition is fairly simple. If the individual is an officer, employee, member, manager, or partner of the employer, the condition is met with no ownership requirement. The appeal tribunal essentially acknowledged this in one set of decisions by noting, e.g., “Mr. Parkins had no stake in the LLC, but he was indeed an officer, so he therefore satisfies this element.” It is also possible that someone who does not have the status of an officer, employee, member, manager, or partner of the employer could be found personally liable if that person had other authority or was otherwise responsible for the business of the employer, such as a financial agent or a family member. Only if a person is not an officer, employee, member, manager, or partner of the employer, is it necessary, for purposes of this condition, to determine whether the person is an otherwise responsible person of the employer. This clarifies the first condition and also avoids unnecessary duplication of the analysis of whether a person is also a “responsible person” for the payment of unemployment insurance contributions under the second condition.

* * *

Accordingly, each of the putative debtors was at least an officer, employee, member, manager, or partner of the employer.

Rice Mgmt., Inc. et al. at 21-2 (footnotes omitted, emphasis in original). In other words, this first requirement will only really matter when the Department is pursing an individual who has no direct, formal role with the debtor employer (such as the employer’s legal counsel or accounting form). In all other cases, it is met if the person has any connection at all with the debtor employer.

Note: This reference to legal counsel should indicate to the lawyers out there just how far reaching this individual liability could extend. I could see the Department now easily extending personally liability to the attorneys who could have prevented the unemployment taxes from going unpaid, since such a claim is similar if not identical to what the Department argued in this case for the non-partners.

As demonstrated in Rice Mgmt, the second and third requirements still follow traditional analysis and requirements. So, individuals who are not actually responsible or in control of tax liabilities may still avoid personal liability.

But, the fourth requirement — service of proper collection efforts — has, like the first requirement, in practical terms become a non-issue. Previous to all of these changes, notices of unpaid taxes to the corporate entity would be served on the corporate premises, and so those who controlled the company would also have notice. Now, with the number of possible debtors expanded to employees and even persons who have no formal connection at all to the company, they will have no idea about these unemployment debts and the associated collection efforts until charged with personal liability. In this Rice Mgmt case, for instance, Robert Parkins had left the company in early 2017, around six months before any collection efforts were undertaken. Yet, this fourth requirement was satisfied by the Department against him.

The Commission decision is lengthy (40 pages) but deserves a close and extended reading. As numerous employers may not have survived the pandemic, many may find the Department knocking on their doors — and the doors of others — about unpaid unemployment taxes. This decision is the current legal framework for these cases.

Job searches are back

Update (21 May 2021): The Department has announced on its job search FAQ that the four job search actions per week will NOT apply to claimants receiving PUA benefits.

Note: If your PUA eligibility changes or the circumstances connected to your work search waiver change, then you WILL be required to do job searches, including for weeks that have already passed. So, having the job search requirement waived for now does NOT mean it might apply to you later for weeks that have already happened.

The Joint Committee for Review of Administrative Rules met today and voted to immediately suspend the waiver of job search requirements and pandemic-related able and available provisions contained in EmR2106.

Here is what claimants need to know.

Four job search actions are required starting Sunday, May 23rd

Starting Sunday, May 23rd, all claimants will need to do four job search actions every week. What are those actions?

Notice that the Department now expects claimants to retain (for 52 weeks!) their job search records and provide proof for each job search action (for those 52 weeks!).

Even if you cannot do a weekly claim certification at the moment (for instance, because your PUA benefits are on hold), you should still do four job searches and keep records of those searches for any week starting on May 23rd or later.

The work search log files are available here in DOC and PDF formats. More directions for how to complete these forms are available here.

When filing your weekly claim certification, you will be prompted with the following screen:

After “agreeing” to these requirements, you are then prompted to begin entering each work search action:

As already noted, keep your job search records for one year, as the Department audits all job searches at some point and has up to a year to do an audit of any claimant after that claimant starts filing his or her weekly certifications. In other words, the Department is sure to audit your work searches at some point. Indeed, at the public hearing today, Department representatives stated that more than 75% of work search reviews lead to weekly certifications being denied.

Loss of pandemic-related able and available provisions

Besides waiving the four job search actions in a week requirement, EmR2106 also provided some important waivers of able and available requirements related to the pandemic. Those provisions are also gone as of May 23rd, and so workers will need to be able and available for work regardless of any pandemic-related concerns.

Workers receiving regular unemployment benefits or PEUC benefits who have Covid-19 symptoms or who are quarantined by a medical provider will now need to report to work regardless of the impact on their health or public health in general.

Update (20 May 2021): Broke out the above paragraph into two, fixed some typos, and added emphasis in places.

Other ‘job search’ requirements

Job center of Wisconsin registration

This registration requirement has remained unchanged and unaffected by the pandemic. Once done, your job center of Wisconsin registration should look like:

After a certain number of months, you will need to renew this registration.

Job search training seminar (RESEA)

This attendance requirement has remained in place throughout the pandemic. As noted previously, the Department switched from attending an in-person seminar to a seminar done through e-mail, on-line communications, and phone calls.

Sen. Nass wants job searches back

On May 7th, Sen. Nass announced in a press release:

The Department of Workforce Development has the power to end the emergency rule early on its own authority. Unfortunately, Governor Evers and his administration is ignoring the critical shortage of workers impacting almost every sector of the state’s economy. The legislature will act quickly to restore the work search requirement.

* * *

We need every able-bodied person to re-enter Wisconsin’s workforce to rebuild our economy. In the current situation, nearly every person on UI should be able to find employment in a short time if required to seek work.

A man of action, Sen. Nass has scheduled a public hearing and then a vote to repeal the current work search waiver and pandemic-related able and available provisions for May 19th, starting at 1:30pm, in Room 411 South of the Capitol.

There are some obvious problems with what Sen. Nass is proposing here:

• “Impact” is not a verb (despite the folks at American Heritage Dictionary relenting on this issue).
  
• Wisconsin’s workforce is not 100% able-bodied. As pointed out in the history of the SSDI eligibility ban, more than 5% of the state’s workforce receives SSDI benefits. Is Sen. Nass accepting that the job search waivers continued to exist for SSDI recipients receiving PUA benefits? What about the very few disabled workers who do not receive SSDI benefits?
  
• Sen. Nass is presuming facts not in evidence.
  
  First, Wisconsin over the last decade has experienced exceptionally slow economic growth, slow to declining job growth, and a stagnant or declining population relative to its neighbors. See this post or this post for examinations of recent economic and jobs statistics.
  
  Second, Wisconsin’s unemployment benefits are not an issue with part-time work. As explained here, Wisconsin’s partial wage formula for unemployment benefits actually encourages unemployed workers to work because those workers can continue to collect their unemployment benefits as well as wages from their jobs. So, restaurant and retail workers where part-time jobs dominate, can usually receive both wages from their jobs and partial unemployment benefits as well as the $300 PUC payments. In other words, these workers would be working if they could, and they probably are working.
  
  Jake had additional information about how unemployment eligibility has nothing to do with the national jobs data at this post, this post, and this post.
  
• This return to job search requirements is actually intended as a way to slow down the growth in wages paid to workers.
  
  The playbook in Wisconsin over the past decade has been to increase the supply of potential workers, especially at the low end of the wage scale, in order to keep those wages from rising.

Note: Classic supply and demand curves indicate that the more supply of something means a lower price for that something. Likewise, when demand for something is up, the price for that item will increase. In labor economics, then, wages go down when the supply of labor goes up.

That was why legal and administrative changes in unemployment were undertaken in 2013 thru 2017. By making unemployment harder to receive, workers had to turn to low wage jobs immediately to make ends meet. And so, with the supply of workers seeking low wage jobs inflated, wages in Wisconsin were kept low.

Sen. Nass knows that demand for workers is up. So, all he can think about right now is to increase the supply of workers by making unemployment harder to get — right out of the playbook from the past decade.

The problems with this thinking, as noted above, is that unemployment benefits right now really have nothing to do with the labor supply problems at the moment. All that will really be achieved is some additional financial pain and heartache for folks who get caught up in the job search requirement.

At present, the emergency rule with pandemic-related provisions and waiver of the job search requirement, EmR2106, is slated to expire on 10 July 2021.

Maybe in July 2021, the economic impact of the pandemic may finally be waning. But, right now in the middle of May 2021, no one can say that the pandemic is over. Indeed, there are thousands of people still waiting on their unemployment benefits from losing jobs in March and April 2020. Forcing job search requirements again when vaccinations in the state are just over 45% as of May 16th is ridiculous.

The members of the this committee who should hear from you are:

• Senators: Nass (Co-Chair), Stroebel, Bradley, Roys, Larson
• Representatives: Neylon (Co-Chair), August, Spiros, Subeck, Hebl

Documentation for PUA claims

Update (24 May 2021): The May 20th deadline date listed below is a general guess at what the Department is doing. The documentation date for your specific case will vary. For example, those who are just being paid PUA benefits now and whose PUA claims include weeks from the summer of 2020 will probably have until late August 2021 to provide the required documentation. And, those who have new PUA claims that start no earlier than December 2020 will only have 21 days from their initial claim date to provide the requested documentation.

The intent here is to proactive and provide the required documentation ASAP to avoid the administrative sludge being created for you here.

Update (13 May 2021): Here is a PDF document I prepared for folks in a support group that will be contacting others about this PUA documentation requirement.

The Continued Assistance Act included a new documentation requirement for PUA claims. In my original post on the Continued Assistance Act, I explained:

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.

This documentation requirement only applies when PUA benefits are paid for weeks in 2021. If you only collect PUA benefits for 2020 weeks claimed, then you do NOT need to provide this additional documentation.

But, those PUA claimants who have filed for PUA benefits for weeks in 2021, you NEED to provide this documentation even if you have previously submitted this same documentation to the Department already.

And, this documentation MUST be submitted VERY SOON. The Department sent this notice dated 19 Feb. 2021 to many claimants and indicated that the documentation had to be submitted within 90 days of this letter. That means the documentation MUST BE SUBMITTED to the Department no later than 20 May 2021.

So, 20 May 2021 may be when additional documentation is due in your case.

This additional documentation needs to be mailed to:

PUA
PO Box 7905
Madison WI 53707

Or faxed to 608-327-6193. Include a cover page that states: ATTN: PUA, your full name, your social security number, and the number of pages being faxed.

Make sure to keep a copy of what you send in as well as a record of when you mailed or faxed this documentation in.

For those PUA claimants who are filing certifications for weeks in 2021, below is the kind of documentation you need to provide the Department, organized by the type of reason for your PUA benefits. Note that many of the PUA claim reasons do not require any documentation. Only those reasons connected to a loss of employment because of the pandemic require this additional documentation. Here is what you need to provide (if “no additional documentation needed” is listed below, then you are fine and do not need to support any additional documentation).

PUA claim reasons

I have been diagnosed with COVID-19 or am experiencing symptoms of COVID-19 and am seeking a medical diagnosis.

No additional documentation needed.

A member of my household has been diagnosed with COVID-19.

No additional documentation needed.

I am providing care for a family member or a member of my household who has been diagnosed with COVID-19.

No additional documentation needed.

A child or other person in my household for which I am the primary caregiver is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for me to work.

No additional documentation needed.

I am unable to reach my place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency.

No additional documentation needed.

I am unable to reach my place of employment because I have been advised by a health care provider to self-quarantine due to concerns related to COVID-19.

No additional documentation needed.

I was scheduled to commence employment and do not have a job or am unable to reach the job as a direct result of the COVID-19 public health emergency.

Letters offering employment, statements/affidavits by individuals (with name and contact information) verifying an offer of employment.

If self-employment was slated to start up but was halted because of the pandemic, provide business licenses, state or Federal employer identification numbers, written business plans, a lease agreement, or some other documentation of the planned start of the gig work.

I have become the breadwinner or major support for my household because the head of the household has died as a direct result of COVID-19.

No additional documentation needed.

I quit my job as a direct result of COVID-19.

No additional documentation needed.

My place of employment is closed as a direct result of the COVID-19 public health emergency.

Paycheck stubs, earnings and leave statements showing the employer’s name and address, or W-2 forms.

For employees of such organizations like the Peace Corps, AmeriCorps, and educational or religious organizations where traditional employment relationships may not exist, there are additional options, like documentation of work being done provided by these organizations or signed affidavits from persons verifying the individual’s attachment to such organizations is allowed.

I am self-employed (including an independent contractor and gig worker) and experienced a significant reduction of my customary or usual services because of the COVID-19 public health emergency.

State or Federal employer identification numbers, business licenses, tax returns, business receipts, screen shots of documented earnings and work performed and the dates for such work, or signed affidavits from persons verifying the individual’s self-employment

I was denied continued unemployment benefits because I refused to return to work or accept an offer of work at a worksite that, in either instance, is not in compliance with local, state, or national health and safety standards directly related to COVID-19. This includes but is not limited to, those related to facial mask wearing, physical distancing measures, or the provision of personal protective equipment consistent with public health guidelines.

No additional documentation needed.

I provide services to an educational institution or educational service agency and am unemployed or partially unemployed because of volatility in the work schedule that is directly caused by the COVID-19 public health emergency. This includes, but is not limited to, changes in schedules and partial closures.

Pay stubs or earnings and leave statements showing the employer’s name and address, W-2 forms, some kind of documentation of work being done which is provided by these organizations, or signed affidavits from persons verifying the individual’s attachment to such organizations.

I am an employee and my hours have been reduced or I was laid off as a direct result of the COVID-19 public health emergency.

Pay stubs or earnings and leave statements showing the employer’s name and address, W-2 forms, some kind of documentation of work being done which is provided by these organizations, or signed affidavits from persons verifying the individual’s attachment to such organizations.

Final thoughts

Keep in mind that the PUA benefits you are claiming in 2021 may be based on multiple reasons. For instance, your PUA claim could be based on your employer closing because of the pandemic, but you also may have been quarantined because of Covid-19 for two weeks in February 2021. So, if your PUA claim for weeks in 2021 is based on any of the reasons identified above for which additional documentation is needed, including a job loss dating back to 2020, then you need to provide the indicated documentation.

The penalty for failing to submit this additional documentation is repayment of all PUA benefits for weeks in 2021:

[For] the individual [who] fails to provide documentation or [who] fails to show good cause to have the deadline extended, an overpayment must be established for all of the weeks paid beginning with the week ending January 2, 2021. 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.

UIPL No. 16-20 Change 4 (8 Jan. 2021) at I-12.

Over-payments and waivers

For the week ending 8 May 2021, the Department has added a new over-payment waivers FAQ.

For this new over-payment waiver option, the Department will apply the equity and good conscience standard for the federally funded programs: PUC, LWA, MEUC, PEUC, and PUA. From the FAQ (as of 8 May 2021):

Claimants who are eligible to apply for an overpayment waiver will receive a message in their Claimant Portal Message Center beginning April 28, 2021, with a link to apply for the waiver. Claimants who have previously informed UI that they are unable to access the internet will be mailed the Overpayment Waiver Request form. Claimants must complete the waiver request form within 14 days of the date they are notified of their eligibility to apply.

The computer programming needed to process overpayment waiver requests will be completed by late May 2021, and DWD will begin reviewing waiver requests at that time. A determination can be expected in June 2021 at the soonest.

Upon completed review, claimants will receive an eligibility determination by mail notifying them that their Overpayment Waiver Request was either approved or denied. Waiver request decisions can also be viewed on the Determinations Page in the Claimant Portal. Overpayment waiver request decisions are appealable.

If you believe you should have been eligible for an overpayment waiver but did not receive a message in your Claimant Portal Message Center nor by mail, you may request a review of your claim by calling the UI Claimant Assistance Line at (414) 435-7069 or (844) 910-3661. Before calling, please refer to your overpayment determination notice. If the determination states that the overpayment is, in whole or in part, due to you providing inaccurate or incomplete information, you will not be eligible for a waiver because you have been determined to be in fault, at least in part, for the overpayment. Please note: If you disagree with the decision that you were at fault for the overpayment, you should file an appeal of the overpayment decision to resolve that issue first, rather than requesting an overpayment waiver. If your appeal of the fault determination is in your favor, you may become eligible for a waiver.

Understand from this announcement that this over-payment waiver option went out in late April 2021, and claimants only have 14 days to take advantage of that option. But, the Department will not act on those requests until another month has passed.

And, what of claimants who miss seeing their waiver announcement on their portal? It appears that this waiver announcement is a one-time event/option for those claimants facing an over-payment and who have exhausted their appeal options in their case.

So, even though the Department should be commended for making this waiver available — something that was set forth in UIPL No. 16-20 Change 4 (8 Jan. 2021) at I-26 — this narrow and limited “implementation” is minimizing the scope and impact of this waiver option. It is extremely likely that most claimants will miss this waiver option completely, even though the Department has no ability to act on any waiver requests until the end of May at the earliest.

In other words, the Department has mandated an artificial filing deadline that does not actually matter except as a way to limit eligibility for this over-payment waiver.

And, those that do file their waiver requests are not going to find a Department agreeing with the request. This waiver option only applies if the claimant is not “at fault” for the over-payment, and the Department takes the view that even typographical mistakes by a claimant — even mistakes that have no bearing on eligibility — constitute claimant fault. So, this waiver option will be applied sparingly by the Department.

What that means is the claimants will need to persist through multiple appeals if they hope to eventually get an over-payment waiver because of equity and good conscience. The Department will resist. So, claimant’s need to be steadfast in opposition.

Update (11 May 2021): Hearing notices for PUA cases now include the over-payment waiver language. So, claimants with pending hearings should have the opportunity to argue for an an over-payment waiver if the hearing notice includes the correct language.

Unemployment and job searches

Wisconsin news is in a tizzy about pandemic unemployment benefits leading to shortages of job applicants. News reports in Wisconsin feature retail establishments, and the outcry about worker shortages from the restaurant lobby has been non-stop. Sen. Nass even wants to start requiring unemployed workers to do four job searches a week and end all pandemic-related eligibility for regular unemployment benefits.

Hogwash.

In other states, unemployment benefits may be an issue. But, in Wisconsin unemployment eligibility and benefits are NOT the issue.

That is because Wisconsin uses a partial wage formula of

WBR minus 2/3(Wages earned in a week minus $30) = UI received that week

for computing eligibility for unemployment benefits. This formula rewards workers for partial work, because they still remain eligible for unemployment benefits.

Depending on the claimant’s weekly benefit rate, a claimant can return to work and still be eligible for unemployment benefits. So, a working claimant can receive both wages from work and unemployment benefits, including the federally-funded $300 PUC currently being offered until 6 Sept. 2021.

Here is the eligibility chart for a claimant with a weekly benefit rate of $300 (the x-axis is the amount of wages earned in a week).

And, here is the eligibility chart for a claimant with a weekly benefit rate of $250 (the x-axis is the amount of wages earned in a week).

Retail and restaurant work is notoriously part-time work, in large part because full-time work is reserved to the employees for whom job benefits like health insurance are offered. Furthermore, these employers generally avoid any chance of having to pay overtime wages.

Worker shortages in northern and rural Wisconsin or in specific sectors of the economy are either because there are fewer available workers (rural and Northern Wisconsin have experienced a declining population during the last decade) or businesses are still thinking a $9 or $11 per hour starting wage is attractive, despite workers easily seeing numerous other businesses offering $15 or more per hour.

And, workers in highly paid jobs can see better wages, improved social services, and a better standard of living in cities like Minneapolis or Madison. Hence, it is in those cities where the population is growing.

Hint: Living in rural and Northern Wisconsin would be imminently more possible and attractive to folks if broadband Internet was widely available in those areas.

Yes, there may be a few Wisconsin workers who mistakenly think they cannot collect unemployment benefits while working part-time.

Note: A reporter keeps asking for examples of actual workers who are turning down work in order to keep receiving unemployment benefits. So far, no examples are forthcoming.

But, just because a few workers do not understand how unemployment works simply means that Wisconsin and its employers have not done a good enough job explaining how unemployment actually works.

Saying people in Wisconsin are not working because of unemployment benefits is like saying 2 + 2 = 5. The numbers just do not add up.

Update (13 May 2021): A few days ago, the Biden Administration released the following information.

May 10, 2021

FACT SHEET: President Biden Announces Additional Steps to Help Americans Return to Work

Over the first three full months of the Biden-Harris Administration, the economy added more than 1.5 million jobs, or more than 500,000 jobs per month on average. That compares to an average of 60,000 jobs per month in the three previous months. These three months have seen the strongest first three months of job growth of any administration.

Despite this progress, there’s more work to do to climb out of the economic crisis brought on by the pandemic. The Biden-Harris Administration is acting aggressively to ensure that the millions of Americans who remain unemployed, through no fault of their own, can find safe, good-paying work as quickly as possible. That’s why the President is announcing today that the Administration will take steps to remove barriers that are preventing Americans from returning safely to good-paying work and take steps to make it easier for employers to hire new workers.

And, the President and the Administration will reaffirm the basic rules of the unemployment insurance (UI) program. Anyone receiving UI who is offered a suitable job must take it or lose their UI benefits. A core purpose of the UI program is helping workers get back to work, and UI provides laid-off workers with temporary assistance to help pay bills and relieve hardship. By reaffirming these rules and purposes, the Administration will ensure that the UI program continues to support workers and facilitate hiring.

Specifically, today the President is:

REMOVING BARRIERS THAT ARE KEEPING AMERICANS FROM RETURNING SAFELY TO GOOD-PAYING WORK

Accelerating the Provision of Assistance to Hard-Hit Child Care Providers to Get More Parents Back to Work

Between February 2020 and March 2021, 520,000 mothers and 170,000 fathers between ages 20 and 54 left the labor force and have not returned. Many need or want to work but cannot because of child care disruptions. At the same time, early childhood and child care providers – nearly all small businesses, overwhelmingly owned by women and disproportionately owned by people of color – have been hit hard by the pandemic. According to one survey, as of December, about one in four child care providers open at the start of the pandemic were closed, hindering access to care, especially for families of color. Child care providers that have stayed open have gone to enormous lengths to do so and are struggling to stay open: two in five providers report taking on debt for their programs using personal credit cards to pay for increased costs and three in five work in programs that have reduced expenses through layoffs, furloughs, or pay cuts. And, there are 150,000 fewer child care jobs today than there were at the beginning of the pandemic.

The American Rescue Plan provides funding to address the child care crisis caused by COVID-19 to help parents who need or want to work to return to their jobs. This includes funding to stabilize the child care industry so that parents can send their children to safe, healthy, stable child care environments and additional funding to help families access affordable, high-quality care, including by providing subsidized care to more than 800,000 families with the greatest need and by providing resources for hard-hit child care providers.

Today, the Department of Health and Human Services is releasing guidance to states, tribes, and territories so that states can start getting the child care stabilization funding to providers immediately. The guidance will encourage states to get funding out quickly and to make it as easy as possible for hundreds of thousands of child care providers, including centers and family-based providers, to receive the funding. It will also encourage states to allow the funds to be used broadly to meet the unique needs of providers so they can reopen or maintain essential services. It will explain, for example, how they can use the funds to bolster their workforce, cover expenses like rent and utilities, and pay for goods and services needed to stay open or reopen. And, it will provide guidance on ways providers can use funds to help them operate according to CDC guidelines, so that as parents return to work, they can have peace of mind their children are in a safe and healthy learning environment. In all, these funds will support child care providers in keeping their doors open, benefiting the parents of more than 5 million children who rely on them to stay in or return to the labor force.

And, thanks to the historic expansion of the Child and Dependent Care Tax Credit (CDCTC) in the American Rescue Plan, families can rest assured that they can receive up to half of their child care expenses this year when they file taxes for 2021. A median income family with two kids under age 13 will receive a tax credit of up to $8,000 towards this year’s expenses, compared with a maximum of $1,200 previously.

Directing the Secretary of Labor to Safely Expand States’ Reemployment Services and Workforce Development Boards’ Jobs Counseling for Unemployment Beneficiaries.

States receive federal funding for Reemployment Services and Eligibility Assessments (RESEA) of UI beneficiaries to help them find employment while ensuring they remain eligible for benefits. These services shorten workers’ time on unemployment benefits by helping them match with good jobs and confirm their eligibility for benefits. States significantly and appropriately slowed in-person RESEA meetings in the midst of historic unemployment and the COVID-19 pandemic. With the economy and jobs growing again, the President will direct the Secretary of Labor to issue guidance to states to quickly and safely – consistent with CDC and OSHA guidance – expand their RESEA programs so that more UI beneficiaries can return to work.

Similarly, the public workforce system’s Workforce Development Boards (WDB) collectively receive hundreds of millions of dollars they can use to provide individualized career counseling, called “individual career services,” to job seekers. However, because of the pandemic’s risks, many WDBs stopped providing in-person services and had to quickly transition to remote services. Now that tens of millions of Americans have been vaccinated, and we know how to operate physical locations safely, the President will direct the Secretary of Labor to work with the public workforce system to provide the maximum level possible of individual career services to UI beneficiaries and other unemployed workers using existing resources, and in a manner consistent with CDC and OSHA guidance.

MAKING IT EASIER FOR EMPLOYERS TO HIRE NEW WORKERS

Supporting Hard-Hit Restaurants and Bars

Restaurants, bars, and other small businesses offering on-site food and beverages are vital to our communities and economy. From big cities to small towns, these restaurants and bars offer communities a place to gather, celebrate, and share ideas. They also employed nearly 12 percent of all workers prior to the pandemic. Despite their importance, restaurants and bars have suffered severely during the pandemic. The leisure and hospitality sector, which includes restaurants and bars, had 17 percent fewer jobs this April than in February 2020.

Though we have seen significant progress under the Biden-Harris Administration – leisure and hospitality added 331,000 jobs in April, by far the most of any industry and more than it added in March – there is still more work to do to help this critical sector recover. Established through the American Rescue Plan, the Biden-Harris Administration recently launched the Restaurant Revitalization Fund (RRF) – a program to aid restaurants, bars, food trucks, and other food and drink establishments. These grants will give restaurants and bars the flexibility to hire back workers at good wages. In the first two days of the program, 186,200 restaurants, bars, and other eligible businesses in all 50 states, Washington, D.C., and five U.S. Territories applied for relief.

Today, the Administration is sending the first grants under the program to 16,000 hard-hit restaurants. These include restaurants in states and territories throughout the country, and restaurants owned and controlled by women, veterans, and socially and economically disadvantaged individuals.

Providing States and Localities with the Resources They Need to Help Return Americans to Work

The American Rescue Plan delivered flexible Coronavirus State and Local Fiscal Recovery Funds that will help state and local governments hire back public sector workers; ramp up the effectiveness of their COVID response and vaccination programs to make return to work, school, and care safer; and bolster efforts to help workers negatively affected by the pandemic to train for and secure good-paying jobs. With today’s announcement, the U.S. Department of Treasury is making the first segment of these funds available to states and localities and laying out how these funds can be used to address pandemic-response needs and support the communities and populations hardest-hit by the COVID-19 crisis.

State and local employment remains 1.3 million jobs down since before the pandemic. Learning from the mistakes of the Great Recession, when state and local government budget cuts were a drag on GDP growth for 23 of the 26 quarters following the crisis, the funds will provide these governments with the resources needed to help address challenges in returning Americans to work. This includes in the public sector, where state and local employment remains down over one million jobs since the start of the pandemic. Fiscal Recovery Funds will help bring firefighters, teachers, school staff, cops, and other public servants back to work.

Helping Employers – Especially Small Businesses – Rehire and Retain Workers Through the Extended and Expanded Employee Retention Credit

To help hard-hit employers rehire and retain workers, President Biden extended and expanded the Employee Retention Credit (ERC) in the American Rescue Plan. This year, the ERC offers eligible employers with 500 or fewer employees a tax credit of 70 percent of the first $10,000 in wages per employee per quarter. In other words, this refundable, advanceable credit will cover up to $7,000 in wages per quarter or $28,000 per year for each employee. For example:

• A small independent retailer in Milwaukee, Wisconsin with 25 employees has $130,000 in payroll expenses per quarter (all for employees earning less than $10,000 in the quarter), and experiences a 25 percent decline in gross receipts in the first quarter of 2021 compared to the first quarter of 2019. The retailer is eligible for the Employee Retention Credit in the first quarter since it experienced a greater than 20 percent decline in gross receipts. The retailer is also eligible for the ERC in the second quarter because of the decline as compared to 2019 in the immediately preceding first quarter. The retailer can claim a tax credit of $91,000 in both the first and second quarters (for a total of $182,000). The amount of the tax credit would be applied against the retailer’s quarterly federal payroll tax amount, and then, assuming that the $91,000 was in excess of the total liability for the quarter, the excess would be advanced (or paid by the government directly to the retailer). If the retailer experienced declines in gross receipts in the third quarter as compared to 2019, it could claim an additional tax credit (in a similar amount) for the third quarter and the fourth quarter. The small retail business could use this advance – which could amount to tens of thousands of dollars – to rehire workers, raise wages, improve facilities, and purchase new inventory.

While more than 30,000 small businesses have already claimed more than $1 billion in ERCs this year, the Biden-Harris Administration is working to increase awareness of and participation in this beneficial program. Specifically, this week, the Treasury Department will disseminate clear and concise steps on how businesses can determine their eligibility and claim the ERC. These and other efforts will help businesses bring employees back sooner and keep them on the job as the economy recovers.

Helping Employers Ramp Back Up

As businesses ramp back up without knowing how many workers they will need to operate as the economy recovers, some will look to bring workers on part-time. The UI system offers options for these employers and their returning workers. Workers shouldn’t have to choose between losing their full UI benefits to take part-time work that represents only a portion of their original salary. The Department of Labor will announce this week how unemployed workers who are rehired part-time don’t have to face that choice. They can work part-time while still receiving part of their UI benefits so they can work and still make ends meet.

There are two programs that can help and the Department of Labor this week will help highlight them:

• Short-Time Compensation: Short-time compensation was designed to help prevent layoffs by allowing workers to remain employed at reduced hours and still collect a portion of their UI benefits. But it can also be used to help employers rehire their already laid off workers. If an employer brings a laid-off employee back part-time and participates in the short-time compensation program, that worker will receive pro-rated UI benefits to help cover reduced compensation for not working full time, as well as the $300 weekly supplement until that supplement expires September 6th.
  
  The Biden-Harris Administration will highlight this program to help employers rehire their laid-off employees in the coming weeks and work to make it as easy as possible for employers and workers to participate. Short-time compensation programs are currently available in . These benefits are fully federally funded through September 6 for those states.
  
• Partial UI: Another overlooked option for helping employers ramp up is the partial UI program, which allows workers to return to work at a new employer at reduced hours while still receiving some unemployment benefits. This is a good option for workers who may not qualify for short-time compensation because they are not returning to their previous employer. States can enhance the capacity of partial UI by raising the income threshold where workers can both work and receive some UI benefits, and the Department of Labor will be encouraging states to do so.

CLARIFYING RULES OF THE UI PROGRAM

This week, the Department of Labor will reaffirm longstanding UI requirements to make sure everyone, including states, employers, and workers, understands the rules of the road for UI benefits. These clarifications will also help ease a return to work. Specifically, the Secretary of Labor will issue a letter to states to reaffirm that individuals receiving UI may not continue to receive benefits if they turn down a suitable job due to a general, non-specific concern about COVID-19. In addition, the President is directing the Secretary of Labor to work with states to reinstate work search requirements for UI recipients, if health and safety conditions allow.

• Clarifying Rules of UI Programs: The Department of Labor will clarify that, under all UI programs including the Pandemic Unemployment Assistance (PUA) program put in place last year, workers may not turn down a job due to a general, non-specific concern about COVID-19 and continue to receive benefits. Under the PUA program, a worker may receive benefits if the worker certifies weekly that one of the few specific COVID-related reasons specified by Congress is the cause of their unemployment. These reasons include, for example, that the worker has a child at home who cannot go to school because of the pandemic or that the worker is offered a job at a worksite that is out of compliance with federal or state health requirements. Moreover, workers may not misreport a COVID-related reason for unemployment. The President is directing the Department of Labor to take concrete steps to raise awareness about these and other requirements.
  
• Directing the Secretary of Labor to Work with States on Work Search Requirements: The President is directing the Secretary of Labor to work with states to reinstate work search requirements for UI recipients, if health and safety conditions allow. As part of the Families First Coronavirus Response Act signed into law last year by the previous Administration, states receiving certain federal relief funds were required to waive their requirements that workers search for work in order to continue receiving unemployment benefits. While 29 states have already reinstated their work search requirements, the President is directing the Department of Labor to work with the remaining states, as health and safety conditions allow, to put in place appropriate work search requirements as the economy continues to rebound, vaccinations increase, and the pandemic is brought under control.

A core purpose of the UI program is helping workers get back to work. UI keeps workers connected to the labor market during spells of unemployment by providing workers with income that allows them to look for a job match commensurate with their skills or prior wages. UI recipients also gain access to crucial reemployment services to help with job search or retraining where necessary. Ensuring a good job match is good for workers, as well as employers who want the best candidates for their jobs.

Returning to work during a pandemic is more complicated than searching for work in ordinary times. The COVID-19 pandemic remains a genuine challenge for our country, with infections, hospitalizations, and deaths down substantially when compared with last year, but still at unacceptably high levels. While vaccinations are on the rise with over half of American adults having received at least one shot, around a quarter of those aged 18 to 29 and around a third of those aged 30 to 39 are fully vaccinated. There is a great deal more to do.

At the same time, our economy is growing again at an annual rate of more than 6% and more than 1.5 million jobs have been created over the last three months. Many more workers would like to return to work if they can overcome the barriers that stand in the way. We can and will continue to ensure workers and their families are protected from COVID-19, while also helping those who are able and available to search for good jobs in safe and healthy workplaces.

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Broadband access assistance is available

My Madison alder rep, Regina Vidaver, passed on the following information about an Emergency Broadband Benefit that will provide a discount of up to $50 per month towards broadband service for eligible households and up to $75 per month for households on qualifying Tribal lands.

Eligible households can also receive a one-time discount of up to $100 to purchase a laptop, desktop computer, or tablet from participating providers if they contribute more than $10 and less than $50 toward the purchase price.

The Emergency Broadband Benefit is limited to one monthly service discount and one device discount per household.

A household is eligible if a member of the household meets one of the following criteria:

• Has an income that is at or below 135% of the Federal Poverty Guidelines or participates in certain assistance programs, such as SNAP, Medicaid, or Lifeline;
• Approved to receive benefits under the free and reduced-price school lunch program or the school breakfast program, including through the USDA Community Eligibility Provision in the 2019-2020 or 2020-2021 school year;
• Received a Federal Pell Grant during the current award year;
• Experienced a substantial loss of income due to job loss or furlough since February 29, 2020 and the household had a total income in 2020 at or below $99,000 for single filers and $198,000 for joint filers; or
• Meets the eligibility criteria for a participating provider’s existing low-income or COVID-19 program.

As of 12 May 2021, eligible households can enroll in the program to receive a monthly discount off the cost of broadband service from an approved provider. Eligible households can enroll through the approved provider or by filing an application at this link.

Anyone in Wisconsin who might be eligible for this assistance should apply.

Given that unemployment claims-filing is on-line only unless you indicate in a phone call to the unemployment support center that “I have disabilities that make on-line filing difficult and am requesting assistance” (an option not available to those who converse on the phone), the broadband assistance offered here is essential.