Unemployment benefits for federal workers during the shutdown

The Department of Workforce Development released the following notice yesterday:

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

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

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

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

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

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

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

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

Several issues need pointing out, however.

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

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

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

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

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

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

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

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

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

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

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

Neal Calls on Secretary Acosta to Help Furloughed Workers Access Unemployment Insurance
 WASHINGTON, DC – Today, Ways & Means Committee Chairman Richard Neal (D-MA) sent a letter to Department of Labor (DOL) Secretary Alexander Acosta calling for guidance to be issued that would ensure that states can provide federal workers not being paid during the government shutdown with Unemployment Insurance (UI) benefits. Roughly 800,000 federal workers are furloughed without pay due to the shutdown, and President Trump has stated that this impasse could persist for many more months. Unemployment Insurance would  help furloughed workers make ends meet and pay for necessities as the shutdown continues.

“During the shutdown in 2013, the Department of Labor moved quickly to make sure this lifeline was available to workers, issuing guidance to state workforce agencies about helping workers access UI benefits, 10 days after the shutdown cut off their pay,” wrote Chairman Neal. “Twenty-four days after the shutdown began, your department has not issued similar guidance to help federal workers navigate this crisis. Indeed, many states are working hard to help these workers, but the lack of guidance and leadership from DOL has impeded their progress.”

Certain UI eligibility requirements – for example, that recipients be actively searching for new jobs, and that they obtain proof of eligibility directly from agencies – can be waived when workers are furloughed or are expected to return to their jobs without pay. However, Chairman Neal pointed out that without guidance on this matter from DOL, “we are hearing reports that some workers have been unable to access benefits, and without guidance, states may not be able to use the flexibility in federal law.” Mr. Neal also raised his concern that as the shutdown drags on, DOL does not act, and more furloughed workers are called back to the office, “this Administration is simply forcing more and more federal workers to return to their work stations without pay or UI benefits.”

Lastly, Chairman Neal pointed out that “the need for unemployment benefits caused by the shutdown will, in the short run, have a negative impact on unemployment trust fund balances, which are already dangerously low in a number of states.” He asked that Secretary Acosta respond and explain “what harm the shutdown is doing to state unemployment insurance trust funds in the short run, whether that impact is triggering tax increases for employers to fund the shortfall, and how you plan to work with states to remedy that harm in the longer term.”

Full text of the letter is available HERE.

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

 

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DWD and LIRC continue to ignore court precedent on substantial fault

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

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

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

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

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

* * *

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

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

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

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

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

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

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

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

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

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

Skills gap for the unemployed more wishful thinking than reality

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

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

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

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

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

Darth Maul wants all your UI claims

Lame duck session includes changes to LIRC Redux

As a followup to my previous post about the lame duck changes to the Labor and Industry Review Commission, I have some more information.

First, here is what we know about Commission appointments during the lame duck:

  • Laurie McCallum put in her retirement papers BEFORE the election.
  • In those papers, Jan. 6th was her designated last day.
  • Evers won the election.
  • Walker appointed Georgia Maxwell to McCallum’s seat on Nov. 30th (but formally indicated the appointment is for Jan. 6th).

Yes, you are reading this info correctly. It says on p.1 that the nomination is dated on Jan. 6th but the actual nomination letter is dated Nov. 30th. “Let’s do the time warp, yeaaahhh.”

  • The Senate approved her appointment and 80 others in its lame duck session.
  • The Maxwell for McCallum appointment is allegedly legal because: (1) the Senate can determine for itself what appointments are proper, and (2) an Atty Gen. opinion indicates that appointments in a current term are legit.
  • The Atty General opinion — 76 Op. Att’y Gen. 272 — is rather ambiguous on this appointment. The opinion is essentially saying that a governor and the senate cannot fill future positions. Here, the position does NOT become vacant until 1/6/2019, the last day of the current legislative session. The problem is that Maxwell’s “appointment” is occurring now, before the position is actually vacant. So, the appointment is for a future vacancy in the current (by one day) legislative session — a situation not quite covered by the AG opinion.

Second, the Commission is “securing” a job for its current general counsel.

Recall that the general counsel was previously a person hired by the Commission. When the Commission starting ruling against DWD over unemployment concealment, a provision in the budget was suddenly added to strip some funding from the Commission and make the general counsel an appointee of the governor (and, Senate confirmation for this appointment is not required).

Maria Gonzales Knavel served admirably as the first governor appointee, but she left the job when Gov. Walker proposed eliminating the Commission. When the Commission survived that attack, Gov. Walker appointed Georgia Maxwell as a Commissioner and Karl Dahlen as the new general counsel.

Apparently with the rush of new appointments during the lame duck session, Dahlen’s position was missed.

So, now the Commission has posted for one week, closing on Dec. 21st, a position for a new staff attorney that is apparently a way for Dahlen to remain at the Commission.

And, who thought Gov. Walker was not serious about creating jobs? Here, not even holiday breaks stop his administration from creating jobs for those who might be out of work soon. The big question remains, however: will Dahlen get to keep his six-figure salary of around $120,000 in his new job?

What is happening with FoxConn?

With the end of 2018 approaching, the first measures for the FoxConn deal are coming into play.

Note: A tip of the hat to PixelEnvy for a post about the effect of FoxConn on Mount Pleasant and links to some of the examination discussed below.

Recall that, for $3 billion in direct transfers and around another $1.5 billion in infrastructure and other improvements, FoxConn promised to build a cutting edge LCD display manufacturing facility that could someday employ up to 13,000 people at an average (not a median wage) of $53,875.

Note: Here is the first flyer about FoxConn. The number and size of all the incentives makes it impossible to find a single document that describes them all. For starters, here is a rundown of the direct financing contained in the FoxConn legislation, and here is a description of the transportation funding for FoxConn. My thanks to the Wheeler Report for first posting these documents and others.

Note: The distinction between average and median is important. Of the following numbers — 10, 10, 100, 100, 100,000, 100,000, 100,000 — there is a median of 100 and an average of 42,888. That is quite the difference.

There is an amazing podcast from the folks at Reply All about Mount Pleasant and FoxConn. And, there is an article in the Verge with reporters from Reply All and others about how FoxConn came to be in Mount Pleasant.

What comes across over and over again in these reports is how negotiations behind closed-doors and astro-turfing served to push an agenda that very few seem to want. With all the lame duck shenanigans of late in Wisconsin and other states, it seems that this FoxConn deal was just more of the same: a lot of promise, few to no details, and the great likelihood that reality will not match up at all with what was promised.

As these reports indicate, much of what was going on with the FoxConn was hidden from the public. Eventually, the contract with FoxConn and WEDC (the state agency responsible for the FoxConn subsidies) was made public. Here are the job numbers that FoxConn actually has to meet:

FoxConn job creation numbers

Ex.A of FoxConn-WEDC contract. Notice that FoxConn qualifies for these credits if it has just 260 employees on payroll by the end of 2018. At the end of 2019, the minimum threshold doubles to 520 employees.

Note: these low numbers make sense in light of reports that the factory will not be operational until 2020 at the earliest.

Each December, the employees at FoxConn are counted for the purpose of determining how many “credits” will be returned to FoxConn for those employees. Here is how those credits are calculated:

As under the enterprise zone program, “full-time employee” would mean an individual who is employed in a regular, nonseasonal job and who, as a condition of employment, is required to work at least 2,080 hours per year, including paid leave and holidays. However, WEDC could grant exceptions to the requirement that a full-time employee means an individual who, as a condition of employment, is required to work at least 2,080 hours per year if: (a) the individual is employed in a job for which the annual pay is more than the amount determined by multiplying 2,080 by 150% of the federal minimum wage ($22,620); and (b) the individual is offered retirement, health, and other benefits that are equivalent to the retirement, health, and other benefits offered to an individual who is required to work at least 2,080 hours per year.

A claimant [i.e.. FoxConn] could claim as a refundable income or franchise tax credit an amount calculated as follows:

a. Determine the zone payroll for the taxable year for full-time employees whose annual wages are greater than the amount determined by multiplying 2,080 by 150% of the federal minimum wage ($22,620) in a tier I county or municipality or greater than $30,000 in a tier II county or municipality.
b. Multiply the amount determined under “a” by 17%.

WEDC could not issue certifications to claim payroll tax credits under these provisions that total more than $1.50 billion.

Bob Lang, “August 2017 Special Session Assembly Bill 1: Foxconn/Fiserv Legislation,” (8 August 2017) at 3.

Notice that these “credits” are NOT based on actual work and pay for the previous year. Rather, they are based on who is on payroll in December for those employees who have been hired on a full-time basis (i.e., they will work 2080 hours), have benefits, and earn at least $22,620 for those 2080 hours they will possibly work. The state then returns to FoxConn in April of the next year 17% of these wages as calculated (not as actually paid).

Note: So, there is NO accounting for employee turnover at FoxConn. Given the stories of worker suicides at FoxConn’s facilities in China, this loophole is staggering.

Some of you may be asking about where is that $53,875 figure that was and is touted so much. Here is what is going on with that number.

First, this number possibly includes the job benefits employees are receiving.

Second, this number is only an average. Another provision of this deal caps the wages at issue at $100,000. So, the execs like Chairman Gou (who is also an employee of FoxConn Wisconsin) only have the first $100,000 of their salaries counted for these job subsidies. But, as noted above, that $100,000 figure will go a long way to making the average salary seem much higher than what is actually being paid to the other 259 employees needed to qualify for the subsidies. If there are 50 employees at $100,000 each and another 50 at $1,000 each, the average is $50,500.

Moreover, understand that these job subsidies are only a small part of the package handed to FoxConn. For instance, Jake has some additional news about the land purchases and prep work going on right now on behalf of FoxConn ($60 million from FoxConn has been matched by $147 million from Wisconsin and Mount Pleasant).

Given this FoxConn “deal,” it is not surprising that other companies are pushing for similar handouts. Kimberly-Clark asked for comparable job subsidies to keep two factories open, and has settled for a pro-rated financial handout to keep one factory open.

And, that last part about “keeping” a factory open is the kicker. Wisconsin is essentially paying here to NOT lose jobs. As a result, manufacturing job growth in Wisconsin has been shoddy and continues to be so. DWD pushes gushing estimates about jobs in Wisconsin, but the actual numbers indicate Wisconsin is lagging behind all the mid-western states but Minnesota (a state with a growing economy, as Minnesota’s economy is not nearly as dependent on manufacturing as Wisconsin’s is).

So, Wisconsin is handing money out hand over fist to companies that don’t really need it and not seeing much of a result from all that effort. In the meantime:

Jud Lounsbury @JudLounsbury Dec 13

Instead of sabotaging the incoming gov, maybe @ScottWalker could finally address the dairy farm crises in Wisconsin. Nearly half of Wisconsin dairies have gone under during Walker’s two terms. #walkerlegacy

The problem now is that Wisconsin is committed to these corporate deals where the return is mostly to the benefit of the company. Profits may be soaring for these companies, but actual economic growth in the state and among the middle-class is flat-lining.

Lame duck session includes changes to LIRC

As there is now some time to review what has been happening with the lame duck session, there are more and more changes to figure out. Some of these changes are at the Labor and Industry Review Commission and involve the three Commissioners there.

Prior to the lame duck session, Georgia Maxwell’s appointment expired in March 2019, Dave Falstad’s appointment expired in 2021, and Laurie McCallum’s appointment expired in 2023.

NOTE: Falstad was appointed in 2015. McCallum was appointed in 2011 and then again in 2017. Bill Jordahl was appointed in 2013 for a term expiring in 2019. When he left LIRC in 2017 (when Gov. Walker proposed eliminating the Commission) for the Public Service Commission, Maxwell replaced him.

But, Laurie McCallum has indicated she is retiring from the Commission in very early January 2019. So, Gov. Walker apparently proposed and the Senate approved on Dec. 4th to appoint Maxwell to fill the remainder of McCallum’s term:

Executive Appointment: Maxwell, Georgia – Georgia E. Maxwell, of Madison, as Commissioner of the Labor and Industry Review Commission, to serve for the term effective January 6, 2019 and ending March 1, 2023.

How can Maxwell be re-appointed to a new term when her current term has not expired and McCallum’s term has not yet expired? And, how can all of this occur in a legislative session that ends this year for service in 2019? Good questions. I do not know the answers.

For comparison to these shenanigans, here is Governor-elect Walker’s letter to then Gov. Doyle. In this letter, Walker asks that political appointees be prevented from returning to their civil service positions. That is, Walker was asking Doyle to stop state employees from exercising their civil service rights under state law to serve in their civil service jobs outside of political influence. Wow.

Note: there was no request from Walker to NOT make any political appointments, because there were none at issue back then. How times have changed. As Bruce Murphy indicates, Doyle essentially did what Walker wanted other than try to get year-late 2009-2011 collective bargaining agreements enacted.

So, Governor-elect Evers will get one appointment to the Commission in 2019. That appointment will require Senate approval, and that person will need to leave that position immediately should the Senate reject him or her under lame-duck SB884 (LRB 6071/1 and 6076/1), if that specific provision is not vetoed by Gov. Walker.

And so, the cautionary notes from Bruce Thompson deserve repeating:

For Vos and Fitzgerald [democracy] is not a consideration: their answer is to establish two sets of laws, one for Republican administrations, a different set for Democrats. They neither understand nor support the concept embodied in John Adams’ comment “For as in absolute governments the King is law, so in free countries the law ought to be king; and there ought to be no other.”

They also undermine democracy by assuring that the democratically elected government is a weak government, a government unable to fulfill its promises to the electorate. They are doing their utmost to turn the Evers administration into a Republican administration when it comes to policy, in effect trying to annul the election. They want to force Evers’ first term to duplicate Walker’s intended third term.

USA Today article about work search difficulties

Paul Davidson of USA Today has a feature story about how record low job numbers are due in part to the hurdles states have enacted to get unemployment benefits.

The article describes how only around 60% of those eligible for unemployment benefits are applying, down from the 75% portion “during the last two economic expansions in the late 1990s and mid-2000s.” Such obstacles are a main reason why low unemployment rates have not led to an increase in wages for working folk.

Besides folks not receiving the unemployment benefits due them, the article notes, the perception of the nation’s economic health is also being distorted.

The upshot: The economy is in good shape, but not that good. The low share of laid-off workers seeking jobless benefits also raises concerns about the social safety net in coming years as the economy shows early signs of wobbling. The stock market has retreated from its October peak, oil prices have tumbled and General Motors announced about 14,000 layoffs last week. Many economists predict a recession in 2020.

In other words, during this economic boon(?), there is actually more unemployment not showing up in the economic measurements. And so, this unmeasured unemployment is leading to less unemployment benefits being paid out to folks and to downward pressure on wages.