Beres/absenteeism at the Wisconsin Supreme Court, Part 1

I previously described an Appeals Court decision in DWD v. LIRC (Beres), 2017 WI App 29, 375 Wis.2d 183, 895 N.W.2d 77, where the Department argued that a new definition of absenteeism qua misconduct allowed an employer unilaterally to determine a claimant’s eligibility for unemployment benefits by setting an employer that disqualified an employee for a single absence. In a 2-1 decision, the Court of Appeals concluded that such an outcome contradicted the entire point of unemployment law and sided with the Commission that the employer cannot define for itself what absenteeism will constitute misconduct.

The Department subsequently asked the Wisconsin Supreme Court to get involved, and the state court accepted the invitation. Furthermore, the justices added this case to their push to re-examine the deference given administrative agencies.

In Operton v. LIRC, 2017 WI 46, 375 Wis.2d 1, 894 N.W.2d 426, three justices issued a concurrence calling into question whether judicial deference to administrative agencies violated the constitutionally-mandated separation of powers among the three branches of government.

In Beres and two other cases — TetraTech v. DOR, Appeal No. 2015AP2019, and Wisconsin Bell, Inc. v LIRC, Appeal No. 2016AP355 — the Wisconsin Supreme Court has decided to address the following question:

Does the practice of deferring to agency interpretations of statutes comport with Article VII, Section 2 of the Wisconsin Constitution, which vests the judicial power in the unified court system?

This question represents a RADICAL restructuring of jurisprudence that could essentially transform state court judges into super-legislators whose own preferences and desires supplant the reasoning and knowledge of state agencies and even their expert opinions and information-gathering. As such, this change is so fundamental that it requires its own separate, post to describe.

What first needs to be done, however, is to describe the statutory framework of the unemployment law at issue in Beres so that we at least have some idea of how we are getting to this fundamental re-thinking of administrative law in general.

Absenteeism as misconduct

At issue in Beres is the following absenteeism and tardiness provision in Wis. Stat. § 108.04(5)(e):

(e) Absenteeism by an employee on more than 2 occasions within the 120 day period before the date of the employee’s termination, unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature, or excessive tardiness by an employee in violation of a policy of the employer that has been communicated to the employee, if the employee does not provide to his or her employer both notice and one or more valid reasons for the absenteeism or tardiness.

This change in unemployment law began at the 29 November 2012 meeting of the Unemployment Insurance Advisory Council when the Department, on its own initiative, dropped more than a dozen substantive changes to unemployment law. See this post for the memo that originally describes all of these changes. Proposal D12-01 included numerous changes to disqualification standards, including the elimination of the absenteeism and tardy provisions in Wis. Stat. § 108.04(5g) by adding a new disqualification called “substantial fault” and the addition of a new, specific absenteeism provision that would qualify as misconduct. This proposed absenteeism and tardiness qua misconduct provision in Proposal D12-01 stated:

Excessive absenteeism or tardiness in violation of a known company policy and the individual does not provide to the employer both notice and a valid reason or reasons for the absence or tardiness.

See D12-01 at 3.

At the 1 April 2013 meeting of the Advisory Council, the Advisory Council rejected the proposed substantial fault provision and made some changes to the absenteeism and tardiness thresholds set forth in Wis. Stat. § 108.04(5g) for triggering a disqualification. The specific changes, however, were not announced to the public.

NOTE: The minutes of the 1 April 2013 meeting of the Advisory Council only state the following:

(A) Department Proposal D12-01 (Misconduct Standard) the Council supported this Department proposal with modifications. The Council agreement enumerated within the statute the standard taken from the Wisconsin Supreme Court decision of Boynton Cab and amended the proposal to solely provide four examples of conduct that would qualify as misconduct, but not limit misconduct to these four examples. The four examples relate to employee conduct concerning:

  1. Illegal Use of Drugs and Use of Alcohol While on the Job;
  2. Larceny;
  3. Crimes Related to the Job; and,
  4. Violations that would lead to Fines or License Suspension of the Employer.

The Council also agreed to amend the language of section 108.04(5g) of the Wisconsin Statutes with respect to absenteeism and tardiness to make it easier for either reason to disqualify a claimant from benefits.

After the meeting ended, I asked Robert Andersen if he could send me a copy of what the Advisory Council had specifically agreed on.

NOTE: Robert Andersen, worked with the members of the Advisory Council’s labor caucus during non-public discussion of proposed changes to unemployment law, and he helped facilitate agreement between the labor and management caucuses.

On 2 April 2013, I received an e-mail message from Mr. Andersen that contained the specific provisions agreed upon by the Advisory Council in an attachment. That attachment indicates that the Advisory Council agreed to to amend sub-section (5g) in the following manner:

(5g) DISCHARGE FOR FAILURE TO NOTIFY EMPLOYER OF ABSENTEEISM OR TARDINESS. (a) If an employee is discharged for failing to notify his or her employer of absenteeism or tardiness that becomes excessive, and the employer has complied with the requirements of par. (d) with respect to that employee, the employee is ineligible to receive benefits until 6 weeks have elapsed since the end of the week in which the discharge occurs and the employee earns wages after the week in which the discharge occurs equal to at least 6 times the employee’s weekly benefit rate under s. 108.05 (1) in employment or other work covered by the unemployment insurance law of any state or the federal government. For purposes of requalification, the employee’s weekly benefit rate shall be the rate that would have been paid had the discharge not occurred.

(b) For purposes of this subsection, tardiness becomes excessive if an employee is late for 6 4 or more scheduled workdays in the 12 month 120 day period preceding the date of the discharge without providing adequate notice to his or her employer.

(c) For purposes of this subsection, absenteeism becomes excessive if an employee is absent for 5 2 or more scheduled workdays in the 12 month 120 day period preceding the date of the discharge without providing adequate notice to his or her employer.

(d) 1. The requalifying requirements under par. (a) apply only if the employer has a written policy on notification of tardiness or absences that:

a. Defines what constitutes a single occurrence of tardiness or absenteeism;

b. Describes the process for providing adequate notice of tardiness or absence, and, regarding tardiness, which gives the employee a reasonable time for providing notice and which at least allows the employee the opportunity to provide notice as soon as practically possible; and

c. Notifies the employee that failure to provide adequate notice of an absence or tardiness may lead to discharge.

2. The employer shall provide a copy of the written policy under subd. 1. to each employee and shall have written evidence that the employee received a copy of that policy.

3. The employer must have given the employee at least one warning concerning the employee’s violation of the employer’s written policy under subd. 1. within the 12 month period preceding the date of the discharge.

4. The employer must apply the written policy under subd. 1. uniformly to all employees of the employer.

This memorandum does not appear in the Department’s supportive materials for Beres, however.

Janell Knutsen is the director of the Bureau of Legal Affairs for the Department’s Unemployment Division and serves as the non-voting chair of the Advisory Council. In her affidavit included in the record in this matter, Ms. Knutsen states:

12. The April 1, 2013 resolution recommending legislative change to the absence and tardiness statute was the only action by the UIAC on a proposal to change the disqualification for absence or tardiness during my tenure as UIAC Chair. I do not find in the Minutes of the April 1, 2013 UIAC meeting or in the Minutes of subsequent meetings in 2013 any other or additional recommendations or other action of the UIAC regarding disqualification for absence and tardiness. A copy of the five-page Minutes of the April 1, 2013 meeting of the UIAC is attached to this affidavit and identified as Exhibit 4. The attached minutes were formally approved by unanimous vote of the UIAC members at the April 18, 2013 UIAC meeting.

* * *

16. As the UIAC files show, there is no evidence in the UIAC files regarding the development of the language that became Wis. Stat. § 108.04(5)(e) and no evidence of involvement of the UIAC in the choice of words by the Legislature in its enactment of Wis. Stat. § 108.04(5)(e), except as generally reflected in the UIAC resolution of April 1, 2013, that stated “The Council also agreed to amend the language of section 108.04(5g) of the Wisconsin statutes with respect to absenteeism and tardiness to make it easier for either reason to disqualify a claimant for benefits.”

R.18-4 and 18-5. Ms. Knutsen also states in ¶15 of her affidavit (R.18-5) that she and Department staff searched Department records for “all written materials in those files relating to the action that the UIAC took to recommend changes to the unemployment law regarding disqualification for absenteeism and tardiness” and that she believes she has “identified in this Affidavit all such materials in the UIAC files.”

Michael Duchek is a legislative attorney at the Wisconsin Legislative Reference Bureau who was directly involved in drafting unemployment legislation in 2013. In his affidavit, part 1 included in the record in this matter, Mr. Duchek states:

10. I understand that the Unemployment Insurance Advisory Council considered the D12-01 proposal (Exhibit 7) and that on April 1,2013 the Advisory Council voted to recommend to the Legislature amendments to Wis. Stat. §§ 108.04(5) and (5g), although the Council’s recommendation departed from the statutory language that the Department had proposed in its D12-01 proposal.

11. The language that LRB incorporated in draft bills to amend Wis. Stat. §§ 108.04 (5) and (5g), although similar in general to D12-01 and the recommendation of the Council, was developed by LRB in consultation with the legislative requestor and did not match the amendments which were recommended to the Legislature by the Council.

12. It is evident from the proposals by the Department and the Council that each of them was drafted to strengthen the disqualification provisions related to misconduct, absenteeism and tardiness. The same is true of Wis. Stat. § 108.04(5)(e) and the other misconduct provisions as drafted by LRB and enacted in Act 20, although the enacted provisions went further to achieve this objective than did the Department and Council proposals.

R.19-3. Mr. Duchek indicates in ¶18 of his affidavit that his first draft of a new absenteeism and tardiness qua misconduct disqualification occurred on 13 May 2013. R.19-5. As indicated throughout the supporting materials attached to Mr. Duchek’s affidavit, this language was drafted at the request of Rep. Knodl and his legislative assistant, BJ Dernbach. See also the available drafting requests.

There is no indication in Mr. Duchek’s affidavit or in the 800+ pages of supporting materials that any action was undertaken to enact the changes to Wis. Stat. § 108.04(5g) approved by the Advisory Council (fyi, part 2 of Mr. Duchek’s affidavit is also available).

The Department bill that purportedly set forth what the Advisory Council had proposed was introduced as 2013 SB200. That bill did NOT include any of the recommended disqualification changes to the misconduct or quit provisions of unemployment law approved by the Advisory Council. When the first public hearing for 2013 SB200 was under way on 29 May 2013, the Joint Finance Committee also met that day in regards to the budget bill at issue then, 2013 AB40. At that meeting, the Joint Finance Committee introduced an amendment via Motion #506 to 2013 AB40. Motion #506 included the absenteeism language Mr. Duchek had drafted. See ¶¶23 and 24 of Mr. Duchek’s affidavit, R.19-7, and R.19-14 to 19-27 for a copy of Motion #506; see also Advisory Council — 2 May 2013 meeting — and legislative actions today (29 May 2013).

As evident in her affidavit, Ms. Knutson has studiously avoided any mention or description of the actual language the Advisory Council specifically had adopted in regards to new absenteeism and tardiness disqualification thresholds in Wis. Stat. §108.04(5g).

Neither affidavit by Mr. Duchek or Ms. Knutsen indicate how and why the clause “unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature” was added to the draft legislation, as this clause was NOT part of: (1) the original Department proposal, (2) what the Advisory Council adopted, or (3) the 1 April 2013 letter and proposals from legislators featured prominently in Ms. Knutsen’s affidavit at ¶¶10-11, R.18-3 to 18-4, and also noted in Mr. Duchek’s affidavit at ¶¶7, 8, and 10 (the legislator’s letter is available in the record at 18-23 to 18-36 and in partial form at 19-35 to 19-46).

In contrast to Ms. Knutson’s statements omitting the existence of any specific absenteeism proposals by the Advisory Council, Mr. Duchek’s affidavit provides evidence that the Advisory Council’s specific proposals existed, were circulated beyond the Advisory Council, and indeed were reviewed by Mr. Duchek himself. Mr. Duchek states that the “Council’s recommendation departed from the statutory language that the Department had proposed” and also that the Legislative Reference Bureau’s draft bill that would become Wis. Stat. § 108.04(5)(e) “did not match the amendments which were recommended to the Legislature by the Council.” Ducheck Aff. at ¶¶10-11.

Mr. Ducheck also states in his affidavit that it is “evident from the proposals by the Department and the Council that each of them was drafted to strengthen the disqualification provisions.” Ducheck Aff. at ¶12. While the Advisory Council’s April 1st proposal did make it easier to disqualify claimants, nowhere in the Advisory Council’s proposal were employers given the unilateral power to determine employees’ eligibility for benefits via employer policies.

Finally, neither Ms. Knutsen nor Mr. Duchek explain how the Advisory Council’s threshold for absenteeism of “2 or more scheduled workdays” became “more than 2” absences in the enacted legislation. In other words, the three absences in 120 days provision that was enacted is less strict than what the Advisory Council had adopted and includes a number that was completely absent from the original Department proposal.

What next?

Today, December 1st, is scheduled for oral arguments in Beres, TetraTech, and Wisconsin Bell.

This legislative history for the absenteeism changes in unemployment law will probably NOT come up, however. This legislative history has not been part of the Wisconsin Supreme Court briefing, and the acclaimed focus of judges on the statutory text does not seem to hold much water in comparison to the policy issues at stake in such legislation. Indeed, what has featured prominently in the briefing is the marker laid down in Operton about agency deference and the ability/responsibility of judges to determine on their own constitutional initiative the reasonableness of what administrative agencies decide.

So, in follow-up posts I will delve into this question of agency deference, and I will attempt to explain what happened in oral arguments today in these three cases.

But, the complete mess of the statutory text at issue in Beres should matter, especially when that statutory text will likely serve as a vehicle for probably proclaiming how administrative agencies cannot provide, according to newly empowered judges, rationale applications of that statutory text. For these judges (as the Department of Justice claimed in its briefing), the Commission is being accused of not transforming a nonsensical absenteeism disqualification into something rational, let alone provide an interpretation that is so reasonable that no judge could ever disagree with it. In short, a **ed-up statute is being used as the vehicle for requiring administrative agencies to provide explanations for their interpretations that survive heightened scrutiny.

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Winter work search concerns

As they say on a popular television show, “Winter is coming.” For Wisconsinites, winter means seasonal layoffs, as Wisconsin for the time being still has a winter.

Seasonal layoffs, however, no longer mean seasonal unemployment with work searches waived for the snowy months. Rather, DWD has instituted an 8 week + additional 4 week work search waivers that are complicated to follow and difficult to get. The Department’s work search FAQ has the needed information about the new work search requirements and the end of seasonal work search waivers.

Keep in mind that the end of seasonal work search waivers came when DWD adopted a proposal based in part on how Florida limited its work search waivers; see also this direct link to my comments on the proposed regs. Obviously, DWD did not consider that Florida has a much different winter than Wisconsin.

The limited work search waivers were enacted in 2013 but not put first into effect until the 2015-16 winter season.

So, the first time the public could respond to these new waivers was at the 17 November 2016 public hearing, and hundreds voiced their displeasure to this change in waiver practice.

As the minutes for the 19 January 2017 Advisory Council meeting explain (p.5 of the pdf):

A total of 295 people provided 307 comments by letter, e-mail or at the public hearing. The department received the majority of correspondence by letter (158 letters) or through e-mail (123 emails). A total of 51 people attended the public hearing in which 19 people testified, 6 people testified and provided written correspondence and 1 person registered an opinion, but did not speak. A majority of the correspondence was specific to an employer or industry and contained the same text. A tally of the comments showed 246 comments received related to work search waivers for recalled employees.

These minutes leave out, however, that almost all of the comments — similar or not — were from employers. The 43 pp. summation of those comments show that employers were deeply concerned over retaining skilled and dedicated seasonal employees who were now at risk of leaving due to the new work search requirements that force employees during winter layoff months to search for and accept work with other employers and thus disrupt the operations of the original employer. Letters from Sen. Erpenbach, Sen. Harsdorf, and Sen. Carpenter also raised these concerns about employers losing valuable employees.

NOTE: Sen. Harsdorf’s bill to restore seasonal work search waivers, SB83, has not gone anywhere.

Apparently, nothing was done for the upcoming winter season that is now approaching. The only official response to this uproar is set forth in the last Q&A in the work search FAQ (emphasis supplied):

What is the policy basis for the requirement change?

The requirements are a result of a change in DWD’s administrative rules. These rules not only bring Wisconsin in line with more than half of all U.S. states and reaffirm the purpose of UI as delivering short-term assistance, but they also respond to employer concerns regarding the solvency of the UI Trust Fund’s balancing account. The change assures that Wisconsin’s UI law conforms to the federal requirement that state UI programs provide for an experience-rated UI tax system. This ensures fair and equitable financing of the payment of benefits among employers. By encouraging employees to find employment during their industry’s off season, fewer benefits are paid. This assists employers who have negative account balances and are taxed at the maximum UI tax rate. DWD, with the support of three separate committees in the Wisconsin State Legislature, restored the waiver limits that were in place prior to their repeal in 2004.

The concerns of employers about keeping valuable employees through winter layoffs in a state that has a winter and staying competitive when work returns in the spring apparently mattered for naught.

But, employees are not simply thrown to the winter wolves or wampas. Here are three things claimants should keep in mind when performing their four jobs searches a week.

Canvassing periods In Wisconsin, claimants have during their first six weeks — their canvassing period — the right to refuse work outside of their typical job experience. For instance, if the claimant is a nurse, he or she can decline a McDonald’s job during the first six weeks of his or her job search. See, e.g., Einerson v. Milwaukee Institute of Art & Design, Inc., UI Hearing No. 09610221MW (29 April 2011) (employee properly declined to accept the newly created position during her canvassing period because the new position required non-professional responsibilities that encompassed significantly less skills than were required in her most recent employment).

Protection of labor standards After their six week canvassing period, employees must accept ANY job offer as long as it meets labor market criteria (not less than 25% of the average wage for that job during that shift in question in the local labor market — aka the relevant county). So, a person can decline a nursing job if the $8 an hour pay is less than 25% of the average, local labor market rate. See, e.g., Hemenway v. Life Style Staffing, UI Hearing No. 12002612MD (9 Jan. 2013) (employee entitled to refuse offers of new work from the employer if the conditions were substantially less favorable to him than those prevailing for similar work in the locality). These labor standards protections arise from long-standing federal requirements described in UIPL No. 41-98 (17 August 1998).

Unreasonable job offer conditions A claimant can turn down job offers if the commute or shift is not reasonable for the applicant. Commute is relative to the area (a twenty-file mile commute in Milwaukee could be too long but normal and expected in rural Wisconsin). And, a shift not previously worked by the claimant can also be grounds for declining the job. So, a nurse who typically worked first shift can decline a third shift job offer if she has little to no experience working third shifts. See DWD 128 for the details.

WinterWampa

Unemployment concealment in other states

The push to charge concealment/fraud for mistakes when filing for unemployment is not just happening in Wisconsin. It is a national phenomena.

Here are descriptions about what is happening in two other states.

Pennsylvania

In Fugh v. Unemployment Comp. Bd. of Review, 153 A.3d 1169 (Pa. Commw. Ct., 2017) — also available here, the state’s unemployment board argued for an expansion of the definition of fault in that state’s unemployment statutes to cover non-intentional mistakes.

In this case, the claimant had her hours reduced and most of her job duties re-assigned to others. She then quit and filed a claim for unemployment benefits, listing “lack of work” as the reason for her separation. Technically, a lack of work is a layoff, so she misunderstood how to properly classify her separation. The state unemployment program, however, charged with being at “fault” for that mistake, which meant she had to repay the unemployment benefits she had initially received with interest, and the state could file liens and intercept taxes in order to recoup those unemployment benefits.

A prior Pennsylvania court decision, Cruz v. Unemployment Compensation Board of Review, 110 Pa. Commw. 117, 531 A.2d 1178 (Pa. Cmwlth. 1987), had previously held that extremely similar circumstances did not provide evidence of an intentional mistake necessary for a finding of fault. The Pennsylvania board argued that Cruz and decisions based on it were wrongly decided and that any finding of fault does NOT require either knowledge or an intent to file a deceptive unemployment claim.

In Fugh, an en banc panel of the state’s appeals court rejected this argument and explained (Fugh, 153 A.2d at 1176-7, footnote omitted):

A statute should be construed, if possible, to give effect to all its provisions. 1 Pa. C.S. § 1921(a). “[S]tatutory language must be read in context, that is, in ascertaining legislative intent, every portion of statutory language is to be read ‘together and in conjunction’ with the remaining statutory language, ‘and construed with reference to the entire statute’ as a whole.” Pennsylvania Gaming Control Board v. Office of Open Records, 628 Pa. 163, 103 A.3d 1276, 1285 (2014) (citation omitted). “Fault” is a persistent theme throughout the Unemployment Compensation Law.

For example, the Law states that it protects workers who have suffered a loss of income due to separation from employment “through no fault of their own.” Section 3 of the Law, 43 P.S. § 752; Preservation Pennsylvania v. Unemployment Compensation Board of Review, 673 A.2d 1044, 1046 (Pa. Cmwlth. 1996). Where a claimant is “at fault” for his loss of employment by reason of his willful misconduct, he is ineligible for unemployment compensation. The term “willful misconduct” is not defined by the Law, but our appellate courts have defined the term as “(a) wanton or willful disregard for an employer’s interests; (b) deliberate violation of an employer’s rule; (c) disregard for standards of behavior which an employer can rightfully expect of an employee; or (d) negligence indicating an intentional disregard of the employer’s interest or an employee’s duties or obligations.” Reading Area Water Authority v. Unemployment Compensation Board of Review, 137 A.3d 658, 662 (Pa. Cmwlth. 2016). A “fault” separation requires conduct “of such a degree or recurrence as to manifest culpability, wrongful intent, or evil design, or show an intentional and substantial disregard of the employer’s interest or of the employee’s duties and obligations to the employer.” Id. (quotation marks omitted). A negligent act alone does not constitute willful misconduct; rather, the conduct must be of “an intentional and deliberate nature.” Grieb v. Unemployment Compensation Board of Review, 573 Pa. 594, 827 A.2d 422, 426 (2003) (citation omitted).

The Referee found that Claimant “made a mistake” when reporting “lack of work” as the reason for her separation from Employer. Referee Decision at 3. The Referee found no evidence that Claimant had wantonly disregarded the truth of the information she provided in her application. Nor was her conduct found grossly negligent. The commission of a mere voluntary act does not establish fault. Daniels, 309 A.2d at 741. The Board cannot hold a claimant liable for a fault overpayment for a mere mistake or confusion. Cruz, 531 A.2d at 1180. The Board erred in holding that Claimant’s mistake made her liable for a fault overpayment of benefits under Section 804(a) of the Law, 43 P.S. § 874(a).

The Board asks this Court to abandon the principle of stare decisis and “correct [our] prior statement of the standard required to establish a fault overpayment,” i.e ., the state of mind standard set forth in Daniels and its progeny. Board Brief at 19. Stare decisis is “the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827, 111 S.Ct. 2597, 115 L.Ed.2d 720 (1991). Indeed, our Supreme Court has explained that “stare decisis has ‘special force’ in matters of statutory, as opposed to constitutional, construction, because in the statutory arena the legislative body is free to correct any errant interpretation of its intentions.” Hunt v. Pennsylvania State Police, 603 Pa. 156, 983 A.2d 627, 637 (2009) (quoting Shambach v. Bickhart, 577 Pa. 384, 845 A.2d 793, 807 (2004 ).

We decline the Board’s invitation. Apart from the restraints of stare decisis, we conclude that our long held construction of “fault” is not in need of “correction.” It is as sound today as it was 40 years ago. The revision to the Section 804 paradigm proposed by the Board is one for the General Assembly to make. Accordingly, we reverse the Board’s adjudication, in part, and remand the matter for revision of Claimant’s restitution obligation to reflect her liability for a non-fault overpayment under Section 804(b) of the Law, 43 P.S. § 874(b).

Michigan

As previously noted here, Michigan created an algorithm for charging unemployment fraud that led many of its residents to be accused without any actual evidence from their unemployment claims. Thousands ended up being falsely accused, and, because of quirks in the on-line only notice, could no longer challenge the false accusations.

A 2016 Guardian article updates the problems these false accusations have had on thousands of people. As noted in the article, some solutions at the state level were being discussed and proposed.

Those options came to naught, however. And, a class-action law suit has run into trouble as well because it took too long for the unemployed and their representatives to figure out what was going on in order to file the class-action law suit in the first place (folks did not check their on-line UI accounts when no longer receiving unemployment benefits, and so most only found out about the fake fraud accusations when the state went to recoup the alleged fraud a year or so later). Michigan has basically adopted policies that target vulnerable residents, and then fought like hell to be considered responsible for that targeting and the resulting harm.

UPDATE (11 Oct. 2017): There is a must-read article about how administrative law judges who first noticed the fake fraud accusations and sought to call attention to the problem were attacked by state officials for such temerity. Some of the administrative law judges were even charged with being biased against the state agency for pointing out that accusations of fraud without any factual basis should not be made in the first place and then explaining to claimants their rights at their hearings when nothing was being done to stop the fake accusations.

 

On-line only claim filing

As of 1 September 2017, the Department mandated that all unemployment claims and all weekly claim certifications be filed on-line only.

As noted when the Department mandated in May 2017 that initial unemployment claims had to be filed on-line, federal guidelines indicate that on-line only requirements are problematic.

This new, more expansive mandate from the Department seems to ignore these cautions from federal authorities about maintaining effective options for those with limited on-line access or limited English proficiency. For instance, the Department seems only to be providing assistance for on-line filing, not any actual alternatives to on-line filing.

At the very bottom of this page, a person having trouble with on-line claims finds this advice:

For help using online services or if you are truly unable to go online call 414-438-7713 during business hours.

The general page about unemployment services also indicates that on-line filing is required. For those who want help with their clams, this advice is offered:

For help using online services call 414-438-7713 during business hours:

Monday — Friday 7:45 AM – 4:30 PM

Callers may be asked to call back on a specific day of the week.

Additionally, this same general page also explains just under the notice about reporting fraud that:

DWD is an equal opportunity employer and service provider. If you have a disability and need assistance with this information, please dial 7-1-1 for Wisconsin Relay Service. Please contact the Unemployment Insurance Division at 414-438-7713 to request information in an alternate format, including translated to another language.

In the claimants’ handbook, the advice for those who might have trouble with the on-line system is tucked away under the Filing a Weekly Claim Certification:

Important Points to Remember When Filing a Weekly Claim:

All questions apply to the specific calendar week for which you are claiming. For example, when asked if you quit a job, you are being asked if you quit during the week you are claiming. If you did not quit during that week, answer “NO.”

If you are truly unable to use online services to file your weekly claim, contact a Claims Specialist at 414-438-5395 during business hours. Claims Specialists are available to assist you.

In a FAQ about benefit filing, the Department explains:

The Unemployment Insurance Division is retiring the automated telephone filing system. Workers must now file online. Apply online at https://my.unemployment.wisconsin.gov. For help using online services call 414-438-7713 during business hours.

So, the Department is having claimants call for assistance to make their on-line claim work and not offering any alternatives to the on-line claim process. Moreover, these phone calls are NOT toll-free and can only occur during limited hours.

For those calling with limited English proficiency, my sources indicate that phone-service interpreters will be added to the call to help explain the on-line filing requirements to claimants. Those with limited access to the Internet — which is most of Wisconsin, as high-speed broadband is still not available to most homes in rural Wisconsin — are being told to file at their local libraries. Indeed, the Department has indicated on numerous occasions to ask librarians for assistance when filing their unemployment claims.

Finally, there are some doubts about the adequacy of the Spanish version of the on-line filing system for Spanish-speaking claimants.

NOTE: There is still no on-line option for Hmong-speaking claimants.

The terms of use for the on-line system declares:

DISCLAIMER FOR TRANSLATION

The Google™ translation feature is provided for informational purposes only. Please be advised that the Department of Workforce Development is unable to guarantee the accuracy of this translation service and is therefore not liable for any inaccurate information resulting from the translation application tool. Please consult with your own translator for accuracy if you are relying on the translation or are using this site for official business.

The US Dep’t of Labor has specifically held in UIPL 02-16 at 9 that machine translation — what google does when it translates — is NOT adequate and that these kinds of disclaimers are just silly. As explained on digitalgov.gov:

Some view disclaimers as the solution to justify an imperfect translation. Ask yourself and your managers: What are we trying to achieve? If an agency provides imperfect information but includes a disclaimer, the agency is essentially saying that it cannot guarantee the accuracy of the information they have provided. If so, how is this:

  • fulfilling a need?
  • fulfilling our mission?
  • serving the public?

Consider how you would react if you were reading information that had a disclaimer that said, very politely, that the agency can’t guarantee the integrity of the translation and, therefore, can’t guarantee the accuracy of the information it is giving you. A disclaimer on translated content works for the agency, but it does not work for the person trying to accomplish a task.

As already noted, this on-line mandate seems little more than an elaborate trap for charging claimants with fraud when they get confused and make a mistake on their claims. The initial screen claimants see with the on-line system — even before they create a user-id and password — makes this goal front and center:

Initial warning screen

Update on 2017 unemployment legislation

The first and probably only hearing on the Advisory Council agreed-on bill, SB399, is slated for 12:30 today, 4 October 2017, at the Committee on Labor and Regulatory Reform in 201 Southeast of the Capitol.

This bill contains the Department’s proposals that the Advisory Council has approved (previously described in this post). Prior drafts of the bill are available here and here.

NOTE: The Advisory Council rejected Department proposals D17-03 (assessing employers for failing to provide employee records) and D17-06 (changing the burden of proof in certain unemployment cases) at the 9 August 2017 council meeting.

During discussions, management members of the Advisory Council made the following proposals:

  • Repeal the quit exception in Wis. Stat. § 108.04(7)(e). Under this provision, a claimant who quits a job within 30 days of being hired may retain their eligibility for unemployment benefits if the job that the claimant quit was not “suitable work” to begin with under Wis. Stat. § 108.04(8) OR the claimant could have refused to accept the under the federally-required labor standards provisions of Wis. Stat. § 108.04(9).
  • Treat state and federal holidays as working days for partial benefits if the employer is closed on those holidays. This provision is similar to what the Governor previously vetoed when added to the 2013 budget bill and which the council declined. See this post and this post.
  • Reduce the maximum number of benefit weeks based on the unemployment rate to 22 weeks when the unemployment rate is below 7% and 18 weeks when the unemployment rate is below 5%. The Council previously rejected this proposal from legislators. See this post and this post.
  • Amend definitions of misconduct and substantial fault in some way.

Labor representatives on the council made the following proposals:

  • Increase maximum weekly benefit rate (WBR) by $10 in 2018 and by another $10 in 2019.
  • Amend the trigger for tax schedule D to $1.8 billion. The current threshold for schedule D (the schedule with the lowest unemployment taxes) is $1.2 billion in the trust fund as of June 30th of the proceeding tax year.
  • Increase the taxable wage base in 2019 to $16,500 and then index that wage base in subsequent years.

The only available information about these proposals is available from this Department memorandum and a limited fiscal analysis. The Management proposals are not detailed in either document, and the description of the labor proposals is very general.

NOTE: An explanation for why management wanted changes to substantial fault and misconduct is provided, however:

Due to recent decisions of the Wisconsin Supreme Court and Court of Appeals regarding discharge for misconduct and substantial fault, the Management members of the Council propose to amend the definitions of “misconduct” and “substantial fault” in order to clarify legislative intent.

At the 9 August 2017 council meeting, the Advisory Council decided that none of these proposals would be taken up.

Finally, the fiscal estimate from the Department for SB399 has this information:

Assumptions Used in Arriving at Fiscal Estimate The bill makes various changes in the unemployment insurance (Ul) law, which is administered by the Department of Workforce Development (DWD). Compliance to the bill’s components will require one time IT work of 3,930 hours and one time administration work of 1,180 hours costing a total of $444,500. The funding will come from the UI Federal Administration grant. It is expected that the proposed changes will increase collections and save the UI Trust Fund $1,250,000 annually.

Long-Range Fiscal Implications It is expected that the proposed changes will increase collections and save the UI Trust Fund $1,250,000 annually.

These savings are largely due to the changes set forth in proposal D17-07 regarding new mechanisms for intercepting tax refunds, lottery payments, state vendor payments, and unclaimed property of taxpayers. See D17-07 at 19 (but note that the original estimates in D17-07 called for much more debt collection from employers to the tune of ~$3 million in light of all the changes being enacted in that proposal).

Claim-filing in Wisconsin at record low but economy not booming

A June press release from the Department of Workforce Development declared Wisconsin’s record low unemployment rate:

BLS Data: Wisconsin’s 3.1% Unemployment Rate Tied for 7th Lowest in Nation

State’s Labor Force Participation Rate also tied for 5th highest in country

MADISON – Department of Workforce Development (DWD) Secretary Ray Allen released the following statement following today’s U.S Bureau of Labor Statistics (BLS) release showing Wisconsin tied for the 7th lowest unemployment rate in the nation, significantly lower than the national rate. The release also noted that Wisconsin’s addition of 40,400 total non-farm jobs from May 2016 to May 2017 was statistically significant and Wisconsin’s labor force participation rate was tied for 5th highest in the country:

“Not only is Wisconsin’s 3.1 percent unemployment rate a near record-low for our state, but our rate is lower than that of 42 other states, including the neighboring states of Illinois, Michigan and Minnesota, and tied with Iowa for 7th lowest in the country,” Secretary Allen said. “We also are tied for the 5th highest labor force participation rate in the country, ahead of the neighboring states of Illinois, Iowa and Michigan. Under Governor Walker’s leadership, Wisconsin’s employers and communities are reaping economic rewards from a winning combination of a best-in-class workforce and innovative. proven worker training programs.”

Highlights of Friday’s BLS release of state-by-state employment and unemployment data for May 2017 include:

  • Wisconsin’s 3.1 percent unemployment rate tied for the 7th lowest in the nation in May 2017 and was significantly lower than the national rate of 4.3 percent.
  • Wisconsin added a statistically significant 40,400 total non-farm jobs from May 2016 to May 2017.
  • Wisconsin’s unemployment rate decline of 1.0 percent from 4.1% in May 2016 to 3.1% in May 2017 was statistically significant.
  • Wisconsin’s labor force participation rate of 68.8% tied for 5th best in the nation in May 2017.

Other indicators of Wisconsin’s economy include:

  • Both total labor force and employment in Wisconsin remained at all-time high in May, while the number of unemployed individuals was its lowest point since February 2000.
  • The rate of 3.1 percent is the second-lowest rate on record for Wisconsin (the lowest rate was 3.0 percent in May-July 1999).
  • Wisconsin’s January (3.9 percent) to May (3.1 percent) unemployment rate decline of 0.8 percentage points in 2017 is the steepest January-May decline since 1983.
  • Wisconsin’s labor force participation rate increased by 0.2 percentage points to 68.8 percent, while the U.S. labor force participation rate decreased to 62.7 percent in May.
  • Initial UI claims ended 2016 at their lowest level in their last 30 years. Year 2017 initial UI claims are running at their lowest levels since 1989.
  • Continuing unemployment claims ended 2016 at their lowest level since 1973. Continuing unemployment claims in Wisconsin are running the lowest in at least the past 30 years.

Friday’s BLS ‘Regional and State Employment and Unemployment Summary’ report

The last two points deserve particular note:

  • Initial UI claims ended 2016 at their lowest level in their last 30 years. Year 2017 initial UI claims are running at their lowest levels since 1989.
  • Continuing unemployment claims ended 2016 at their lowest level since 1973. Continuing unemployment claims in Wisconsin are running the lowest in at least the past 30 years.

These indicate that people have stopped filing unemployment claims at levels when in 1990 the population in Wisconsin was around 4.9 million and per capita income was $18,072 or in 1975 when the state population was around 4.6 million and per capita income was $6,086. For comparison, in 2014 the state’s population was nearly 5.8 million and per capita income was $44,585. And, from 1990 to the start of 2015, the civilian labor force in Wisconsin increased from 2,567,200 to 3,120,800 persons.

Furthermore, when the unemployment rate was similarly low in the late 1990s, per capita income rose by over 5% most of those years. As recent economic reports from COWS establish, however, income in Wisconsin is currently stagnant for most Wisconsin residents except for the very few at the top of the income ladder.

So, there are big contradictions in the Wisconsin labor force. People in Wisconsin are working and not filing unemployment claims. But, they are not getting any wage increases from employers who should be having trouble finding job applicants and so trying to entice people to switch jobs with offers of higher wages and greater job benefits.

Perhaps the Department has created a system where unemployment is much higher than the data indicates because people are NOT filing unemployment claims but instead taking low-wage, part-time work as a substitute in large part because full-time, high wage work is not available from employers who are not expanding or growing their businesses. COWS 2017 report on working Wisconsin reveals that the wealth and economic gains at the very top obscures the economic stagnation for the rest of the state’s residents. The August jobs report reinforces this conclusion, as Wisconsin job growth this summer remained stagnant (private sector jobs in July were revised to a 600 decline, August preliminary numbers indicate a 5,200 loss in private sector employment, and only June shows an anemic increase of 1,300 jobs after a revision).

 

The status of Wisconsin workers in 2017

COWS has issued their 2017 report on Working Wisconsin, and the news is generally not so good.

Urban Milwaukee, as always, provides the takeaways.

  • Job growth in Wisconsin is falling behind the rest of the nation.
  • Wages in Wisconsin are stagnant.
  • Race is a major factor in determining a person’s job opportunities.
  • The income gap between rich and poor in Wisconsin is at record levels.
  • The middle class in Wisconsin is now shrinking.
  • The hit on unions seems to go hand-in-hand with that middle-class decline.

Check out both the report and the news article.