The Department is still fighting eligibility for the disabled

On June 9th, Sec. Frostman indicated a change of heart at the Department, as the Department now considered the denial of PUA benefits to SSDI recipients to be both in violation of the CARES Act and discrimination against the disabled in violation of various federal requirements.

But, the Department delayed taking any action by pushing the issue back to federal authorities for additional clarification.

In the meantime, actual cases regarding the denial of unemployment eligibility continued. On June 30th, I filed an appeal in one of those cases. In this appeal, I asked the Commission for a quick decision in this matter, given how many of the disabled have been going without any unemployment support or work for months now.

The Department filed an answer on July 7th.

In contrast to Sec. Frostman’s letter, the Department maintained in this answer that the Commission should affirm the denial of benefits to this disabled worker because she received SSDI benefits and that any decision regarding her PUA benefits claim had to wait until the Department issued a decision (which the Department would NOT do until all her other claims and appeals were exhausted).

It was as if Sec. Frostman had never issued his letter at all.

Moreover, this answer was just plain wrong on about everything it said legally. So, I filed a response the next day.

For instance, the Department’s answer says that discrimination against the disabled regarding eligibility for SSDI recipients was previously decided by the Commission in Rose Hanley, UI Hearing No. 17600677MW (7 April 2017). That case can hardly be considered legally definitive, as no detailed argument or explanation is provided regarding the discrimination claim in question. Furthermore, that case concerned a claim of discrimination in violation of the Americans with Disabilities Act, which applies in employment and housing and access to buildings. As noted in my letter brief and Sec. Frostman’s letter, the federal discrimination laws that apply to the administration of unemployment benefits are quite different and specifically acknowledged by federal authorities and the Commission (but apparently not the Department as a whole) as applying to the administration of unemployment benefits.

My response to the Department’s answer also included the following poster, which used to hang in the unemployment offices of this state.

Unemployment poster

This poster indicates why all workers need unemployment benefits. But, in fighting a decision to find the disabled eligible for unemployment benefits, the Department is ignoring why Wisconsin invented unemployment benefits in the first place. A weekly benefit for food and shelter does not exist when the state agency actively takes every opportunity to deny unemployment benefits for weeks and now months at a time.

As I wrote in my response to the Department’s answer:

Today, July 8th, for the claimant featured in this media report — https://www.wisconsinwatch.org/2020/06/wisconsin-blocks-pandemic-payments-for-federal-disability-aid-recipients/ — I received an appeal confirmation for an appeal I filed on May 15th. It is beyond cruel to make SSDI recipients wait several more months for their PUA claims to be adjudicated in the Department’s discretion. People and their families literally are starving because of inaction and legal delays by the Department.

Despite Sec. Frostman’s June 9th letter admitting the denial of PUA benefits to the disabled is not supported by the CARES Act and is discriminatory, the Department is fighting a decision on this very issue and is instead only offering weeks of additional delay.

The people of Wisconsin deserve better.

Update (9 July 2020): for some basic information about who receives SSDI, see this explanation.

 

Unemployment in North Carolina

ProPublica details perhaps the worst state in the nation for unemployment: North Carolina.

A few highlights from the article.

Some state unemployment systems have long been designed to exclude applicants. . . . Among the worst, historically and at present, is North Carolina. At the end of 2019 — when the economy was humming and pandemics were the stuff of horror fiction — fewer than 1 in 10 jobless people in North Carolina received unemployment benefits. That’s the lowest rate in the country and well below the average of 26%.

* * *

In Massachusetts, 66% of new applicants got their unemployment insurance payments in March, compared with 29% nationally and fewer than 10% in North Carolina . . .

North Carolina made radical changes to its unemployment system by essentially reducing unemployment benefits, making eligibility much harder to obtain, and reducing employers’ unemployment taxes even further. So, like Wisconsin, North Carolina paid off its debts on its unemployment trust fund by 2015 (actually, Wisconsin paid off its debt by 2014).

The result, as detailed in the article, is an incredibly complex and confusing system for claimants to navigate.

While Wisconsin did not adopt all of the legal changes done in North Carolina, administrative policy choices in Wisconsin have succeeded in lieu of the missing legal changes in making unemployment here impossibly difficult.

Now, in the midst of the pandemic, folks in North Carolina are finding themselves without the vital economic support unemployment is supposed to provide. Unfortunately, many in Wisconsin have had a similar experience. The biggest difference from North Carolina has been in how the new governor has attempted to fix the unemployment system.

Such an attempt to reverse course is precisely what’s happening in North Carolina right now. Since March, Roy Cooper, the state’s Democratic governor, has signed several executive orders to temporarily remove some of the obstacles from the application process. The orders waive the requirement that applicants search for work; eliminate the one-week waiting period between filing for unemployment and receiving benefits; and allow employers to file claims for entire groups of workers who have been laid off. (The DES, according to Rhoades, its spokesman, has also acted to “improve its processes, technology and staffing levels to respond to the surge in claims,” including by adding an online chat feature and increasing staff from 500 employees to 2,600.) The orders show, Evermore said, that “when the government decides to clear away the roadblocks to paying benefits, it can.”

As noted here, North Carolina has even managed to get PUA benefits to its SSDI recipients, something Wisconsin cannot seem to accomplish despite admitting it is discriminating against the disabled.

Hat tip to Art Heitzer for bringing this article to my attention.

Delays are a choice

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

No PUC for you: DWD denies a federal $600 payment when there is a “BAR”

CBS 58 has a report about how Wisconsinites with a BAR are not receiving any of the $600 PUC payment despite guidance that they should receive at least $300 PUC payment each week. The key paragraph from the story:

“We have received verification [from the US Dep’t of Labor] that if somebody has a BAR fine, which is a benefit amount reduction, they are not eligible to receive Federal Pandemic Unemployment Compensation, which is the acronym FPUC or the additional $600 a week, and basically it’s because this person was found to have committed fraud against the system and therefore they would not be able to get those additional benefits due to that bar penalty as a result of committing fraud,” said Emily Savard with the Department of Workforce Development.

Here is the May 8th e-mail message in which the Department announced this policy to its staffers:

From _, Melissa – DWD
Sent: Friday, May 08, 2020 10:46 AM
To: _
Subject: FPUC and BAR

If a claimant does NOT receive UI, PEUC or PUA payment for a week because the entire amount is applied to the Benefit Amount Reduction (BAR) the claimant will not receive Federal Pandemic Unemployment Compensation (FPUC) (extra $600).

Melissa _
IQ Supervisor (Integrity and Quality)

The Department’s own original April 20th guidance on PUC benefits did NOT have this exclusion (emphasis supplied).

Eligible to receive a payment under UI, UCFE, UCX, PEUC, PUA, EB, STC, TRA or DUA. FPUC is added after all debts are offset, forfeited, or applied to a benefit amount reduction from the individual’s UI. Individuals whose UI payments are intercepted to pay debts (child support or pverpayments) are eligible for the $600 FPUC payment, even if 100% of their weekly benefit amount is intercepted.

What changed?

According to the CBS 58 report, the Department asked for additional guidance from the US Dep’t of Labor on this issue. But, why would additional guidance be needed?

A BAR used to be called a forfeiture of future unemployment benefits. Here is how an initial determination in 2016 regarding a “BAR” read:

Effect

The claimant shall forfeit $12705.00 of unemployment compensation benefits that become payable during the six year period that ends 02/05/22.

Additionally, the Department may at a later date seek criminal prosecution under Wis. Stats. 108.24.


Forfeiture (the withholding of future payable benefits) is an administrative penalty for intentionally concealing information affecting your unemployment eligibility and is in addition to any overpayment caused by such concealment of information.


And, here is the relevant language for a “BAR” in an initial determination in 2018:

Effect

The claimant’s benefit amount shall have a reduction of $1480.00. This reduction remains in effect for benefits and weeks that become payable during the six-year period that ends 02/15/25.


This benefit reduction of future payable benefits is an administrative penalty for intentionally concealing information affecting your unemployment eligibility and is in addition to any overpayment caused by such concealment of information.


There has been NO change in this law, Wis. Stat § 108.04(11), during this time. The only change has been in how the Department characterizes this forfeiture of future unemployment benefits.

But, this change in terminology by the Department is important. Federal guidance for the payment of the $600 PUC payment has the following information about when there is an over-payment of benefits because of a forfeiture and whether the $600 PUC is still paid:

Question: Must FPUC payments be used to offset intrastate state or federal UC overpayments?

Answer: Yes. FPUC payments must be reduced to recover state and federal UC overpayments if the state has a cross-program offset agreement in place with the Secretary under Section 303(g)(2), SSA (42 U.S.C. § 503(g)(2)). However, a state may not offset more than 50 percent from the FPUC payment to recover overpayments for these unemployment benefit programs.

UIPL 15-20 PUC benefits, Change 1 (9 May 2020) at I-2 (emphasis supplied).

Essentially, the Department is claiming that this change in wording in how it calls this forfeiture of future unemployment benefits — from a forfeiture to a benefit amount reduction or BAR — means that the federal guidance about still paying $300 of the federal PUC payment (and earmarking the other $300 towards the remaining benefit amount reduction) does not apply.

Again, as with eligibility for PUA benefits for the disabled (see the discussion of SSDI in this post), the Department is going out of its way to stymie the whole purpose of the CARES Act: to stimulate the economy by giving folks needed cash to pay for rent and groceries.

As the federal guidance for PUC payments explains:

Question: When is an FPUC payment considered to be overpaid?

Answer: An FPUC payment is an overpayment any time an individual receives an FPUC payment for which the individual was not eligible. For example, if an individual is paid FPUC and the underlying UC benefit payment is subsequently denied and determined to be overpaid, then the FPUC payment is also overpaid. However, if an individual is eligible receive at least one dollar ($1) of underlying benefits for the claimed week, the individual is eligible to receive the FPUC payment for that week.

UIPL 15-20 PUC benefits, Change 1 (9 May 2020) at I-2 (emphasis supplied).

All the claimants currently under the BAR penalty are seeing in their benefit statements that they are being credited/reduced each week for these BAR/forfeiture penalties. Just like any forfeiture, these funds simply are not being paid out to them. So, why is the Department at least not paying out the $300 PUC as per federal guidance on this issue?

from a certain point of view

Another reason why Wisconsin UI is faring so poorly: terrible job growth in 2019

Jake has the 2019 gold standard numbers, and they are just terrible.

Wisconsin’s rate of job growth started to decline in mid-2016, and has pretty much gone down since then, with the except of a Bubbly 6 months after the GOP Tax Scam was signed into law. But last year was a new depth, with barely more than 5,000 jobs added from December 2018 to December 2019, and we even slipped below 0 in November before a small rebound in the last month of 2019.

2019 jobs numbers

Jake compares the jobs picture in Wisconsin with Minnesota, and the comparison does not go well for Wisconsin.

Total jobs added, QCEW 2010-2019
Minnesota    330,103
Wisconsin    227,993
Difference   102,110

Jake further points out that the 2019 data for Wisconsin reveals that Dane County by itself is providing the job growth for the entire state.

Jobs added, Wisconsin 2019
Dane County    +7,446
REST OF WIS    -2,367

As Jake concludes:

This data sure seems to indicate that we could learn something by being more like Minnesota and Dane County, because that’s what was working before the COVID-19 recession hammered everyone starting in March. And today’s report is yet another blaring piece of evidence of just how much we have been held back during the Age of Fitzwalkerstan. It needs to be ended ASAP, and it goes well beyond changing who is in the Governor’s office.

Because job growth has been so anemic in Wisconsin, unemployment is that much more important as a wage replacement. But, as indicated previously, Wisconsin’s policies over the last decade have made unemployment much, much more difficult to get. Now with the pandemic and absolutely no jobs available at all, folks who have been suffering under meager job growth the past decade have absolutely nothing to fall back on other than unemployment. And, that system is designed to be difficult and cumbersome.

The Evers administration could start fixing this system by actually following the law rather than subverting it, as it is currently doing by denying PUA benefits to the disabled (see the discussion of SSDI in this post). And, the Evers administration could take a look at what our neighbor in Michigan is doing to make an equally difficult unemployment system at least less burdensome on claimants and the workers who have to administer that system. The results of these efforts in Michigan speak for themselves:

PUA payments the week ending April 25th

Chart courtesy of NELP

In comparison to Michigan, Wisconsin will only begin to start paying out PUA benefits next week.

Wisconsin remains . . .

Filing a claim?

Policy choices with unemployment

Right now, there are many, many unemployment claims being filed in Wisconsin. But, the problems folks in Wisconsin are having with their claims arise to a great degree from policy choices being made about how those claims should be processed and how the Department decides to enforce federal and state legal requirements.

Last week, the NY Times Upshot examined claims data for all 5o states and concluded that, in general, states have made it harder to get jobless benefits.

The story included three charts indicating in various ways how unemployment eligibility and payments have changed for each state. Here are those charts with Wisconsin marked by a green dot. As evident in these charts, Wisconsin has made it much harder to get unemployment benefits.

Percentage of unemployed who receive unemployment benefits

Here, we see that in 2007 roughly 50% of Wisconsin’s unemployed received benefits in 2007. Now, in 2019, that percentage has dropped to around 30%. This drop is actually greater than the drop in Florida noted in the article. Indeed, it seems that only North Carolina, the other state noted in the article, had a greater drop.

making a claim versus receiving benefits

Here, we see that in the weeks from mid-March to mid-April 2020 in Wisconsin around 13% of the employees have applied for unemployment benefits. But, less than 10% of those applicants ended up receiving unemployment benefits. The change here is not that stark. But, Wisconsin does not fare all that well on this issue when compared to its neighbors Michigan and Minnesota.

Denial rates for failing to meet continuing eligibility requirements

Here, we see where Wisconsin has instituted another dramatic change. In 2007, less than 2% of weekly claims were being denied for failing to meet continuing eligibility requirements. In 2018, however, the percentage of claims being denied for this reason was nearly 8%, a four-fold increase.

Indeed, Wisconsin’s efforts on this front exceed that of Florida, a state notorious for creating these obstacles. And, while other states like Mississippi, South Carolina, and others were even more effective than Wisconsin in getting claims denied for these reasons, the shift in Wisconsin is even more extreme when considered in light of Wisconsin’s role in creating the unemployment in the first place.

Note: see this post for how states have used these obstacles to unemployment benefits to suppress growth in wages.

Essentially, Wisconsin and other states have completely turned away from the goal of providing economic security for the unemployed. It does not need to be this way. As evident in these charts, not all states are like Wisconsin, Mississippi, or Florida.

In 2007, unemployment in Wisconsin was once quite similar to Massachusetts. Today, the weekly benefit rate in Massachusetts is around $600 a week, and more than 50% of the unemployed still receive unemployment benefits in that state. Wisconsin took a much different path. The question is what path Wisconsin will take next.

Will Wisconsin continue to be like Mississippi and Florida and North Carolina? Or, will Wisconsin return to the kind of unemployment system the state originally created.

Good Cop or Bad Cop

Backlogs with claims

Unemployment claim-filing is up, way up.

Initial Claim-filing data

          2020      2019    ratio
w/e 03/14   5,698   5,587   1.0
w/e 03/21  69,342   5,216   13.3
w/e 03/28 115,679   5,640   20.5
w/e 04/04 103,226   5,173   20.0
w/e 04/11  65,654   4,619   14.2
w/e 04/18  56,038   4,624   12.1
w/e 04/25  48,630   4,570   10.6
w/e 05/02  39,278   4,146   9.5
w/e 05/09  35,134   4,026   8.7

Source: https://dwd.wisconsin.gov/covid19/public/ui-stats.htm

For the week ending May 16th, initial claims filed on Sunday alone (4,135) were more than all the claims filed the equivalent, entire week in 2019 (3,460). So, even as the trend in new claims is slowing, the numbers are still overwhelming.

Furthermore, this data only includes claims for regular unemployment benefits. Claims for PUA benefits are not included here. As of May 9th, the Department reports 72,695 of these PUA claims having been filed (none of these PUA claims have yet been approved, apparently).

My sources within the Department indicate that the Department is weeks behind on processing the documents claimants and employers are submitting by fax or by mail. And, by processing, I mean simply scanning the documents into the Department’s computer system and associating those scanned documents with the correct claimant and employer.

Note: as of mid-April: UCB-23 forms (weekly wage confirmation notices) were being scanned from 4/6/20 with ~16,000 in the queue; UCB-16 forms (separation notices) were being scanned form 3/30/20 with ~54,000 in the queue; ~40 mail bins dating from 4/10/20 had yet to have their contents even opened.

Even at hearing offices, it takes five to ten days from when a letter is faxed or received before the received documents are scanned and entered into the Department’s claim-filing systems.

Note: Accordingly, if you need to update your availability or a phone number for contact purposes, it is best to call the hearing office rather than sending a letter or even providing the requested form.

And, it appears that the Department is ignoring this backlog when deciding cases and scheduling hearings. I had a hearing on Monday, May 11th, in which there was only seven days notice. As a result, the documents I submitted in a letter dated May 5th were NOT available to the administrative law judge. Luckily, those documents were made available through other mechanisms during the hearing. But, if those other mechanisms had failed, the hearing would have had to be postponed until another several weeks had passed.

Claimants have also contacted me about their claims being denied for failing to provide requested documents. They did provide the requested documents on time, but the deadline passed without those documents being uploaded into the Department’s system. So, rather than account for this backlog, the adjudicator/investigator denied the claim because the requested documents were not yet available in the system and dinged the claimants for failing to respond on time.

In these ways, the Department is essentially penalizing claimants for its own backlog.

Given how the numbers of new claims continue to dwarf the claims filed in 2019, these problems will continue. Until the Department acknowledges this backlog, claimants will simply have to jump over these additional hurdles being placed in their path by the Department.

The claim-filing process should NOT be a contest, however.

Hurdles

Why there is an administrative crisis with unemployment benefits

Unemployment benefits are specifically geared to provide benefits when there is a sudden loss of work, including catastrophic and widespread job loss. Indeed, the story of how unemployment was started in Wisconsin bears this point out in detail. It is no accident that unemployment started in the Great Depression.

So, the meltdown in unemployment systems in which phone systems and on-line systems are crashing and breaking is particularly noteworthy. Unemployment is supposed to be as simple and as easy to manage as possible. That simplicity is one of the reasons unemployment was considered to be one of the central mechanisms for financial relief during this pandemic.

NELP reports how numerous states have failed to meet these basic and essential requirements for effective unemployment administration.

States Choosing to Reduce Access and Cut Benefits Led to Current Dysfunction

Washington, DC — As millions of unemployed workers across the country struggle to access the unemployment benefits they desperately need, a new report from the National Employment Law Project examines the poorest-performing states and their policy choices following the Great Recession that led to the current crisis. By cutting the number of weeks of benefits, slashing benefit amounts, or imposing barriers to obtaining and keeping UI benefits, states such as Florida, North Carolina, and others have badly eroded one of the most important tools for countering recessions. Jobless workers are now bearing the brunt of those poor policy decisions.

“This perfect storm of unemployment benefit cuts and access restrictions so destabilized the foundation of the unemployment insurance program that we are now witnessing its dysfunction in real time,” said Michele Evermore, a senior policy analyst and researcher with NELP, and author of the report.

Broken unemployment insurance infrastructures — particularly in states like Florida, which created an application process designed to discourage workers from accessing their earned benefits — are now wreaking havoc for jobless workers who need those benefits but are unable to access them. As of April 18, the state had only processed 5 percent of the claims submitted since the beginning of the pandemic, with no count of how many workers were unable to file at all.

“Policymakers must learn the lessons from past and present mistakes and ensure that state governments can provide unemployment insurance that meets the needs of all workers — both in terms of delivering adequate emergency support and by making sure that all workers have access,” said Evermore. “We know that benefit duration cuts have a disparate impact on communities of color, as Black and Latinx workers face unemployment rates at unwaveringly higher levels.”

NELP analyzed the value of states’ weekly benefits versus the average weekly benefit nationally (not taking into account workers who are unable to access benefits) and found the following:

  • In Florida, the average weekly benefit of $252.87 replaces only 38 percent of pre-unemployment average wages. If the state’s 339,150 insured unemployed workers had been paid just the national average benefit of $370.82, that would have meant $40,002,742 in additional benefits paid to claimants in Florida just for the week ending April 4, 2020.
  • In North Carolina, the average weekly benefit was $264.70 in the third quarter of 2019. If the 359,151 insured unemployed workers in the state for the week ending April 4 were paid the national average of $370.82, then $38,113,104 more in benefits would have been paid to workers in the state.
  • If Indiana paid the national average in weekly benefits, the 152,609 insured unemployed workers for the week ending April 4 would have been paid $10,807,769 more in benefits in that week alone.
  • In Arizona, if the 116,782 insured unemployed workers in the state in the week ending April 4 had received just the national average benefit, that would have put an additional $16,003,805 in the pockets of Arizonans that week alone.
  • In South Carolina, if the $273.74 weekly benefit were just raised to the national average weekly benefit, the 125,376 insured unemployed workers in the state in the week ending April 4 would have received an additional $12,171,502 in benefits that week alone.
  • In Louisiana, if the 213,338 insured unemployed workers in Louisiana in the week ending March 28 had been paid the national average benefit, they collectively would have received an additional $33,031,122 in benefits that week alone.
  • If Tennessee’s 206,622 insured unemployed workers had received the national average benefit in the week ending April 4, workers in Tennessee would have received an additional $27,003,429 in benefits that week alone.

“We’ve reached the point where it’s too late to prepare states in advance for the massive tsunami of unemployment that is rocking the economy and state unemployment systems,” said Evermore. “But we’re encouraged to see that some states that had previously implemented harmful cuts and restrictions are now, at least temporarily, restoring benefit durations and are working diligently to get payments to unemployed workers.”

As the report highlights, now is the time for states to strengthen their UI programs and ensure that workers can access meaningful benefits.

While not mentioned in the press release quoted above, Wisconsin figures prominently in the actual report:

Wisconsin is another state in which lawmakers chose to erect barriers to UI benefits. The state increased work search requirements from two per week to four per week, and five for workers who are unemployed for seven weeks or more (if the agency makes a determination that the claimant “is placing unreasonable limitations as to salary, hours, or conditions of work in accepting new work or is not engaging in work search efforts as would a prudent person who is out of work and seeking work”). It also established a voluntary system for employers to report failed drug tests to the state agency in order to more easily disqualify workers. It reduced wage levels that qualify as suitable work, increased penalties for fraud determinations, and eliminated good cause for failure to appear weekly to report information about benefits and recipients’ demographic characteristics.

While then-Governor Scott Walker touted these reforms and the effect they had on UI trust fund solvency, Black workers were criminalized by the system while the state’s Black/white unemployment gap is among the worst in the nation. While 29 percent of unemployed workers receive benefits — a little above average — it marks a steep decline from the 50 percent recipiency rate in 2007. The average weekly benefit of $323.90 replaces 43 percent of previous income.

As already noted here, the numerous filing requirements Wisconsin has instituted remain in place during this pandemic even though the point of these requirements — four job searches a week — is currently waived.

So, Wisconsin, which created unemployment during the Great Depression, now finds itself in the ranks of Florida and other states that have made the claim-filing process increasingly harder and more complicated in complete disregard of the whole point of unemployment benefits: to provide needed income when work is not available.

Sad porg

Eligibility for PUA benefits

On April 14th, the Department released some initial guidance on PUA benefits — the unemployment benefits available to those who do NOT qualify for regular unemployment benefits.

As already noted, the Department will begin accepting PUA claims the week of April 21st.

Note: Scammers have popped up relating to unemployment claims. While you are entitled to representation for any part of the unemployment filing process, you should be extremely cautious about anyone who wants money up front or wants you to turn over your confidential claim-filing information.

The Department has severe penalties for those who do NOT keep their claim-filing information confidential. Because the unemployment claim-filing process is specific to each state, no one should be claiming they can assist you with your unemployment claim across state borders.

What are PUA benefits?

California’s labor secretary says it best:

The CARES Act also created a special program for this crisis called Pandemic Unemployment Assistance, or PUA. PUA provides federally funded benefits distinct from the UI program for certain individuals out of work or partially unemployed due to the COVID-19 crisis, including the self-employed, individuals who lack sufficient work history, and independent contractors. Federal guidelines on how to administer PUA came out on April 5 and include gig workers as an example of those eligible for PUA.

Under PUA, individuals can receive weekly unemployment assistance that may be equivalent to what individuals would get under UI (depending on their earnings and whether earnings can be verified). Those who get PUA also get the $600/per week additional payment added to UI for weeks they are unemployed from March 29 until the end of July. PUA benefits can cover people unemployed or partially unemployed due to COVID-19 from January 27, 2020 through December 31, 2020 depending on date of actual impact. In other words, it is retroactive to the time before the federal stimulus bill was passed and before funding was made available. The retroactivity means more money in people’s pockets and we are anxious to get that out. When you apply and your application is approved, you will get PUA benefits going back to the first full week of February as long as you can show that your inability to work was COVID-19 related.

Who is eligible for PUA benefits?

Applicants will need to provide self-certification (a statement of some kind) that they are:

(1) partially or fully unemployed, OR

(2) unable and unavailable to work because of one of the following circumstances:

  • They have been diagnosed with COVID-19 or have symptoms of it and are seeking diagnosis;
  • A member of their household has been diagnosed with COVID-19;
  • They are providing care for someone diagnosed with COVID-19;
  • They are providing care for a child or other household member who can’t attend school or work because it is closed due to COVID-19;
  • They are quarantined or have been advised by a health care provider to self-quarantine
  • They were scheduled to start employment and do not have a job or cannot reach their place of employment as a result of a COVID-19 outbreak;
  • They have become the breadwinner for a household because the head of the household has died as a direct result of COVID-19;
  • They had to quit their job as a direct result of COVID-19;
  • Their place of employment is closed as a direct result of COVID-19; or
  • They meet other criteria established by the Secretary of Labor.

OR are (3) self-employed (and have lost work), OR

(4) seeking part-time employment (if state law allows for benefits for PT workers) [Wisconsin’s benefit formula encourages part-time work when receiving unemployment benefits, but requires claimants to be looking for full-time work or as much work as possible for that individual given that individual’s physical limitations], OR

(5) do not have sufficient work history to qualify for regular unemployment, or otherwise do not qualify for state unemployment.

The Department will most likely seek verification of this information. So, a claimant stating that there has been a loss of work will need to produce receipts or pay stubs verifying that loss of work, as starting on the date the claimant claims the loss of work started.

This certification will also be made in light of numerous warnings about being made under penalties of perjury, that misrepresentation constitutes fraud, and that claimants will be subject to criminal prosecution for that fraud.

And, please understand that all of these categories are inclusive. That is, eligibility can be based on ANY one of these categories. Failure to meet one category does not mean you are excluded from PUA eligibility if another category makes you eligible.

Note: But, no one should think that quitting a job to collect PUA benefits is acceptable. According to the Labor Department: quitting a job in order to gain access is unemployment benefits is NOT a valid reason. “Individuals who quit their jobs to access higher benefits, and are untruthful in their UI application about their reason for quitting, will be considered to have committed fraud.”

Per UIPL 16-20, the guidance document for PUA benefits, here is some specific information for various scenarios.

Partial loss of work (category 1)

Throughout this federal guidance, it is repeatedly stated that eligibility for PUA benefits exists for a partial loss of work connected to the pandemic.

So, an employee who can still tele-work (generally, a disqualification for being eligible for PUA benefits because the person still has work options) for three days a week but was previously working five days a week before the pandemic will be eligible for PUA benefits for the two days a week they now can NOT work because of the pandemic.

In other words, eligibility for PUA benefits does NOT turn on a complete loss of work. All that you need to demonstrate is that there has been some loss of work connected to the pandemic.

To be a “covered individual” under PUA, an individual must also self-certify that he or she is otherwise able to work and available for work, as provided under state law, except that the individual is unemployed, partially unemployed, unable to work or unavailable for work due to at least one of the following categories described below.

UIPL 16-20 at I-3 (emphasis supplied). What this provision means, in part, is that all of Wisconsin’s job search and eligibility requirements will also apply for recipients of PUA benefits.

And, ALL claimants should understand that the US Dep’t of Labor asserts that the PUA benefits are very temporary. Someone in quarantine, for instance, should only be out of work for two weeks, according to the Labor Department. And, employees who have to care for children who are not in school can only claim benefits until the school year ends in early June. See UIPL 16-20 at I-7.

In other words, for each week claimed, expect to have to demonstrate that the loss of work at issue in your claim is still occurring.

Lacking sufficient work history (category 5)

an individual “lacking sufficient work history” means an individual (1) with a recent attachment to the labor force (2) who does not have sufficient wages in covered employment during the last 18 months to establish a claim under regular UC, and (3) who became unemployed or partially unemployed because of one of the COVID-19 related reasons identified under Section 2102.

UIPL 16-20 at I-3.

So, under this guidance, all three of these conditions must be met for someone who lacks the wages to qualify for regular unemployment benefits to receive PUA benefits.

The self-employed (category 3)

as defined in 20 C.F.R 625.2(n) means individuals whose primary reliance for income is on the performance of services in the individual’s own business, or on the individual’s own farm. These individuals include independent contractors, gig economy workers, and workers for certain religious entities.

UIPL 16-20 at I-3.

This category is probably the largest number of people eligible for PUA benefits. Anyone who gets a 1099 form or runs his or her own business will be applying for PUA benefits as self-employed.

This category will probably also be the most difficult in which to file a claim. Besides the certification about your lack of work that you will need to provide and sustain for every week you claim PUA benefits, you will also need to provide detailed information about your earnings as described below under Earnings questions.

And, for each week of your claim, you will need to document how much work you have done that week. For many, you will need to document having no work by establishing what requests or contacts from potential customers have NOT occurred along with demonstrating your availability that for those potential customer contacts each week. How the Department will carry out these requirements remains to be seen.

Interestingly, the Department “must identify individuals who are potentially eligible for PUA and provide them with appropriate written notification of their potential entitlement to PUA, including filing instructions. This includes notifying claimants who were found ineligible for UC as far back as January 27, 2020.” The Department “must [also] notify all appropriate news media having coverage throughout the state of the beginning of the PUA program.” UIPL 16-20 at I-14.

So, anyone denied regular unemployment benefits should receive notice about applying for PUA benefits. Apparently, this press release was the required notice to media. In comparison, other states have instituted social media campaigns and other kinds of notices.

SSDI recipients (category 5)

Wisconsin (as well as North Carolina) makes anyone receiving SSDI benefits completely ineligible for regular unemployment benefits.

So, if these individuals have lost work because of the pandemic and are NOT eligible for regular unemployment benefits, they should be eligible for PUA benefits.

Update (15 May 2020): At some point this week, DWD added the following to its PUA FAQ:

PUA-SSDI_2020-05-15

How the Department reached this conclusion is unknown and unclear. Luckily, someone contacted the Department last week, and they exchanged these messages. As evident in these messages, the Department is claiming that the prohibition in state law on unemployment eligibility for SSDI recipients governs federal PUA eligibility because federal law did not explicitly indicate PUA eligibility for SSDI recipients.

Furthermore, the Department has apparently decided that because there is no PUA eligibility for SSDI recipients because of the state law prohibition, the Department will NOT be issuing any initial determinations to SSDI recipients regarding a denial of PUA benefits. So, if folks wait for a PUA initial determination that never arrives, they will miss the appeal deadline regarding their denial of regular unemployment benefits which, according to the Department, governs their PUA eligibility. Then, many weeks later, if they try to appeal that first denial of their eligibility, they will need to indicate why that now late appeal should be excused for reasons beyond their control. Good luck with convincing the Department that you did not realize you were never going to get an initial determination concerning your eligibility for PUA benefits, since the Department just posted that cryptic Q&A cited above on its PUA FAQ.

Yikes. As someone else commented on this blog, this kind of procedural nightmare is “weaponized bureaucracy at it’s finest.”

So, anyone getting denied for unemployment benefits because of SSDI benefits should appeal as soon as possible. That denial determination is the only determination you will likely receive. If you do not appeal, you likely will lose all eligibility for PUA benefits even though the determination says nothing about PUA benefits.

As for the Department’s legal reasoning on claiming that state law governs on this issue, federal law and guidance plainly indicate otherwise. See this appeal letter I am sending in on these cases. The Department is simply going out of its way to deny the disabled eligibility for PUA benefits.

Update (29 May 2020): Fox6 has the following report that details the problems Wisconsin is creating for the disabled on this issue.

Loss of work because of COVID-19 illness (category 2)

Unless your employer has indicated you should not work because of your suspected or confirmed COVID-19 illness, you will need a confirmed medical diagnosis or a positive test result (yes, despite testing still being extremely difficult and rare) to indicate you cannot work because of your COVID-19 illness or the pandemic-related illness of a family member for whom you are providing care. See UIPL 16-20 at I-4.

If your own physical health makes you susceptible to COVID-19, you will need specific medical advice to stay away from work in order to qualify for PUA benefits. Your own judgment about your health is insufficient. UIPL 16-20 at I-5.

Loss of work because of business closure or governmental order (category 2)

A governmental order restricting travel in a way that prevents you from getting to and from work does qualify you for PUA benefit eligibility. UIPL 16-20 at I-5. A governmental order closing the place of business where you work also qualifies you for PUA benefits. UIPL 16-20 at I-6.

Interaction with paid sick leave or PTO

The availability of paid sick leave or PTO makes a claimant ineligible for PUA benefits if this paid leave completely covers the loss of work.

But, if this leave only provides partial coverage for the loss of work (and that loss is connected to a pandemic-related illness as described above), then you may be eligible for partial PUA benefits. UIPL 16-20 at I-7.

Conflicts between Wisconsin and Federal guidance

Conflicts already exist between Wisconsin and federal guidance about PUA benefits. So, expect eligibility issues to be a major factor in your case. For instance, compare these two Q&As (as of 16 April 2020):

Wisconsin
Q: Am I eligible for PUA if my work allows me to telework for pay?

A: No, if you have the ability to telework and be paid the same as you have customarily worked prior to the COVID-19 pandemic, then you are not eligible for PUA.

Federal
Q: My employer will let me work from home with pay. However, because my children are out of school and my spouse is working, I need to care for them and it is too difficult to work from home. Under Section 2102(a)(3)(A)(ii)(I)(dd) of the CARES Act, I self-certify that I need my kids to be at school in order for me to be able to work. Do I qualify for PUA?

A: You may qualify. The CARES Act does provide PUA to an individual who is the “primary caregiver” of a child who is at home due to a forced school closure that directly results from the COVID-19 public health emergency. However, to qualify as a primary caregiver, your provision of care to the child must require such ongoing and constant attention that it is not possible for you to perform your customary work functions at home. For example, if your employer allows you to telework and you are caring for a more mature child who is able to care for him or herself for much of the day, you likely would not qualify for PUA because you are still able to work.

In addition, you should bear in mind that the CARES Act provides PUA only when a child is home because of a school closure that is a direct result of the COVID-19 public health emergency. A school is not closed as a direct result of the COVID-19 public health emergency, for purposes of 2102(a)(3)(A)(ii)(I)(dd), after the date the school year was originally scheduled to end. That means that, once the school year is over, parents should rely on their customary summer arrangements for caring for their children, and will not, absent some other qualifying circumstances, be eligible to receive PUA. If, however, the facility that they rely on to provide summer care for the child is also closed as a direct result of the COVID-19 public health emergency, they may continue to qualify for PUA. Similarly, if there is some other reason under which they qualify for PUA, they will continue to be eligible to receive benefits.

In light of these conflicts, expect Wisconsin to follow its own guidance until you point out the correct federal guidance on the issue.

Update (21 April 2020): From Politico’s morning shift (see also this piece from Bloomberg News):

The Labor Department on Friday clarified major pieces of its guidance for the new Pandemic Unemployment Assistance program and said it would issue further follow-up instructions, following criticism the guidelines could leave out workers who should be eligible. Democrats and labor groups have pressed for more details regarding guidance documents issued by DOL meant to help states implement the program, which extends unemployment payments to gig workers and others who ordinarily would be ineligible for unemployment insurance.

Specifically, Democrats requested that DOL clear up confusion surrounding the eligibility of gig workers. In guidance issued by DOL earlier this month, that agency said Uber and Lyft drivers “may not be eligible” for benefits if they claim they’re “unable to reach” their place of employment, because app-based drivers don’t have a place of employment. However, DOL Deputy Assistant Secretary Joe Wheeler affirmed in a letter to lawmakers Friday that independent contractors who experience a “significant diminution” of work are eligible for the aid.

When do PUA benefits start?

Regardless of when you file your initial application, PUA benefit eligibility will be back-dated to the week you can show a loss of work. That loss of work week can start as early as the week ending 8 February 2020.

PUA benefits will end for everyone as of the week ending 26 December 2020, regardless of how many weeks of eligibility remain for any particular claimant.

Earnings questions

Unlike regular unemployment benefits, PUA benefits will range from a minimum of $163 to a maximum of $370 (the range for regular unemployment in Wisconsin is from $50 to $370).

But, the Department will still need to calculate your PUA weekly benefit rate (“WBR”) for this range, and this calculation is based on your earnings in a set of four previous calendar quarters.

Unlike California and several other states which will start paying out PUA benefits within a few days the minimum WBR while gathering more information to determine the specific WBR for claimants, it appears that Wisconsin will want all earnings information up front before issuing any PUA benefits.

So, because all earnings must be presented on a quarterly basis and then verified, expect the application process for PUA benefits to take several weeks at a minimum before any benefit payments are made.

Repayment concerns

Wisconsin’s DWD is aggressive on finding situations for which claimants need to repay benefits. See the discussion about eligibility for PEUC benefits and broad concerns about how the Department charges intentional fraud for unintentional claim-filing mistakes.

So, some folks may already be repaying unemployment benefits when this pandemic started. Here is some good news for these folks: per D.4.a.iii, the $600 PUC benefit is still available to you even if your underlying benefit is being intercepted for recovering an over-payment.

Individuals whose underlying benefit payments are intercepted to pay debts (e.g., overpayments) are eligible for the $600 FPUC, even if 100% of their weekly benefit amount is intercepted. Benefits intercepted to pay debts are considered to be compensation for the week.

UIPL 15-20 at I-6.

A successful claim?

Data provided by the Department indicates that the state has already been failing to approve most of the unemployment claims it has received:

      Weekly claims ratio  Benefits paid   Avg WBR  Year
3/15-4/6    589,616  3.8   $68,759,104.00  $116.62  2020
3/15-4/6    155,148        $39,597,111.00  $255.22  2019

Source

Despite an increase of ~4x in claims being filed, benefits paid are less than 2x the amount. So, the WBR per claimant is also less than half what was being paid per claimant last year for the same time period.

There three possible explanations for this rapid decline in payment amounts. First, many, many more lower-paid workers could be applying (who would have a lower WBR) and higher-earning folks are NOT applying. Second, DWD could simply be denying many more of these claims. Third, DWD could be so overwhelmed with claims that it is failing to act on all of these claims in a timely way.

Given how low unemployment benefits already are in Wisconsin (folks need about $13,000 in income to qualify and they get the max of $370 at around $32,000), it seems that the first explanation is highly unlikely.

The answer most likely turns on a combination of the last two possibilities. The question is which of these is playing the larger role — are more claims being denied or is the Department unable to keep up with all of the claims.

The best advice at the moment is to keep calling the Department about the status of your claim at least once a week. Make sure to talk to someone about the status of your claim. Do NOT expect that leaving a message will lead to a return phone call.

Update (17 April 2020): one of my sources indicate that the backlog is enormous. Only now are they starting to process claims that were filed during the week ending March 28th. These claims were filed during week 13, the second week of the pandemic-caused escalation in claims. We are now in week 16, and claims are STILL running ~12x higher than normal.

Update (21 April 2020): added news item about the Labor Department planning to provide additional PUA guidance to states.

Update (15 May 2020): added information about DWD’s denial of all PUA eligibility for SSDI recipients.

Update (29 May 2020): added additional info regarding a story on the SSDI issue by Fox6.