UI Legislative proposals active in 2016

At the 17 December 2015, several legislative proposals affecting unemployment benefits were described to the Advisory Council. This legislation includes:

  • Returning work search waivers to what previously existed — Employees and employers have begun to voice concerns about how the limitations on work search waivers previously approved by the Advisory Council do not make sense for Wisconsin. No immediate change to the current work search waivers will happen, however. And, whether Wisconsin ever returns to the original rules is uncertain. For instance, there was extended discussion by council members of perhaps allowing employers to designate certain employees for longer waivers because of their skills or high value to the employer but leaving other employees to the now 8/12 week waiver maximum. See my own comments on the proposed regulations.
  • Expanded criminal penalties for unemployment concealment — Previously discussed here.
  • UI law changes in order to counter recent NLRB decisions — Legislators want to pass legislation that will supposedly undo a recent NLRB decision called Browning-Ferris Industries that re-defined the test for determining when the employees of one company will be treated as the employees of another company (e.g., when the employees of a franchisee or temp agency are really the employees of the franchisor or client company because the franchisor or client company sets the terms and conditions of employment for the employees). NOTE: unemployment is not mentioned once in the decision, so the applicability and purpose — let alone its effectiveness — of the state law changes in this proposed legislation are muddled at best. And, as DWD notes in its memo, the changes could be extremely problematic for some Wisconsin employers.
  • Exempting real estate agents from unemployment law — The proposed legislation is intended to remove real estate agents from coverage of any and all employment law and unemployment law issues.
  • Whether UI claimants will have their benefits publicly revealed — As DWD notes, this proposed legislation conflicts directly with federal law.

Also, the Department has begun publishing on its website some of the proposals being discussed by council members, including management proposals to add additional claimant disqualifications and labor proposals regarding new penalties for employers who mis-classify their employees as independent contractors and increasing the wage base and tax schedule for employers’ unemployment taxes in order to make the UI fund solvent. NOTE: This 2013 PowerPoint presentation describes what makes or does not make a UI fund solvent. The Department has yet to publish any of its proposals, so this blog remains the sole source for Department-initiated changes to unemployment law. For instance, the Department is still waiting for the Council’s decision on its UI modernization proposal, D15-06.

NOTE (8 January 2016): At the January 7th council meeting, the Advisory Council approved of D15-06 with minor changes that were not detailed.

Social media protections

Thanks to a reminder from the Wisconsin State Law Library, here is some information about social media protections available in Wisconsin since 10 April 2014 with the passage of SB223 as 2013 Wisconsin Act 208. A legislative council memorandum has the full description of this law.

Recall that around 2011 and 2012, media stories appeared about employers demanding job applicants to disclose passwords to Facebook accounts. While such demands are legal folly, at the time there was nothing explicitly illegal about them. This 2013 act explicitly makes such demands to reveal passwords illegal.

Under this law, an employer, educational institution, or landlord may not ask for or demand an employee, student, tenant, or applicant to reveal personal information associated with an Internet account of some kind, like the passwords or lock codes for a personal e-mail address, a personal cell or smart phone, or a personal Facebook account. Likewise, an employer, educational institutional, or landlord cannot discipline, discharge, expel, or refuse to rent to an employee, student, tenant, or applicant for refusing to disclose such information or who opposes such disclosure.

Employers and educational institutions can request and even demand access to Internet accounts connected to that employer or educational institution, however. Likewise, restrictions on which web sites can be visited and the monitoring of Internet access are available to employers and educational institutions on the networks and equipment they provide. And certainly, information in the public domain — i.e., available without use of a password or pass code associated with the account — is available to the employer, land lord, or educational institution without consequence to them.

Finally, if a personal Internet account or device could reasonably be believed to have information relating to an alleged unauthorized transfer of proprietary or confidential information, company financial data, other employment-related misconduct, any violation of the law, or any violation of the employer’s work rules as specified in an employee handbook, then the employer may, in the course of an investigation into these allegations, require an employee to grant access or allow observation of a personal Internet account or device. Even in this case, however, the employer may not demand the employee reveal the password or lock code associated with the personal Internet account or device.

If an employee, student, tenant, or applicant believes that a violation of this law has occurred, he or she can file a discrimination complaint with the Equal Rights Division of the Department of Workforce Development. In the employment context, the employee or job applicant would be entitled to back pay and reinstatement. In addition, criminal forfeiture penalties of up to $1,000 may also be charged pursuant to Wis. Stat. § 995.55 for violations of this act.

So, Wisconsin joins other states in making demands for Facebook passwords illegal.

This Narcotics Anonymous group brought to you by DWD

Yesterday, the Joint Finance Committee approved of drug testing the unemployed in the proposed budget.

The final testing requirements are similar to AB192 minus the requirement to survey employers about their drug testing. Accordingly, the estimate by the Legislative Finance Bureau to a great extent applies to this similar testing requirement. I went through AB192 costs here. In short, initial costs for setting up the drug testing will be just over $1.6 million, and the annual costs for the drug testing will, it is estimated, be $1.06 million.

The drug testing in the budget bill was previously described here. For the Joint Finance Committee, the Fiscal Bureau added additional analysis for the drug testing that is now in the budget bill. This memo revises the annual cost estimates from AB192 — now only $973,200 — and notes numerous “issues” with this testing. For instance, other drug testing programs have only found extremely low numbers of positive test results, this testing could easily be more expensive than estimated, the testing requirement could — if the full scope of the requirement is allowed by federal authorities and applied by DWD — cover up to 85% of all claimants in Wisconsin, almost 5% of Wisconsin’s workers would most likely be immediately covered by this drug testing requirement, and estimated treatment costs of $2,700 per claimant are really nothing more than guesswork and that actual costs for treatment are unknown.

The ability of employers to volunteer test results of job applicants raises a host of additional problems as well, from whether employers will need to change their testing procedures to DWD-approved testing, potential violations of employee privacy, and creating a host of complications regarding departmental record-keeping requirements. Indeed, the Finance Bureau specifically notes that the Advisory Council previously asked the legislature to repeal a similar testing provision that was passed by the legislature in 2011. And, the legislature did so. None of the issues with that legislation have been addressed in this current drug testing requirement.

So, there are many reasons to think this drug testing requirement is not ready for prime time. But, all of these problems are not what is most remarkable about this legislation. What is most strange here is who is advocating for this testing and what supporters and critics are saying.

As the title for this post indicates, this testing requirement is essentially making the Department of Workforce Development into a sponsor and supporter of drug treatment programs for hundreds of Wisconsin workers. Prior to my arrival in Wisconsin, for some time I lived in Massachusetts, the home state of that lion of the senate, that bastion of liberalism, Ted Kennedy. Senator Kennedy certainly changed his positions on issues over time, but the Kennedy of the 1970s was the symbol of big government programs intended to cure societal ills. In 2015 — forty years later — you would think that the Republicans of today would be as far apart from 1970s big government liberalism as possible, especially when many push President Reagan’s rebuke of that liberalism as a little bit of political heaven on earth.

Yet, during the debate over this drug testing the Democratic members of the Joint Finance Committee were the ones pointing out the wasteful, big government spending at issue with this drug testing. The estimates were low-balled, these Democrats exclaimed, the testing and treatment will accomplish nothing, and government bureaucracy will only make finding work that much harder. WisPolitics budget blog smartly featured the Republicans’ response to these criticisms. Rep. Dale Kooyenga, R-Brookfield, explained: “There’s a tremendous opportunity through good public policy to make a community better.” In 1975, Ted Kennedy could not have said it better, and that is what makes this drug testing one of the strangest pieces of legislation I have ever seen.

Gov. Walker’s proposed UI drug testing

Finally, there are details about the drug testing Governor Walker has been talking about for several months now.

The proposed testing includes three initiatives set forth in a newly created Wis. Stat. § 108.133 (see section 3155 of AB21):

  1. Allowing employers who conduct preemployment drug screenings to report failed tests to the Department.
  2. Requiring drug tests for claimants “for whom suitable work is only available in certain occupations that are federally approved for benefits eligibility testing.”
  3. Requiring drug testing for claimants “for whom suitable work is only available in an occupation that regularly conducts drug testing, as determined by the Department.”

Employer drug test reporting

This employer reporting of failed drug tests was in the 2011 budget. After complaints from the Advisory Council about being bypassed and problems noted by the Department about this employer reporting raising questions over employee privacy and administrative costs, this drug testing reporting was repealed by 2011 Wis. Act 198 before it was ever implemented.

This current proposal is an obvious effort to revive this employer reporting of drug tests. Job applicants here who have test results reported or who refuse a drug test are treated as someone who has refused an offer of suitable work pursuant to Wis. Stat. § 108.04(8). This disqualification means that the person cannot collect benefits until he or she has earned 6x his or her weekly benefit rate.

Proposed Wis. Stat. § 108.133(4)(a) sets forth this reporting option and sub-section (b) states: “The department shall promulgate rules necessary to implement par. (a).” Because not all drug tests are equivalent in accuracy, scope, and process, even rules for confidential handling of drug test results or refusals to take tests only scratch the surface of what kind of rules are needed here. Documentation about the kind of tests being done, the chain of custody for the samples, and options for retests of samples, for instance, will be needed with each test report.

Furthermore, because these test results can come from any employer rather than just a prior employer of an employee (as when an employer discharges an employee for a failed drug test), employers simply screening applicants will be dragged into unemployment hearings for their job applicants who want to contest their disqualification. Most employers do not feel a great need to get involved in such situations.

One final note here about job applicants refusing a drug test. Under this proposal, a job applicant who refuses a drug test is treated the same as an applicant who fails a test. On more than a few occasions, applicants refuse a drug test not because he or she fears a positive test result but because they are no longer interested in the job. For them, a no-show for the test is a better way of turning down the offer rather than telling the employer in person that they do not want the job. Certainly, someone currently collecting unemployment benefits does not have this option, as they must accept all reasonable/bona fide job offers. But, someone who is not collecting unemployment benefits will, under this proposal have to take the test and then turn down the job they are no longer interested in. If they decline the drug test, they risk having their unemployment benefits suspended in the future because of this past refusal to take a test (and, even though this reporting prohibition will only apply to current claimants, there is nothing yet to indicate when an employer report of a drug test will matter or be declared stale for this rule). As a result, employers will be paying for additional tests because applicants will feel pressured to take the tests regardless of actual interest in the work at stake.

Testing in federally approved drug testing occupations

The April 2014 minutes of the Advisory Council described how federal law allows for this drug testing:

Drug Screening
The Middle Class Tax Relief Act of 2012 granted states the option to pass laws to enable their UI agencies to require drug testing on UI claimants. In order to be able to require drug testing, a claimant must have been terminated from their most recent employer due to the use of controlled substances, or if the claimant’s only suitable work involves employment that regularly performs drug testing. DOL is currently promulgating rules that will identify specific industries that regularly require drug testing. Wisconsin law does not currently require drug testing of UI claimants.

This part of the proposal seeks to implement this federal law by requiring those in fields where drug testing occurs because of federal drug testing requirements (e.g., commercial drivers or those in heavy manufacturing) to pass an additional drug test when applying for unemployment benefits.

I am unaware of the status of the federal regulations needed to implement this provision. Even with those regulations in place, the Department will need to undertake the following:

(2) DRUG TESTING PROGRAM. The department shall establish a program to test claimants who apply for regular benefits under this chapter for the presence of controlled substances in accordance with this section and shall, under the program, do all of the following:

(a) Promulgate rules to establish the program. The department shall do all of the following in the rules promulgated under this paragraph:
1. Establish a process to test claimants for the presence of controlled substances. In establishing the process, the department shall adhere to any applicable federal requirements regarding drug testing.
2. Identify the parameters for a substance abuse treatment program for claimants who misuse controlled substances and specify criteria that a claimant must satisfy in order to be considered in full compliance with requirements of the substance abuse treatment program.
3. Create a screening process for determining whether a claimant should be required to submit to a test for the presence of controlled substances.
4. Identify the parameters for a job skills assessment for claimants who misuse controlled substances and specify criteria that a claimant must satisfy in order to be considered in full compliance with the requirements of the job skills assessment.

(am) Promulgate rules identifying occupations for which drug testing is regularly conducted in this state.

(b) When a claimant applies for regular benefits under this chapter, do all of the following:
1. Determine whether the claimant is an individual for whom suitable work is only available in an occupation that regularly conducts drug testing.
2. Determine whether the claimant is an individual for whom suitable work is only available in an occupation identified in the rules promulgated under par. (am).
3. If the claimant is determined by the department under subd. 1. to be an individual for whom suitable work is only available in an occupation that regularly conducts drug testing, conduct a screening on the claimant.
4. If the claimant is determined by the department under subd. 2. to be an individual for whom suitable work is only available in an occupation identified in the rules promulgated under par. (am), conduct a screening on the claimant if a screening is not already required under subd. 3.
5. If a screening conducted as required under subd. 3. or 4. indicates that the claimant should be required to submit to a test for the presence of controlled substances, require that the claimant submit to such a test.

(c) Create and provide a substance abuse treatment program in accordance with the rules promulgated under par. (a)2.

(d) Create and conduct job skills assessments in accordance with the rules promulgated under par. (a)4.

See proposed Wis. Stat. § 108.133(2).  As is obvious, a lot of work is needed to implement this testing requirement. Those who test positive or refuse the drug test face a 52 week prohibition on unemployment benefits unless they enroll “in [a] substance abuse treatment program and [undergo] a job skills assessment.” See proposed Wis. Stat. § 108.133(3)(d).

Gov. Walker has earmarked $500,000 in the 2017 fiscal year budget $1 million in his budget for each of the next two fiscal years for this drug testing and treatment. Staff time and effort on creating and implementing these requirements are not funded separately but come out of general DWD funds. This $500,000 $2 million is a made-up number, and there is no evidence available about what the actual costs of the drug testing and treatment will be will be. Given all the cuts in this budget, these monies would certainly be better spent elsewhere (Wisconsin public radio and television, for instance, could use these funds) than in implementing a drug testing requirement that will very likely cost more than in any unemployment benefits it stops from being paid out.

UPDATE: I misread budget figures and have corrected the proposed budget amount based on the LFB analysis.

Drug testing in other occupations

Here, the proposal goes further than in seeking to implement current federal drug testing legislation. Governor Walker is asking the Department to identify on its own occupations for which drug testing is regularly conducted in the state — see (2)(am) above — and then to expand the drug testing of claimants to all of these fields as well as the federally mandated occupations. This expansion, however, is put on hold (as well as any part of this drug testing proposal) if the Department “determines that waiver of the provision is necessary to permit continued certification of this chapter for grants to this state under Title III of the federal Social Security Act or for maximum credit allowances to employers under the federal Unemployment Tax Act.” See proposed Wis. Stat. § 108.133(5)(d). In other words, federal approval is needed before implementation of this expanded testing, and no testing may take place until federal authorization is obtained. As a result, there is almost nothing that can be determined about this expansion from this proposal.  The substance is lacking.

Gov. Walker’s proposed drug testing plan: Meh

On January 22nd, Governor Walker announced his workforce readiness plan, which includes a proposal to drug test folks who receive food stamps or unemployment benefits.

Food stamps is operationally and legally distinct from unemployment, and so the purpose and mechanism for drug testing in each will have to be very different. Recent commentary on this drug testing issue is available from CogDis and the Wisconsin State Journal. And, here is what Governor Walker stated about this proposed drug testing:

Helping People Move from Government Dependence to Independence:

Some employers in high-demand fields, including manufacturing, require their employees be drug-free for safety and other reasons. To assist those looking to secure these positions, the budget includes a plan to require drug testing of those who are applying for or receiving benefits from programs, which may include unemployment insurance, FoodShare, Transform Milwaukee, transitional jobs, and others.

Those who fail the drug test will be offered the opportunity to participate in a drug treatment program, free of charge, as well as job training.

Huh?  This quotation is all that Governor Walker has actually said about this drug testing proposal. Based on this language, it is hard to know anything about this proposal other than that drug testing may be a possibility. Will drug testing be limited to former employees of an employer who does drug testing? Or, will the drug testing apply to any and all?  How will the drug testing be paid for and how will the tests be handled?  Without the actual mechanics and substance for this proposal (perhaps when the specific budget bill is revealed in early February), about all that can be said about who is actually affected . . .  meh.