At the 15 July 2021 council meeting, labor and management representatives exchanged their own proposals. Labor representatives in general attempt to make unemployment somewhat financially viable in Wisconsin. Management representatives build on prior “reforms” to make unemployment even more difficult and rare. Here is a rundown of those proposals.
1.Fix the funding for the unemployment trust fund by changing how tax schedules are applied. Currently, the tax schedule to be applied to employers is based on the amount of money in the trust fund (which was $919.2 million as of 10 July 2021). This labor proposal would change the criteria to using an unemployment trust fund health number called an Average High Cost Multiple or AHCM.
Schedule A = When UI Trust Fund is below .5 AHCM
Schedule B = When UI Trust Fund is between .5 – 1.0 AHCM
Schedule C = When UI Trust Fund is between 1.0 – 1.25 AHCM
Schedule D = When UI Trust Fund is above 1.25 AHCM
Prior to the pandemic, when the trust fund had nearly $1.7 billion, the average high cost multiple was just under 1. In April 2021, when the trust fund still had slightly over $1 billion, the multiple was around 0.5.
2021 Wis. Act 59 is unnecessarily keeping unemployment tax rates at Schedule D for 2021 and 2022, and this labor proposal would also keep the tax rates at Schedule D. Per Wis. Stat. § 108.18(3m), tax schedules are based on the following trust fund balances (as of June 30th of the preceding calendar year):
Schedule A: less than $300 million
Schedule B: less than $900 million
Schedule C: less than $1.2 billion
Schedule D: more than $1.2 billion
In general, the actual tax rates for Wisconsin employers continued to fall in 2021 from 2020 tax rates because of fewer claims being paid to employees of Wisconsin employers. With fewer claims being paid, employers’ account balances are growing. As a result, employers have been moving to lower tax brackets within Schedule D.
2.Gradually Increase the maximum weekly benefit rate for unemployment benefits to $450 per week.
This proposed change would not take effect for another two years, however.
Current weekly maximum UI benefit $370
2023 Benefit Year $20 increase $390
2024 Benefit Year $20 increase $410
2025 Benefit Year $20 increase $430
2026 Benefit Year $20 increase $450
This increase is half of what the Department proposes in D21-22 and needs to include a repeal of the $500 or more earnings prohibition to be effective, which the Department also proposed in D21-21. For further explanation, see the examination of these Department proposals here. As already noted, Wisconsin’s weekly benefit rate is the second lowest in the mid-west:
State Max. WBR Max. w/ dependents
IL $484 $667
IN $390 $390
IA $481 $591
MI $362 $362
MN $740 $740
OH $480 $647
WI $370 $370
3.Eliminate the one-week waiting period, which is also included in Department proposal D21-19 and previously discussed here.
4.Expand worker mis-classification to all industries and make the penalties identical to claimant fraud. Here, labor representatives support adoption of Department proposal D21-26 and the recommendations of the governor’s misclassificaton task force. As noted in this discussion of the Department’s 2021 proposals, there are administrative and criminal penalties for claimant fraud as well as a different standard of proof for claimant fraud versus mis-classification by employers. It is not clear what the labor representatives are referring to with their proposal about identical penalties.
5.Request the Department to review tax schedules to assess the tax equity of those schedules.
What the labor representatives mean by tax equity is unknown.
1. When upgrading the Department’s mainframe, make sure employers have the ability to verify immediately any work search information that refers to that employer as well as the ability to report immediately any kind of work refusal, a missed job interview, or a decline of a job offer.
Employer’s currently have the ability to report all of this information as well as other kinds of information through the Department’s fraud reporting system.
Also, job search audits done pursuant to Wis. Stat. § 108.14(20) catch the interview and job offer information. This proposal would essentially give employers a direct avenue for challenging claimant eligibility when those claimants are NOT their former employees. For temp companies that have already seen their unemployment tax bills markedly reduced, this proposal secures an additional tool for cutting that tax bill even further. When claimants cannot collect unemployment benefits, then unemployment tax bills decline even further.
2.End the exclusion of union members from weekly job search requirements. Claimants who are working part-time, starting a new job in four weeks or less, will return to their current employer in the next eight weeks or so, AND union members who register on their union’s out-of-work list are exempt from doing four job searches per week. This proposal would require union hiring halls and union members who are on out-of-work lists with their unions to do four job searches per week through the union hiring hall.
This proposal does not make sense in light of how union hiring halls work. Hiring halls function based on the employers who contact them for available workers. But, that is not the point. Rather, this proposal is to draw media attention to this benefit union members enjoy and thereby create a further divide between them and most other workers in the state.
3.Redefine who an employee and independent contractor is for all fields of law to apply a single, common definition built around gig-work.
This proposal would completely upend almost all workplace law in Wisconsin, as one of the main changes being proposed is a person would be an independent contractor whenever a person signs a contract with an employer that states it is their intent to be independent contractor. In contrast to current law that specifies that such an arrangement can NOT be decided subjectively by the parties to the agreement, the proposal here is to give the parties the unilateral authority to create an independent contractor relationship on their own through a services contract.
Note: In practical terms, this authority is unilateral in the sense that individual employees have little to no bargaining power to set the terms and conditions of their employment.
Various “factors” are proposed to assess if a person is an independent contractor or not, but these factors are written so broadly and with so many loopholes that independent contractor status is all but assured. For instance, the services contract can still include a final schedule for delivery and a range of work hours as long as the time personally spent on providing services is left open. And, if costs for licenses, insurance, and certifications are borne by the person, then all is dandy with this gig-worker arrangement. In short, these criteria are not limitations but a road map for how to craft this independent contractor agreement.
Moreover, only four out of ten of these “factors” are needed for an independent contractor relationship to be established. So, an employer can make plenty is mistakes and still succeed on making their employees into gig-workers. A garbage truck driver, a machinist in a metal shop, and even a police officer could easily meet at least four of these factors and so be classified as independent contractors under this proposal.
Finally, this proposal also contains a poison pill that prevents any county or municipality from limiting this sweeping change to employment status in Wisconsin.
Regardless of any state law, however, this proposal if implemented would be a massive headache for employers, as federal wage and hour law, discrimination law, and collective bargaining law would still classify numerous “independent contractors” as employees for federal purposes. This proposal, in other words, is just plain silly and not serious at all.
4.End the 30-day quit-to-try a new job provision.
This proposal is another change that would greatly benefit temp companies by eliminating one of the main mechanisms employees may still qualify for unemployment benefits after trying out a job and quitting within the first 30 days.
By eliminating this provision, employees of temp companies would have to remain at every assignment regardless of fit, skill, wage, and working conditions until the assignment is ended by the employer to retain any hope of qualifying for unemployment benefits at some future date. Indentured servitude, in short, is making a comeback with this proposal.
5.Link the number of weeks of unemployment benefits available to the unemployment rate.
This proposal has been a bugaboo since 2010, as it essentially undermines the ability and scope of unemployment programs to respond in times of crisis. States that have implemented this linkage, like Florida and North Carolina, have been unemployment disaster zones, in part, because regular unemployment benefits were cut off prematurely during the pandemic.
6.Numerous misconduct and substantial fault modifications.
For misconduct, management representatives want to add additional disqualifications concerning employer or customer information while also removing a requirement that employees act intentionally for any alleged “violation.” Absenteeism and tardiness violations will also be both more stringent and applicable regardless of actual reason for the absence or tardiness. Finally, employees would be strictly liable for a violation of an employer’s social media policy, once the employees are made aware of that policy.
As previously noted, these changes would directly run afoul federal requirements and loose Wisconsin employers their federal unemployment tax (FUTA) credit.
Note: A state’s administration of unemployment is funded through the Federal Unemployment Tax Act on their payroll (the first $7000 paid to each employee) that employers pay, called FUTA. Should a state be found to be applying the loss of claimant wage credits for “unintentional” misconduct, Wisconsin employers would lose their FUTA tax credit and be subject to the full 6.0% unemployment tax rate rather than just 0.6%.
In regards to substantial fault, management reps want to undue the court decisions in Operton v. LIRC, 2017 WI 46, and Easterling v. LIRC, 2017 WI App 18, by redefining inadvertent error into harmless error that does not also violate an employer’s written policies. In other words, any error that does not qualify as misconduct would now almost assuredly qualify as substantial fault.
Insofar as state UC law provides for claims to be backdated, the state must continue to take new applications for MEUC as provided in their state law for late filing of claims after the date of termination or expiration (whichever comes first).
UIPL No. 14-21 Change 1 (12 July 2021) at 5. Wisconsin unemployment law provides that initial claims and weekly certifications can be back-dated for exceptional circumstances, like receiving bad or wrong advice from Department staffers. SeeWis. Admin. Code § DWD 129.01(4).
While not addressed so far in federal guidance, it seems that a claimant, who suddenly becomes eligible for possible MEUC benefits after Sept. 4th, should have the option of applying for and receiving MEUC benefits. The original post follows.
MEUC (Mixed Earners Unemployment Compensation) benefits have been over-shadowed by PUA, PEUC, and PUC benefits. But, many self-employed individuals who also engage in regular wage work may be eligible for this benefit that originated with the Continued Assistance Act.
MEUC benefits pay an additional $100 per week from the week ending 1/2/2021 thru the week ending 9/4/2021. You are eligible for MEUC benefits if:
you receive regular unemployment benefits or PEUC benefits (receiving PUA benefits would mean that you have insufficient wage earnings from covered employment to establish a benefit year and so you are receiving those PUA benefits in large part based on your self-employment income), and
you have $5000 in self-employment earnings in either 2019 or 2020.
The Department has created a FAQ for MEUC benefits. The problem is that the application for MEUC benefits is not available. Apparently, the application only becomes available to claimants on the portal when the Department concludes they might be eligible for MEUC benefits.
The Department’s own data indicates that very few MEUC applications have been filed and very little in MEUC benefits have been paid out. From the amount paid and the number of applications and the set amount of MEUC benefits at $100 per week, I can estimate the number of successful MEUC applications each week (presuming that prior approved applications continue to be paid).
From this data, out of 264 applications (i.e., initial MEUC claims) for MEUC benefits, around 64 claimants have been successful, an approval rate of only 24.25%. Obviously, a denial of MEUC eligibility can be appealed and probably should be.
But, those who might be eligible for MEUC benefits need to hurry. After September 4th, initial claims for MEUC benefits will no longer be possible. So, if you have self-employment income and regular wage work that should make you eligible for regular unemployment benefits or the PEUC extension,then you should apply for MEUC benefits.
Unfortunately, getting that MEUC application is difficult. You need to call a claims specialists at 414-435-7069 and ask to file a MEUC initial claim.
Call every few days with this same request until you get to file a MEUC initial claim. If the staffer does not know what you are talking about, then call again to connect with another staff. Repeat until you get to file a MEUC initial claim. Seethis post about my own experience with phone support.
Finally, I have already seen several self-employed individuals who are mistakenly reporting their self-employment income as regular wages on their weekly certifications. When receiving regular unemployment benefits, self-employment income and hours are reported separately from regular wage work. Hours spent in self-employment, if 16 or more hours in a week, will automatically disqualify you completely from receiving any unemployment benefits that week. But, self-employment income does NOT count at all against your weekly benefit rate (Wisconsin may be the only state that does NOT offset self-employment income from weekly benefits). As stated in the employers’ handbook:
Note: When receiving PUA benefits, self-employment income is handled in completely opposite manner. This is one reason why PUA benefits are only available when not eligible at all for regular unemployment benefits.
So, people who list their self-employment income as regular wages are seeing that self-employment income mistakenly offset against their weekly benefit rate. And, because of that mistaken treatment, the Department cannot see that they might be eligible for MEUC benefits because they have self-employment income.
These folks need to call a claims specialist as well to correct their weekly certifications. Before making that call/calls, list out the new hours and earnings that need to entered for each weekly certification that needs to be corrected.
At the 18 March 2021 meeting of the Advisory Council, the Department presented its first eight proposals. These first eight proposals included the proposals that the Advisory Council originally approved of in 2019 (but which were not enacted because of the pandemic).
At the 15 April and the 20 May 2021 meetings of the Advisory Council, the Department presented another 18 proposals — D21-09 thru D21-26. Yikes. Here are those proposals, with links to the actual proposals that appeared at the May 2021 Advisory Council meeting.
D21-09, Employee Status solely determined by unemployment law
The Department seeks to amend the definition of employee and self-employment.
The Department proposes to amend sections 108.09(2)(bm) and 108.09(4s) to provide that all issues of unemployment insurance employee status may only be determined under Wisconsin unemployment statutes and rules. This proposal will provide consistency in determining individuals’ eligibility for unemployment benefits and employers’ unemployment insurance tax liability by limiting the employee status inquiry to the provisions of the unemployment insurance law.
D21-09 at 2. The actual proposed changes seem to do little more than re-arrange statutory wording, however. At present, current unemployment law prohibits consideration of licensing requirements or other state or federal law in determining employee status. So, there is a change in wording being proposed, but I cannot determine what substantively is being changed. The Department’s rationale seems to be that administrative law judges are over-turning initial determinations that held claimants to be employees (and so, concluding that the claimants truly were independent contractors) because those administrative law judges were looking to laws outside of unemployment law.
the appeal tribunal shall not take administrative notice of or admit into evidence documents granting operating authority or licenses, or any state or federal laws or federal regulations granting such authority or licenses.
So, the actual goal of this proposed change is unclear at the moment.
This proposals adds a provision — required by federal law — to prevent employers from re-organizing themselves and thereby reducing their tax rate significantly and restoring a positive account balance as a “new” employer — a practice called SUTA dumping.
SUTA dumping is a major problem that can easily “cost” thousands of dollars (and maybe even tens of thousands) per employer, especially when extended beyond one year. The proposed penalties are a $5,000 forfeiture, a possible $10,000 civil penalty, and possible criminal charges as a class A misdemeanor (up to 9 months in jail and up to a $10,000 fine).
So, these penalties are chump change and unlikely to discourage any employer but the smallest from SUTA dumping. A large employer who might save $70,000 or more in three years will not bat an eye at these proposed penalties.
Moreover, the penalties for claimant concealment are much more severe. Alongside the financial penalties that claimants incur for the claim-filing mistakes, per 2017 Wis. Act 147 the criminal penalties for claimant concealment are:
For benefits up to $2,500: An unclassified misdemeanor with a fine up to $10,000, imprisonment up to nine months, or both.
For benefits up to $5,000: A Class I felony, for which the penalty is a fine upto $10,000, imprisonment up to three years and six months, or both.
For benefits up to $10,000: A Class H felony, for which the penalty is a fine up to $10,000, imprisonment up to six years, or both.
For benefits over $10,000: A Class G felony, for which the penalty is a fine up to $25,000, imprisonment up to 10 years, or both
And, unlike claimant concealment, actual and specific intent to commit SUTA dumping needs to be proven. Proposed Wis. Stat. § 108.16(8)(mm)3 will read:
For the purposes of this paragraph and par. (m), “knowingly” means having actual knowledge of or acting with deliberate ignorance of or reckless disregard for the statute violated.
D21-10 at 3. Claimant “intent” for the purpose of unemployment concealment is shown for any claim-filing mistakes by the following factors:
a. Whether the claimant failed to read or follow instructions or other communications of the department related to a claim for benefits. b. Whether the claimant relied on the statements or representations of persons other than an employee of the department who is authorized to provide advice regarding the claimant’s claim for benefits. c. Whether the claimant has a limitation or disability and, if so, whether the claimant provided evidence to the department of that limitation or disability. d. The claimant’s unemployment insurance claims filing experience. e. Any instructions or previous determinations of concealment issued or provided to the claimant. f. Any other factor that may provide evidence of the claimant’s intent.
Wis. Stat. § 108.04(11)(g)2 (setting forth a claimant’s duty of care to provide accurate and complete responses to Department inquires).
These standards are hardly comparable. They should be. They need to be.
Work-share has been one of the few unemployment success stories in Wisconsin during this pandemic. In light of federal changes to work-share programs during the pandemic, this proposal seeks to expand work-share options and flexibility in light of those federal changes so that more employers and employees can take advantage of these benefits.
This proposal is a no-brainer and should have been adopted months ago.
The Department wants to hear about other changes needed to work-share efforts in Wisconsin. Other than a reduction in the complicated paperwork (a universal complaint for work-share), contact me with your suggestions. I will pass them on to the Advisory Council.
D21-12, Secretary waiver of provisions for the sake of funding flexibility
This proposal expands the general savings clause (the Department’s secretary can waive compliance with any specific state requirement should that state requirement be found to conflict with federal law) to also allow the Department secretary to waive requirements that prevent the state from taking full advantage of federal funding opportunities (like immediately waiving the waiting week when the pandemic struck, as the legislative delay costs Wisconsin employers’ millions of dollars).
D21-13, Initial tax rates for construction employers
Unemployment taxes have been declining so rapidly in Wisconsin that the initial tax rates for construction employers — one of the few booming industries from before and during the pandemic — are now lower than the initial rates of non-construction new employers.
D21-13 at 1. Because construction work is generally seasonal work, initial tax rates in construction should in theory be higher than for general, non-construction employers. The Department’s solution is to amend “the initial tax rate for construction employers to be the greater of the initial rate for non-construction employers or the average rate for construction industry employers as determined by the department on each computation date, rounded up to the next highest rate.” D21-13 at 2.
Until construction work no longer has seasonal layoffs because of winter, this proposal makes sense.
Current regulations, however, still prioritize in-person hearings over hearings by phone. In this proposal, the Department wants:
to amend chapter DWD 140 to provide that, while parties may continue to request in-person hearings, it is the hearing office’s discretion whether to grant that request. The Department also proposes to clarify language in DWD chapter 140 regarding hearing records, Department assistance for people with disabilities at hearings, and to correct minor and technical language in DWD chapter 140.
D21-14 at 2. As currently worded, the proposal simply justifies what the Department wants to do and provides no actual reasons or justification for these changes. For instance, the Department lacks space for in-person hearings because the Department previously closed three out of four hearing offices.
Even more troubling, the substances of the proposed changes is lacking. Wis. Admin. Code § DWD 140 is THE set of regulations for how hearings are conducted. Any changes to this chapter could have long-term repercussions to claimants and employers about what happens at unemployment hearings and their access to the hearing files connected to these cases.
When presenting this proposal, the Department indicated that the changes to DWD 140 are needed as well as to DWD 149 to reflect the Department’s current practices in responding to open records requests. So, it begs the question of what exactly is in conflict between these regulations and the Department’s current hearing practices. Wis. Admin. Code DWD 149.03 provides:
(1) Claimants and employing units. Except as otherwise provided under s. DWD 140.09, the department shall make the following records available to the following persons upon request:
(a) An unemployment insurance record concerning an individual is available to that individual.
(b) An unemployment insurance record concerning an individual’s work for an employing unit is available to that employing unit.
(c) An unemployment insurance record concerning a determination to which an employing unit is identified as a party of interest under s. 108.09, Stats., is available to that employing unit.
(d) An unemployment insurance record concerning an employing unit’s status or liability under ch. 108, Stats., is available to that employing unit.
In legal circles it is generally understood that phone hearings favor employers, as employer witnesses can gather in one room and share a set of notes during their testimony without an administrative law judge witnessing those notes being passed.
Finally, for comparison, here is a 1998 Department notice (from a 2000 training about unemployment hearings) about opting for a phone hearing. If the Department is going to go forward with this change, it should address these points it put forward in 1998 for why phone hearings are problematic.
Currently, summer camp counselors are generally ineligible to receive unemployment benefits because they are usually full-time students. But, summer camps must still pay unemployment taxes for the wages paid to summer camp counselor.
This proposal applies the federal definition of excluded employment for camp counselors to state law.
The result of this change is that summer camps will no longer pay unemployment taxes for the wages paid to their summer camp counselors. And, some summer camp counselors who are not students may lose the ability to include their summer camp wages in establishing a benefit year.
This proposal repeals the drug testing provisions the Walker administration kept trying to institute. Recall that the drug testing efforts came in three parts: (1) voluntary employer testing and reporting, (2) mandatory testing of claimants based on to-be-determined federally designated occupations for testing, and (3) mandatory testing of claimants based on a future, state-based list of designated occupations. Only the voluntary employer testing and reporting was ever implemented.
The big news here is that as of 31 March 2021, the Department has received 171 drug test reports (either a failed test or failing to take a test) from potential employers. Previously, the Department had reported none or just a couple of voluntary testing reports from employers. In any case, the impact of these 171 voluntary employer reports remains nil. “No claimants have been determined to be ineligible for UI benefits under the pre-employment drug testing statutes and rules and denied benefits because of the employers’ reports of a failed or refused drug test as a condition of an offer of employment.” D21-16 at 1. So, there has been no opportunity for claimants to maintain their eligibility by enrolling a drug treatment program at the state’s expense.
Because employers have no idea of whether a job applicant is receiving or not receiving unemployment benefits OR because employers are failing to provide the necessary drug-testing paperwork and follow the necessary protocols for reporting a drug test OR a combination of these two factors, the voluntary drug testing has been a complete bust. In more than five years, this effort has not led to a single disqualification or enrollment in a drug treatment program. Ending a program that is doing nothing should make sense.
D21-17, Repeal of the substantial fault disqualification
This proposal seeks to repeal the substantial fault disqualification. There are two issues with this proposal, however.
First, the Advisory Council previously rejected substantial fault when it was originally proposed. It was the Joint Finance Committee that went around the Advisory Council and which included substantial fault in the state budget. So, the Advisory Council does not need to approve of this repeal. It was already rejected, and the rejection should be included as a matter of course.
Second, court decisions in Operton v. LIRC, 2017 WI 46, and Easterling v. LIRC, 2017 WI App 18, have limited the scope of substantial fault in important ways from how the Department applies this disqualification. But, the Department continues to ignore those court precedents. Indeed, as of May 2021, I have come across two cases of employees disqualified for substantial fault because of unintentional mistakes where the mistakes in question are nearly identical to the mistakes in Operton (inadvertent job mistakes) and Easterling (unintentional mistakes while attempting to satisfy employer demands).
D21-18, Expansion of the relocating spouse quit exception
This proposal restores this quit exception to allow any claimant who has to quit a job because his or her spouse has to relocate. Prior to 2013, Wisconsin allowed claimants to receive unemployment benefits when they had to relocate because of a spouse transferring to another job for any reason. In proposal D12-19, the Department limited this quit exception to the spouses of military personnel who had to relocate.
So, this proposal restores the expansive nature of this quit exception.
The problem here, like with substantial fault, is that the Advisory Council previously rejected this Department proposal to limit this quit exception to the spouses of military personnel. Here is what the Advisory Council actually agreed to back in 2013. So, this proposed change should be included as a matter of course in the council’s agreed-upon bill.
The waiting week was enacted as part of the 2011 budget act, 2011 Wis. Act 32 and without any input from the Advisory Council.
The concept of a waiting week exists because state unemployment agencies originally could not act quickly on a claim for benefits, and so a waiting week was needed to give the state agency time to process the necessary paperwork. With the advent of claim-filing by phone, however, that additional time was no longer needed. The waiting week effectively became a vehicle for reducing the total amount of benefits paid out to a claimant, since claimants did not receive any unemployment benefits for the first week of their claim.
The Department estimates that the waiting week costs claimants $26.1 million each year. D21-19 at 3. Given the purpose of unemployment benefits to provide immediate economic stimulus to workers in time of need after losing their jobs, a waiting week makes no sense.
D21-20, Repeal of the lame duck work search and work registration changes
So, this proposal restores what existed before the lame duck changes and gives the Department some additional flexibility in how work search and work registration requirements are administered.
D21-21, Repeal of the wage cap on benefit eligibility
In light of Wisconsin’s partial wage formula, a claimant with a weekly benefit rate of $370 could in theory have as much as $574 in wages and still qualify for at least $5 in unemployment benefits. D21-21 at 1. In other words, the partial wage formula indicates that anyone with $575 or more in wages would NOT receive any unemployment benefits.
As a consequence, the $500 cutoff actually discourages some work, as any employee who receives $500 or more in wages loses all unemployment benefits. For instance, a person with a WBR of $370 who earns $550 in wages would receive $22 in unemployment benefits that week, if the $500 wage cap was eliminated.
In other states, the gap between earnings and unemployment eligibility is called an “earnings disregard.” In some of these states, a worker who earns just $200 in a week loses unemployment eligibility dollar for dollar, so the earnings disregard in those states is sizable. See Massachusetts, for example, in this table. Because of Wisconsin’s partial wage formula, the earnings disregard in Wisconsin is limited to this $500 wage cap and only applies for claimants receiving the highest weekly benefit rate.
So, at present this $500 wage cap has a very limited effect. But, should the weekly benefit even be increased, it will become a major problem. And, as indicated in the next proposal, Wisconsin now has the second-lowest weekly benefit rate in the mid-west. So, this artificial cap needs to go if Wisconsin is going to raise its weekly benefit rate.
Finally, as noted by the Department, D21-21 at 3, the eligibility ban when working 32 or more hours in a week remains in place.
Currently, Wisconsin has the second-lowest maximum weekly benefit rate in the mid-west.
State Max. WBR Max. w/ dependents
IL $484 $667
IN $390 $390
IA $481 $591
MI $362 $362
MN $740 $740
OH $480 $647
WI $370 $370
A listing of the weekly benefit for all the states is available here.
Note: this data is different from what the Department reports in its proposal, and these numbers are current as of October 2020. These numbers have changed since then. Ohio, for instance, currently has a maximum WBR of $498 and $672 with dependents.
The highest WBR available is in Massachusetts, at $823 ($1,234 with dependents). The second highest is in Washington state at $790.
This proposal sets forth a series of increases in the weekly benefit rate.
For benefits paid for weeks of unemployment beginning on or after January 2, 2022, but before January 1, 2023, the maximum weekly benefit is capped at $409.
For benefits paid for weeks of unemployment beginning on or after January 1, 2023, but before December 31, 2023, the maximum weekly benefit is capped at 50% of the state’s annual average weekly wages.
For benefits paid for weeks of unemployment beginning on or after December 31, 2023, the maximum weekly benefit is capped at 75% of the state’s annual average weekly wages, or the maximum weekly benefit amount from the previous year, whichever is greater.
Wisconsin’s weekly benefit rate relative to the wages being paid in this state has never been all that good and has become essentially a token reimbursement in the last few decades.
Using the average weekly Wisconsin wage of $951 in 2019, the maximum WBR in 2023 would be $475, and in 2024 the maximum WBR would be $713. So, this proposal would basically make the maximum weekly benefit rate actually useful and relevant again in Wisconsin.
D21-23, Expanded flexibility in searching for suitable work
Here, the Department proposes two changes. First, the Department wants to expand the canvassing period from six weeks to eleven weeks.
The canvassing period is the time when you can reject a job offer which is a lower grade of skill or at a significantly lower rate of pay (less than 75%) than you had on one or more recent jobs without losing your eligibility for benefits. SeeTips for filing for unemployment benefits in Wisconsin for more information about your canvassing period.
Second, the Department proposes expanding the trial time period for quitting a job without being disqualified from receiving unemployment benefits from 30 days to ten weeks (the original time period). The Advisory Council originally approved of the change from ten weeks to 30 days.
This trial time period provides various ways for an employee to still qualify for unemployment benefits when quitting a job regardless of the employee’s actual reason. The main reason found in this category usually is that the job fails to meet established labor market standards (e.g., wages are 25% or less than what is normally paid in that specific labor market for that occupation). But, any reason that would have allowed the employees to refuse the job offer in the first place as well as any reason for quitting the job with good cause applies here. Only the last reason — having good cause for quitting the job — is still available to employees after the trial period has expired.
D21-24, changing the SSDI eligibility ban to an offset
This proposal was previously discussed here, along with the entire history of the Department’s SSDI eligibility ban qua offset. Whether as an eligibility ban or an offset, it still makes no sense. There should be no SSDI offset, just like there should be no SSDI eligibility ban.
Here is hoping the Advisory Council can fix this crazy proposal and end this discrimination against the disabled.
At present, large employers (those with annual unemployment taxes of $10,000 or more) must e-file their reports and e-pay their unemployment taxes.
This proposal would mandate e-filing and e-pay for ALL employers.
The problem is that many one or two person LLCs and other self-employed individuals have no conception of unemployment taxes and the reports that need to be filed. Given the lack of broadband access in the state, this mandate for these small employers is likely difficult to impossible to implement.
Without a broad-based, educational media campaign, this mandatory e-filing will accomplish little more than allowing the Department to levy administrative penalties against small employers who have no idea what is going on and fail to provide their forms and payments via e-file and e-pay. The fact that implementation will be delayed until the Department actually has the technology in place to support this proposal offers little assurance. In short, this proposal should be rejected out-of-hand. After all, those who push for ease-of-use indicate that multiple kinds of access need to be maintained and fully supported. So, mandatory e-filing and e-pay actually runs counter to making unemploymeny more modern and easier-to-use.
This proposal seeks to replace the token employer penalties for mis-classifying construction workers (1) with penalties that at least some have some dentures to them and (2) to expand this issue to all industries rather than limiting it to just construction.
The Advisory Council at the urging of Mark Reihl, then the head of the carpenters’ union in Wisconsin (and now division director for unemployment) originally approved the original penalties proposed by the labor caucus.
$500 civil penalty for each employee who is misclassified, but not to exceed $7,500 per incident.
$1,000 criminal fine for each employee who is misclassified, subject to a maximum fine of $25,000 for each violation, but only if the employer has previously been assessed a civil penalty for misclassified workers.
$1,000 civil penalty for each individual coerced to adopt independent contractor status, up to $10,000 per calendar year.
D21-36 at 1.
With this proposal, the Department explains:
The proposal removes the $7,500 and $10,000 limitations on these penalties and provides that the penalties double for each act occurring after the date of the first determination of a violation. The proposal also removes the limitations on the types of employers to which the penalties apply, allowing them to be assessed against any type of employer that violates the above prohibitions.
D21-26 at 4.
BUT, the intent that needs to be shown for these mis-classification penalties remains unchanged. Per Wis. Stat. § 108.221(1)(b):
(b) The department shall consider the following nonexclusive factors in determining whether an employer described under par. (a) knowingly and intentionally provided false information to the department for the purpose of misclassifying or attempting to misclassify an individual who is an employee of the employer as a nonemployee:
1. Whether the employer was previously found to have misclassified an employee in the same or a substantially similar position. 2. Whether the employer was the subject of litigation or a governmental investigation relating to worker misclassification and the employer, as a result of that litigation or investigation, received an opinion or decision from a federal or state court or agency that the subject position or a substantially similar position should be classified as an employee.
Under this standard, it is well nigh impossible to charge an employer with mis-classification for a first-time violation. On the other hand, claimants are given no such leeway for their claim-filing mistakes. As noted above with proposal D21-10 (SUTA dumping), claimants who have filed for unemployment insurance previously and been given notice to read the claimants’ handbook are presumed to know everything about how to file an unemployment claim and to not make any claim-filing mistakes. But, here, employers are not liable for mis-classification (a far more serious problem economically) until after their first instance of mis-classification. In other words, these mis-classification penalties can only apply to employers when prosecuted a second time for the same mis-classification. Having two bites of the apple sure is nice.
Either employers should be held to the same claim-filing standards as employees, or the intent requirements used against employees for their claim-filing mistakes needs to be seriously redone.
The Department has new videos about worker mis-classification — mistakenly employing someone as an independent contractor rather than as an employee for unemployment purposes.
The original mis-classfication website is still available and very much worth checking out by employers and employees to see whether someone really is an employee under the various tests for workers’ compensation, labor standards, unemployment, and discrimination law.
For a gander at legal strategy employers should consider, especially when the independent contractor issue is being litigated in an employee benefits hearing (as opposed to an employer tax hearing), see this prior post.
The official Advisory Council/DWD bill has just been introduced, AB819. So, here is a rundown of what has been happening with unemployment law over the last several months, organized by proposal.
Department Proposals
A second SSDI prohibition, D15-01, to replace the current prohibition was approved in April 2015 and back-dated in May 2015. But, after the Department started winning the court cases challenging the old SSDI prohibition (see this post for the details), this proposal disappeared from the Department’s legislative draft at the council’s September 2015 meeting. But, after the Labor and Industry Review Commission ruled in November 2015 that departmental error had occurred when appeal tribunals (but not the Commission) had originally ruled in favor of claimants regarding dual receipt of SSDI and UI benefits (and so no repayment of UI benefits previously received was proper), this proposal re-emerged at the November 2015 council meeting in the Department’s legislative drafts and is now part of AB819. Why? This second SSDI prohibition is back-dated to January 2014, the effective date of the original SSDI prohibition.
D15-02 is a house-keeping change that allows the Department to issue determinations against out-of-state employers in combined wage claims for being at fault for an erroneous benefit payment to a claimant. This proposal is part of AB416 and has been enacted in 2015 Wisconsin Act 86.
D15-03 applies the Treasury offset program to employers, as described previously in this post. This proposal is part of AB416 and has been enacted in 2015 Wisconsin Act 86. Because of this quick enactment, employers will be subject to treasury offsets for their 2015 tax returns for any unemployment taxes for which they have been found individually liable.
D15-04 sets up essentially a backup insurance program for reimbursable employers who get their unemployment accounts swindled by identity fraud (and so have little to no hope of ever recovering the stolen benefits). The final recommendation from the council was for reimbursable employers to be taxed initially in order to create a fund of $1 million for covering themselves against identity fraud, essentially the second option of the three presented. This proposal is part of AB819.
D15-05 corrects a hole in the statutes that accidentally left LLPs out of the definition of employer (see also this DWD memo on this issue). This proposal is part of AB819.
The Advisory Council approved the Department’s appeals modernization proposal, D15-06, at the 7 January 2016 meeting. LRB draft language was prepped soon thereafter. Perhaps the most significant change in this proposal — notice by Internet in place of postal mail — has NOT received any discussion of comment from council members, however. This proposal is now part of AB819.
Proposed changes to the definition of claimant concealment in D15-08 (described in this previous post and described in a Department memo (discussed in this post) are part of AB819. Additional criminal penalties for concealment in AB533 continue to advance in the legislature. To see what all the fuss is about, take a look at this January 21st Assembly Committee on Public Benefit Reform hearing regarding AB533 and other UI bills or read this LIRC memo on the proposed concealment changes.
Technical changes in D15-09 and included in AB819 will allow the Department to distinguish able and available determinations from separation determinations.
D15-10 eliminates the publication of the claimant benefit tables within the statutes and is included in AB819.
Major changes to the process for getting unemployment decisions reviewed in circuit court, set forth in D15-11, are part of AB819. These changes were previously described here and here.
D15-12 allows the same protocols for unemployment taxes in regards to fiscal agents in adult care to apply to fiscal agents in child care situations. This proposal is part of AB819.
D15-13 ends the sunset date in 2034 for the program integrity fund (i.e., the fund for receiving some of the monies from concealment enforcement) since the Department now expects concealment monies to continue in perpetuity. See the next two proposals for why.
Labor and Management Proposals At the Advisory Council’s 19 January 2016 meeting, the council took action on various management and labor proposals and the agreed-to changes have been incorporated in AB819.
During the first six weeks of a job search, suitable work that a claimant MUST accept will be those jobs that (1) do not have a lower grade of skill than one or more of his or her most recent jobs and (2) have had an hourly wage that is 75 percent or more of what the claimant previously earned in his or her most recent, highest paying job.
After the first six weeks, suitable work means any work the claimant is capable of performing regardless of prior experience, skills, or training, as long as the wages for that job are above the lowest quartile wage-level in the claimant’s relevant labor market.
Once a job offer is considered suitable work for a claimant, then the claimant only has good cause for declining the job offer if the claimant’s personal safety is at risk, the claimant’s sincerely held religious beliefs conflict with the work, the work entails an unreasonable commuting distance, or some other compelling reason makes accepting the offer unreasonable. These changes to what will be considered suitable work will also apply to those who tentatively accept a job and then quit within the first thirty days.
In addition, this accepted management proposal will either eliminate unemployment eligibility entirely for anyone receiving temporary or partial workers’ compensation benefits or mandate offsets against UI benefits for those receiving these kind of workers’ compensation benefits (the specific type of workers’ compensation benefit being received leads to the different kinds of treatment). In other words, the SSDI prohibition is being expanded to workers’ compensation benefits. Also, anyone making a mistake in how they report their specific workers’ compensation benefits will, under the new on-line filing system, likely face a concealment charge for his or her mistake in reporting the kind of workers’ compensation benefits he or she is receiving.
These management-sponsored changes will take effect four weeks after enactment.
repealing the mis-classification prohibitions in workers’ compensation and fair employment law,
creating an administrative penalty for mis-classification for unemployment purposes of $500 per employee (capped at $7,500) when construction employers (and only construction employers) knowingly and intentionally provide false information to the Department (NOTE: compare this definition with the proposed changes to claimant concealment) for the purpose of misclassifying or attempting to mis-classify an employee,
fining employers in painting and sheetrock work $1,000 per incident (capped at $10,000 per calendar year) when coercing employees into accepting non-employee status for unemployment purposes, and
fining construction employers $1,000 per employee (with a maximum of $25,000) for subsequent violations as well as possible referral for criminal prosecution.
These mis-classification changes will take effect six months after passage.
Budget Bill Fixes The LIRC funding fix bill, discussed here, is also right now being considered by the legislature.
The call in the budget bill for the Department to create suitable work rules for claimants has been eliminated by the management-sponsored changes to suitable work described above.
Update (12 June 2021): Fixed broken DWD links to labor proposals and management proposals that the Advisory Council agreed to.
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. Seemy own comments on the proposed regulations.
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.
Back in June 2013, there was a post about independent contractors issues in Wisconsin unemployment law. The brief included in that post went through the various factors used in determining independent contractor status for unemployment purposes as well as why that status is at issue in two separate proceedings — one proceeding to determine the claimant’s eligibility for benefits and another proceeding to determine whether the employer is responsibile for paying unemployment taxes for that claimant.
LIRC issued a decision in that case in August. In regards to the factors, there are two points of disagreement. First, the brief used the old office test. Under the current office test, this factor is satisfied “if the individual uses his own equipment and materials in performing the services, and either maintains his own office or performs most of his services in a location he chooses” (see p.11 of the LIRC decision). The old test described in the brief is only applicable in the following circumstances (see n.7 at p.11 of the LIRC decision):
If an individual does not choose where to perform his services, it must be determined whether he maintains his own office. In such a case, the analysis would proceed utilizing the longstanding interpretation that the term “office” has received in cases involving condition 3 in the pre-2011 law, albeit without reference to a “separate business.”
Second, LIRC disagrees with the position in the brief that graphic layout work is not the same as translation work. In this case, the claimant has done translation work in the past but had not done translation work which also required him to do graphic layout of the translation using certain software in order to prep the document for final publication. LIRC lumped the graphic layout work as similar to the prior translation work.
Despite these differences, a finding of employee status was still an easy call.
Since this decision, LIRC has issued another interesting independent contractor decision involving a freelance for Madison’s major newspapers. In the Martin v. Madison Newspapers, Inc., Hearing No. 13001922MD (10 October 2013) decision, LIRC offers another extensive overview of how to apply independent contractor factors for unemployment purposes.
These two situations reinforce the notion put forward in the brief that employers who hope to avoid unemployment taxes need to think strategically in these kinds of cases and perhaps not contest an employee eligibility determination pursuant to Wis. Stat. § 108.09, especially since the matter of employer tax liability will be determined in a separate proceeding under Wis. Stat. § 108.10.
Notwithstanding the difficult burden employers have in initially establishing the factors specified in sub-section (bm), employers are also faced with the added difficulty in these matters that much of the information needed in regards to these factors is in the hands of claimants and not employers. While employees and employers are in theory opposed to each other in these unemployment cases, they also depend on each other to bring forth evidence that the other side needs in order to succeed in its claims. Employers, after all, likely do not have any direct knowledge about how individual claimants qua independent contractors market their services to others, account for their business expenses and income, manage their own place of business, obtain their own liability insurance, pay for their recurring operational costs, and how many other clients they might or might not have. As a result, employers who actually hope to avoid payment of unemployment taxes for the services at issue are dependent on the claimant’s cooperation in the Wis. Stat. § 108.10 proceeding to determine whether the claimant is an employee or independent contractor.
Keep in mind as well that good guidance from DWD on independent contractor issues is available at this website. Here, you can explore the factors pursuant to the various tests in unemployment law, workers’ compensation, wage law, and equal rights law whether an individual qualifies as an independent contractor or employee.
Here is a brief I will be using for training purposes for the unemployment clinic here in Madison. It runs through the basic issues relating to deciding whether a claimant is an employee or an independent contractor. The test is still extremely difficult to meet.
Moreover, the case registers basic procedural and substantive problems with how independent contractor cases are currently handled in Wisconsin. Simply put, Wisconsin unemployment law leads to duplicate and unnecessary proceedings in regards to independent contractor determinations for both employees and employers in ways that are frustrating for both. While much is at present being changed in unemployment law in Wisconsin, real problems that the businesses and residents of Wisconsin have in regards to independent contractor issues and the ensuing long, complicated, and often unnecessary hearings over these issues are not even being mentioned.
In the case at issue in the brief, there was little at stake for either party, but four hours of hearings and now a LIRC appeal has taken place.
In this situation, both the claimant and the employer are probably justified in disputing how independent contractor law in unemployment cases are handled. The claimant in this matter has had to deal with DWD investigations not only for the $500 at issue in this case but $200 earned from serving in a chorus in a show. The employer is stuck with any of its freelancers being subject to UI taxes and an intrusive DWD examining all of its employees.
Until this portion of UI law changes once again, there are ways for making these kinds of cases a little less problematic and burdensome for all involved. What the attached brief does in part is demonstrate the circumstances and issues that employers and employees need to be aware of before simply fighting each other.
Wisconsin Unemployment 