On-line only claims

The Department has announced that effective 24 May 2017, the on-line claims-filing process will be required for claimants.

The Department is also providing some additional information about work search requirements for laid off workers. There are no actual legal changes here, but the Department is providing one-stop access to employers and employees about the forms needed for getting work searches waived for eight weeks and then another four weeks.

The small print for the on-line only announcement, however, indicates that the phone system will still be available until some future unknown date. Since the on-line system is still English-only, federal requirements for ensuring access indicate that limiting access to an English-only on-line system could be a major problem.

Methods of Providing Access. For languages spoken by a significant number or proportion of the eligible service population, individuals should be able to learn about, apply for, and maintain eligibility in the relevant language(s) for every program delivery avenue (i.e., online, in person, and/or phone). The state agency should also ensure it has reasonable methods in place for identifying and reaching other LEP individuals who speak a language that is not spoken by a significant number or proportion of the eligible service population. As state UI agencies move to almost exclusively website-driven services, there is an increased likelihood that LEP individuals will face barriers to accessing information and claims-related access in violation of Title VI and regulations promulgated by WIA, as amended, and WIOA, and as described above.

UIPL No. 02-16, State Responsibilities for Ensuring Access to Unemployment Insurance Benefits at 8. So, claimants should continue to use the phone system, especially when the on-line system can be used to entrap claimants into concealment for nothing more than a claim-filing mistake.

Initial warning screen

Job posts scams to watch out for

Ars Technica reports how scam artists are starting to skim personal info from job-posting sites and then offer fake jobs to folks in order to get away with criminal activities. As noted in the article, this kind of scam is particularly dangerous for job-seekers:

The “job offer” was clearly part of a reshipping scam — an arrangement used frequently by credit card fraudsters and identity thieves to get goods purchased online forwarded by an unwitting third party, frequently to an overseas address. The criminals use the “personal assistant’s” personal information to deliver fraudulently purchased goods; when the fraud is tracked down, the “personal assistant” is the one the police come to visit.

So, job seekers need to make sure that any offers arriving via e-mail message or phone call come from legitimate sources. Always make sure that the employer information can be independently verified. When many companies are on-line only entities, this verification is especially important.

Unemployment is going away

The March 2nd edition of the Isthmus has an excellent cover story about unemployment changes the past few years. Make sure to read it.

The Department’s press release that same day provides some additional insight into what is going on with unemployment in this state.

Two issues arising from these news items deserve additional comment.

First, the response from the Department in the Isthmus story indicates that this expansion of concealment to include mistakes is intended.

Now, honest mistakes can lead to fines and criminal charges, Forberger says.

Tyler Tichenor, a DWD spokesperson, counters that the change was made “to make the definition clearer for claimants so they could better understand what they need to do to file a claim accurately.”

John Dipko, another department spokesperson, says the state is making a concerted effort to crack down on fraud and that referrals for prosecution began increasing even before the definition change.

“The number of referrals have gone up,” Dipko says. “We’ve been much more aggressive in referring the most egregious cases of fraud for consideration for possible prosecution.”

The change Mr. Tichenor is referring to is the 2015 change in the statutory definition of concealment. He is NOT referring to providing simpler explanations of unemployment issues for claimants or making the filing process easier to follow. No claimant (or employer for that matter) should be expected to review a legal statute simply to make sure he or she is doing what the Department wants him or her to do. Such a policy is akin to the IRS making everyone read the Internal Revenue Code when filing their taxes. Yes, the statutes govern. But, the agency responsible for carrying out those statutes has a duty to explain those statutory requirements as simply as possible and in a way that is not intended to confuse and trip folks up.

But, confusion and mistakes are the whole point of unemployment concealment now. For instance, the on-line filing process is now more complex, not less, with numerous requirements for which any single mistake can now lead to a charge of unemployment concealment.

And, this concealment push cannot be under-stated. When filing on-line, the first thing a claimant sees, even before he or she creates a user-id and a password, is this screen:

UI claim initial screen

Notice the specific language being used here — “If you make a mistake or forget to report a material fact related to your claim . . . ” The Department is officially declaring here that a simple mistake or even forgetfulness can be the basis for a concealment charge.

Second, the Department’s press release about record-low unemployment claims and a sudden rise in employees’ wages indicate how significant the Department’s changes in unemployment have been.

Four issues in the Department press release on March 2nd highlight the changes being wrought by the Department. First, the Department reveals that September 2015 to September 2016 job growth in Wisconsin was 29,486 total jobs and 25,608 private-sector jobs. When compared to prior job growth numbers, this trend indicates that job growth is actually slowing in Wisconsin — 37,432 jobs from March 2015 to March 2016 and 39,652 jobs from March 2015 to March 2015.

In light of the Department’s push for charging claimants with concealment for their honest mistakes and the loss of work search waivers during the winter months for seasonal employees, three other points from the press release suggest what is actually going on.

  • Quarterly wages by covered private-sector employers grew by 7 percent year over year. Total wages grew by 7.5 percent over the year.

  • Initial UI claims ended 2016 at their lowest level since 1988. Continuing unemployment claims ended 2016 at their lowest level since 1973.
  • More people were employed last year in Wisconsin (November 2016) than at any point in our state’s history.

As indicated here, the number of people working in Wisconsin is at a record high level. (NOTE: this statistic could also be — and likely is as noted below — because the number of people in the state remains relatively flat.) This increase in working folk should indicate that Wisconsin has a “hot” job market. Employees would then have increased bargaining power and be willing to switch jobs when employers are less than fair or better opportunities appear to be available with other employers. Such a “hot” job market would suggest that unemployment claims would rise somewhat because of individuals trying out new jobs that do not work out or which prove to be less than hospitable. But, initial unemployment claims are at record lows. So, folks either are NOT leaving jobs at all or are NOT filing claims for unemployment benefits when job separations do happen (because of the Department’s concealment push). Finally, the fact that wages have jumped over 7% in one year without a “hot” labor market indicates that employers are voluntarily raising wages for the employees they already have even though labor turnover (signified by the record low number of claims being filed) is markedly down.

As indicated in the Isthmus cover story, employers this past winter were faced with employees who no longer had seasonal job search waivers when claiming unemployment benefits and so had to do four job searches a week along with all the other job search requirements the Department has enacted the past two years. Those employees are essentially making themselves available to be poached by other employers, and so the Department has created a competition for employees among employers where none existed before.

If employees were little more than replaceable cogs, this increased competition would still not lead to higher wages. But, for skilled work where employees are not interchangeable, employers need to keep their skilled labor because of the high replacement costs that arise when those skilled employees leave.

To avoid this whole government-created poaching regime, employers’ only real option is to keep their employees off of unemployment by “hiring” and paying them during winter months despite the lack of actual work available for these employees. In other words, some employers have found themselves handing out winter make-do work to keep their employees off of unemployment. With full wages (or even partial wages), these employees are doing financially much better than when they just received unemployment benefits that max out at $370 a week.

NOTE: as this COWS report indicates, the wage growth at issue here is a very recent development. In January 2017, the story in Wisconsin was the flat wage growth in this state.

Finally, this lack of unemployment benefits is affecting everyone — employers and employees — when the record low in continuing claims is considered. This statistic indicates that even when employees file a claim for unemployment benefits, that claim is stopped shortly thereafter because they are either denied benefits because of substantial fault or misconduct or because they fail to meet some new job registration requirement that Department has enacted. With no unemployment benefits available, the unemployed are out searching for jobs or they are leaving this state for greener pastures where jobs and unemployment benefits are available. The state’s relatively flat population growth the last few years — a 0.6% growth rate in 2010 is 0.2% in 2016 — bears this point out. Because of the Department’s drastic changes to unemployment, the state is certainly not becoming business friendly for most employers.

Job search problems continue

At the 13 April 2016 Advisory Council meeting, the Council received two letters from state residents concerning the limitations on work search waivers that took effect this past winter.

The first, a 31 March 2016 e-mail message (originally sent to Sen. Harsdorf), explained:

Hi: I work for a concrete company that lays people off in early winter. I have been there for 10 years and have been laid off every winter since I started. Some winters I’m off longer than others, it just depends on different factors. This year (Dec 18th) I was laid off and longer than other winters, so that brings up the issue.

So with the new regulations in the unemployment I/we are suppose to look for work after 12 weeks. My employer does not like to loose workers (Drivers) because with my companies requirements it’s kind of hard to find drivers without accidents and DWIs and enough experience.

What I am trying to say is,there should be some stipulations put into place for (work search after 12 weeks) I’m on my 12th day over the 12 weeks. I was just informed Tuesday that I’m finally going back this next Monday the 4th. It was up in the air for the last few weeks, due to road restrictions and lack of business. Then to add insult to injury I find out my work truck is in the shop ((due to other drivers using it while on lay off)) and wouldn’t be road worthy for another week.

I did not do the job service thing and in turn I’m going to loose $1110. I was suppose to sign up with [DWD] and start applying @ 4 places a week. I did not do this because, If I was offered a different job I would probably have to turn it down, and I will explain why. I worked a job back in 1995 to 2002 and I left for more $ and I ended up making less than the other job. I should have made $500–$600 more a month but it didn’t work out that way. Hence the phrase (the grass isn’t always greener on the other side of the fence) Since I have good benefits and wages with this job, I plan on staying for quite a while. So as far as the [job search requirements and work search waivers], there should be some changes made. I hope that I made sense… Please reply Thank You.

The second was a letter to the Council received on 28 March 2016:

Unemployment Insurance Advisory Council

I write this letter to each and every one of you, with hope it may do some good for the future beneficiaries, herself included.

My opinion; Whoever wrote and voted for this bill must be brain-dead, or forgot the reason for U.I. Without U.I. there would be many thousands of people on welfare. Do the math, which would be the most inexpensive way to go for the State and the U.S.government?

About me!

In my younger years I had a construction business in the Twin Cities area I struggled for years to build it into a profitable business. Than a recession hit. I was forced to sell. I began a new career with Glastron boat co. and later with Bombardier. Again, another recession. Bombardier closed all its facilities in the U.S. and again I was out of work. I than moved here to northwestern Wisconsin and started a new career with Burnett county Hiway dept. I worked there for 22 years. One day going home from work a lady ran over me on my motorcycle. It took two years to recover and of course I lost my job, as I didnt have enough sick leave to cover two years. I took an early retirement receiving only a small percentage of retirement income I had hoped for. When I was able I tried farming but that was a disaster, with prices what they are.

For the past two years I have worked for a dirt contractor as a dump truck driver. Last year they had there worst year in a decade, so my time was cut in half. My income from them was just over $6000. I filled for bankruptcy in 2015, something I will never get over. Through all of this I can’t recall ever drawing U.I. except for last year and this year. I must have a boatload of money paid on my behalf but yet I only draw $125 a week and have to jump your rope to even get that. Something is drastically wrong here. Its no wonder Donald Trump is so far ahead in the polls. WE NEED A CHANGE, A BIG CHANGE.

Let me tell you how this bill effects me and thousands just like me

I don’t have a computer and don’t even know how to operate one. My nearest job center is 42 miles away. I have signed up with them as requested, that is I think I have. I have had no confirmation of that. I have contacted employers within a reasonable distance. No response as of yet. I have to wonder what they will say when I tell them I have a job?

This, to me, seems like effort and money I don’t have down the drain, too accomplish nothing. Nothing fraudulent here:

I am CONFUSED and ANGRY

P.S. Maybe you should take off your high heels and come here for a couple of days. See how we live!

Notice that in both of these letters neither person has actually received all the unemployment benefits due them because of issues relating to registration at the job center of Wisconsin website, searching for jobs that likely pay less or have fewer benefits than their seasonal laid-off position, or jumping through hoops without feedback about which Department requirements are successfully completed.

In response to these letters, Janell Knutson explained to Council members that the writers of these letters were not asking for any specific changes and so she was just forwarding their concerns to the Council. Council members asked that she write the authors to let them know that the Advisory Council had received their letters.

Update on UI legislation

Advisory Council Bill AB819
Yesterday, the state senate passed the bill and messaged it to Governor Walker for his signature. This law consists of the following 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. Why? This second SSDI prohibition is back-dated to January 2014, the effective date of the original SSDI prohibition.
  • 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.
  • 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).
  • 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.
  • Proposed changes to the definition of claimant concealment in D15-08 are described in this previous post and described in a Department memo (discussed in this post), Additional criminal penalties for concealment in AB533 passed the Assembly but has yet to be passed by the Senate. 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. You can see and hear testimony against these concealment changes via this previous post.
  • Technical changes in D15-09 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.
  • Major changes to the process for getting unemployment decisions reviewed in circuit court are set forth in D15-11. These changes were previously described here and here. The Labor and Industry Review Commission opposed these changes, which essentially reverses the 2016 Appeals Court decision in DWD v. LIRC.
  • 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.
  • 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.
  • The Department’s proposals for a program integrity slush fund, D15-14 and D15-15.

Labor and Management Proposals
The Advisory Council bill also includes management and labor proposals.

On the management side, there will be significant changes to what will be considered suitable work:

  • 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.

The labor proposals that the council agreed to include:

  • 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 employees in painting and sheetrock work $1,000 per incident (capped at $10,000 per calendar year) when coerced 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, was enacted as 2015 Wisconsin Act 194.

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.

Other unemployment-related legislation
A bill to address an NLRB decision about frachisors and franchisees was signed into law as 2015 Wisconsin Act 203. I previously noted that:

unemployment is not mentioned once in the [Browning-Ferris Industries decision this law is intended to undo], 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.

A re-writing of real estate agent law in Wisconsin has been enacted via 2015 Wisconsin Act 258. The original bill, AB456, was intended, in part, to remove real estate agents completely from unemployment coverage. Even though real estate services are not considered covered employment for unemployment purposes, agents who qualify for unemployment benefits through other work they do outside of real estate sales found themselves and their brokerages being brought into unemployment hearings whenever there was a change in their relationship. In short, even though there is no covered employment or even an employer, the real estate agent is still treated as an employee who must either quit with good cause or be discharged without misconduct or substantial fault from a brokerage firm in order to keep receiving unemployment benefits connected to non-real estate work. The legislation as-passed leaves this process in place. Real estate agents, however, will be excluded as employees from workers compensation coverage, workplace discrimination law, and other workplace laws. See Section 174 of the new Act.

Previously enacted legislation
2015 Wisconsin Act 86 contained the following three Department proposals:

  • 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.
  • D15-03 applies the Treasury offset program to employers, as described previously in this post.
  • A renewed work-share program, D15-07.

Work search waivers: current limits to remain in place

Back in December 2015, legislators voiced concerns about the limitations to an 8 or 12 week maximum on work search waivers that went into effect this winter and wanted a return to the old waivers that lasted the winter season.

A senate bill to return work search waivers to the old, season long length has been proposed. Unfortunately, this senate bill was introduced just as the assembly was wrapping up its business for the year. So, even if the senate passes this bill, the only way for the assembly to pass it as well is if a special session is called to return assembly members to Madison to pass this bill. Such action is unlikely.

So, expect the 8 and 12 week maximums on work search waivers to continue into next winter as well.

Large state UI programs unprepared for next recession

Rick McHugh of NELP offers the following observations about unemployment legislation in other states:

Ben Casselman of the 538 blog has a new posting on the current state of UI programs. . The main focus of the blog is on the fact that several large states’ trust funds have not recovered from the Great Recession and they are unprepared for the next recession.

Rather than raising taxable wage bases and taking other responsible financing steps, the result of trust fund insolvency has been restrictive state legislation in some states mainly during the 2010-2013 time period. Eight states (AR,FL,GA,KS,MI,MO,NC,SC) have cut the maximum number of available weeks of UI to less than the traditional 26 weeks—and Ohio is considering joining this club. An Ohio bill cutting maximum durations to a sliding scale ranging from 12 to 20 weeks, depending upon the state’s unemployment rate, is advancing in the Ohio House of Representatives. The bill contains many other restrictive eligibility measures, and is modeled upon 2013 North Carolina legislation. It is estimated by the Ohio Legislative Service Commission to reduce benefits by $475 million a year.

One change from the North Carolina pattern is that Ohio employers would see UI payroll taxes fall under the Ohio bill, something that places the entire burden for improving Ohio’s trust fund on its jobless workers. Even North Carolina was not this one-sided in its approach to UI retrenchment. Policy Matters Ohio’s concerns about HB 394 are expressed in testimony by Zach Schiller and Hannah Halbert here and here. Many newspapers in Ohio have expressed concerns about the Ohio bill’s approach, and while momentum has slowed since the bill’s introduction in November 2015, the outcome remains uncertain.

States cutting the available weeks of benefits attempt to justify these changes by claiming that paying fewer weeks of benefit will induce a more rapid return to work by jobseekers. According to a recent Economic Policy Institute Snapshot by Will Kimball, three states cutting UI benefits the most (FL,GA,NC) by adopting a sliding scale approach similar to the Ohio proposal, have not seen their prime age (25 to 54 years of age) employment to population ratios increase. If the rationale for cutting weeks was true, jobless workers would return in greater numbers to employment. What appears to be happening to a more significant extent is that, without support from UI benefits, more jobless workers are dropping out of the labor force in those states.

These initial findings by EPI are consistent with many studies reviewed in NELP’s latest edition of our UI Toolkit. Specifically, one section of the toolkit presents recent studies that show that some economists’ preoccupation with disincentive effects of UI benefits has not been reflected in the behavior of jobless workers during the recession. In addition, the toolkit discusses other reports that show that UI claimants in fact do, in fact, look for work while on UI and that UI benefits keep individuals in the labor market and support better job matching. While sometimes facts don’t matter in contemporary policy debates, the tide of recent perspectives is now running against traditional economists’ strong moral hazard concerns about UI claimants.

Note that Wisconsin has through substantial fault and concealment, already seen a remarkable decline in its benefit levels.