Unemployment legislation that failed to pass in Wisconsin

The state legislature has been pushing a host of unemployment reforms that actually make unemployment worse or provide little more than a talking point. See, e.g., Replacing unemployment with reemployment or Carrots or Sticks? Lawmakers can’t agree on how to help employers who can’t fill jobs.

The things that might make unemployment better, however, were almost universally ignored. Thanks to the Legislative Reference Bureau and its legislative tracking services, here are most of the bills that have now “died” in this legislative session.

• AJR149 and AJR24: Relating to: declaration of an Economic Justice Bill of Rights.
• SB547 and AB542: Relating to: eligibility for unemployment insurance benefits in the case of an unwillingness to receive a vaccine. See also No vaccine unemployment bill introduced for issues much more pressing than vaccine refusals.
• AB1128 and SB1053: Relating to: new enforcement mechanisms and penalties for misclassifcation of employees as independent contractors.
• AB294: Relating to: recovery of unemployment insurance benefit over-payments. This legislation would have applied an equity and good conscience standard to determine if a claimant could afford to repay overpaid unemployment benefits.
• AB380: Relating to: mandating the return of job search requirements for unemployment insurance and the suspension of the Department’s emergency job search waiver rule. Unnecessary in light of Job Searches are back.
• AB307: Relating to: unemployment insurance work-share programs. Work share was one of the few unemployment programs that Wisconsin did relatively well, and so failure to make some of the pandemic-related changes permanent is a major failure.
• AB268 and SB267: Relating to: providing a temporary state tax exemption for unemployment compensation for 2020 and 2021 state income taxes. Because far too many claimants were not paid until 2021 or are still waiting in 2022 for unemployment benefits dating from 2020, this income tax problem is becoming a major headache. The only relief available to claimants is at the federal level and only applies to those paid unemployment benefits in 2020. See Tax matters.
• AB206 and SB224: Relating to: extending waiver of the unemployment insurance one-week waiting period to Sept. 5, 2021, to take advantage of federal financing of these benefits for employers.
• SB138: Relating to: extending eligibility for federal extended unemployment benefits in Wisconsin.
• SB140: Relating to: creating a presumption that all initial claims are pandemic-related for the purposes of charging relief so as to provide tax relief for employers.
• SB899: Relating to: various changes proposed by the Department to the unemployment insurance law and making an appropriation. See the discussion of Proposals D21-02 and D21-03 at Department proposals, 2021 edition, and going back to 2019. Note: the rest of the Department’s proposals, contained in AB910, were passed by the legislature. For the questions that remain unanswered regarding these proposals, see D21-01 and D21-04 to D21-08 discussed in Department proposals, 2021 edition, and going back to 2019, a veto of AB910 should be forthcoming. These proposed changes are more “stick” than “carrot.”

Replacing unemployment with reemployment

Rep. Petryk, Rep. Penterman, and Sen. Roth have proposed a major revamp of unemployment support that would re-make the Department of Workforce Development into a government-sponsored job coach that would, presumably, guide claimants to new jobs.

In place of a free labor market, where claimants get to make their own decisions about which jobs to apply to and how to go about searching for work, these politicians want to mandate government involvement and even control of claimants’ job search efforts. Here is what they propose.

• The Department must provide claimants with four potential job opportunities, one or more of which could be a temporary help company. Claimants who do not apply for work with that temp company are likely to lose their eligibility for unemployment benefits.
• RESEA training will be mandatory for all claimants. This requirement is already understood as required by the Department, but this proposal removes any discretion and makes attending a job search training seminar mandatory for all claimants who seem likely to exhaust their eligibility.
• That drug testing for claimants must be implemented by the Department. As previously noted, this drug testing would require the Department to provide drug treatment counseling as well for those who test positive or fail to appear for a drug test.
• As of a claimant’s second weekly certification, claimants must have a resume on the Job Center of Wisconsin website. This requirement already exists for every claimant’s benefit year, however, per the job registration requirement. See Laura Hoffman, UI Hearing No.17002961MW (16 Nov. 2017) (claimant must complete job registration requirement within 14 days of initiating a claim for unemployment benefits). So, this proposal is nothing more than shortening the requirement to seven days.
• Starting with the third week claimed, two of a claimant’s four job searches must be job applications or job interviews.
• When there are three weeks of unemployment benefits left in a claimant’s benefit year, the claimant must attend a reemployment counseling session with a Department staffer.
• The Department must compile reports regarding claimants’ job experience for the three years after the claimant first receives unemployment benefits. This part of the proposal is likely to run afoul of federal claimant confidentiality requirements. To the extent that this request reflects general job experience and claimant experience broken down by county or region, there is nothing preventing such a general report from being prepared by the Department right now.

As the sponsors of this proposal explain in their introductory memo about the changes they propose:

* Requiring the Department of Workforce Development to engage in universal workforce assessments and reemployment services by providing individuals early access to customized workforce services to get them access to employment services at the start of the UI claim.

o This means claimants will receive an online career readiness assessment when starting their claim to identify their career skills and talents.

o DWD will then use this information to develop a personalized employment plan for the individual.

o Require the claimant to participate in services to help complete their employment plan, like resume writing workshops, soft-skills training, and employment workshops.

Perhaps the most odious change being proposed is to add the following language in a proposed Wis. Stat. § 108.01(2m) as a fundamental goal of unemployment benefits:

The Social Security Act requires that, in order for an individual to be eligible for reemployment assistance benefits, the individual must be able to work, available to work, and actively seeking work. The reemployment assistance program in Wisconsin should enact and focus on policies that complement individuals’ efforts to find employment.

There has been a great deal of litigation in other states who ended their PUC and PUA and PEUC benefits prematurely under the pretense that these programs kept the unemployed from finding jobs. Litigation has been lost in some of those states that had a reemployment provision similar to the one being proposed here. Courts found that reemployment, rather than financial support after a job loss, meant that states had to end these programs prematurely. So, this proposal in essence is to make it easier for a state to end future federal emergency benefits under the guise of reemployment.

Note: To reinforce the importance of reemployment over unemployment, the majority of the proposed bill is concerned with changing the name of unemployment to reemployment.

The only helpful change in this proposal is to expand the earnings disregard to $30 or 40% of a claimant’s weekly benefit rate, whichever is greater, for calculating a claimant’s partial benefit. For example, a claimant with a weekly benefit rate of $250 would have an earnings disregard $100 rather than the current $30. So, weekly earnings of $90 would mean the claimant would keep all $250 in unemployment benefits that week, and weekly earnings of $400 would mean the claimant would still receive $49 in unemployment benefits that week. Unfortunately, this proposal keeps the $500 wage cap in place, so a claimant still loses all eligibility when earnings wages of $500 or more.

Note: The proposal also includes bonuses to employers for hiring long term unemployed workers. Such efforts are generally considered ineffectual or even foolish.

In short, this proposal seeks to make a government agency into an entity that micro-manages claimants’ job search efforts. Free-market Republicans are certainly not behind this proposal. Rather than creating an environment by which claimants could educate themselves and improve their job skills, this proposal is mainly concerned with forcing job searches down the throats of claimants so as to create a pool of labor for temp companies to draw on. Say what you want about the big government plans of Ted Kennedy, but he never sought to turn government into a mechanism for attacking working people when they are down and jobless.

The summer 2021 unemployment situation

Several folks have forwarded to me different articles that describe the current unemployment situation.

An article in Dissent establishes that the current attack on pandemic unemployment programs is mostly just another kind of attack on working folk.

Across the country, workers have used the health and safety concerns posed by the pandemic and the enhanced unemployment insurance provided by the CARES Act to renegotiate the basic social contract that governs the American workplace. As social-distancing restrictions end and employers look to meet customer demand, pandemic unemployment benefits—which increase the amount in weekly income and the length of time that workers can claim it—have empowered working people across the economy.

Nationally, wages at the bottom of the labor market experienced a huge jump in April 2020 and continued to rise. Average hourly earnings in retail are up a dollar since May 2020, and over $1.50 since before the pandemic. In education, hourly earnings are up ninety cents since May 2020. As one indication of confidence in individual bargaining, workers are quitting at a historically high rate. Four million workers, nearly 3 percent of the labor force, voluntarily left employment in April. Workers who quit are not eligible for unemployment insurance: they are changing jobs to look for better pay and treatment.

The Biden administration has professed a commitment to creating a bargaining environment more favorable to workers. “It is the policy of my Administration to encourage worker organizing and collective bargaining,” the president wrote in his April Executive Order on Worker Organizing and Empowerment, which established a cabinet-level task force to promote those goals. The purpose of the order is to determine how the administration can begin to reverse the decline in union membership, to which the White House attributes “serious societal and economic problems in our country,” including “widespread and deep economic inequality, stagnant real wages, and the shrinking of America’s middle class.”

These goals are running aground in the face of a now ubiquitous talking point: according to the nation’s business press and cable news channels, a “labor shortage” created by workers’ increased bargaining power is holding back growth of the post-pandemic economy.

In Wisconsin, wages have not actually increased all that much during the pandemic, especially in sectors where pandemic job losses were greatest — hospitality and leisure — where a huge jobs hole has been created: “More than half of the private sector jobs lost in Wisconsin in 2020 were in the Leisure and Hospitality Sector, over 60,000 in all, which left us with nearly 22% fewer Leisure and Hospitality jobs than there were in December 2019. “

On the other hand, jake reports, “one sizable industry was nearly back to even in Wisconsin by the end of the year, and both managerial and manufacturing jobs lost a lower rate of jobs than the statewide level of 4.8%.”

Job change, Dec 2019-Dec 2020, Wisconsin
Construction -0.02% (-32 jobs)
Financial Activities -1.0% (-1,539)
Prof./Business Services -2.5% (-8,030)
Manufacturing -4.0% (-19,311)

And, Jake explains, many people are actually not receiving unemployment at all but moving on to “better” jobs on their own.

It’s pretty obvious what is happening here. Many people who lost their jobs as COVID broke out had to settle for other work, and I have to think that they and a lot of others have questioned the point of settling for menial jobs that don’t pay much, and put them in contact with large amounts of people that may not be vaccinated against a virus that has killed nearly 600,000 Americans.

So when they get a chance to move on for something that is safer and/or pays better and treats them better, they’re taking it. It just hurts the fee-fees of greedy, mediocre business owners that people are taking what they have (don’t) have to offer.

Jake’s look at the 2020 economic numbers reveals that Wisconsin has actually lagged the rest of the nation:

I also wanted to give you a look at how Wisconsin shaped up compared to the rest of the US in personal income. This number went up across the board in the US despite the COVID recession because of thousands of dollars in stimulus payments, enhanced unemployment benefits, and PPP bailouts. But Wisconsin didn’t have nearly the boost that most places had, with our income growth of 4.4% putting us down at 46th in the country.

We trailed in all three areas, particularly in those transfer receipts, which may reflect that we had fewer people collecting those higher unemployment benefits, stimulus checks and PPP funds. But we also trailed in earnings (Wis down 0.3%, US was up 0.3%), and lagging in wage and earnings growth has continued to be a worrying trend in the last decade in Wisconsin.

So, the problem in Wisconsin is not too much support for unemployment but too little. What worries current legislative leaders, apparently, is that even this minimal support is still too much. In These Times features the situation in Wisconsin.

In Wisconsin, the legislature has voted to reinstate work search requirements for people receiving unemployment insurance, and declined Governor Evers’ proposal to add $15 million to the state’s unemployment system, as well as a proposal to add $28 million to worker training programs. Meanwhile, Republicans in the legislature have made moves to eliminate the $300 supplement from the federal government for UI.

[Gov. Evers says he disagrees with these actions but has not promised to veto the rollback of these pandemic unemployment programs. The evidence of these programs, however, . . . ]

“Unemployment rates in Wisconsin don’t support the overdrawn and quite dramatic, self serving conclusion that there are a bunch of people sitting on the sidelines who are ready to go to go to work in otherwise low wage, no benefit, insecure, crappy jobs if $300 a week, supplemental unemployment benefits were eliminated,” said Peter Rickman, president of MASH. At the same time, Rickman sees the current economic landscape as an opportunity for workers. ​“The way the labor market is constructed right now is such that the balance of power instead of being wholly and entirely in favor of the boss class, has had a slight tipping towards the working class,” he said.

Senator Melissa Agard (D‑16th District) argues that cutting UI won’t put people back to work as much as it would harm struggling families. ​“It’s really unfortunate that my Republican colleagues in Wisconsin are continuing down the same path that they were on pre-pandemic: making it harder for people to be able to get ahead and take care of themselves and their families,” Agard told In These Times. ​“Folks are having a hard time finding people for jobs primarily because they’re not paying people a living wage, or respectable wage to do those jobs.”

One final point to keep in mind is that Wisconsin’s unemployment system has a partial wage formula (not offered in most states) that means unemployment and work are NOT mutually exclusive. Many unemployed folk can and do work part-time while still receiving unemployment benefits.

Lame duck stimulus

Actual provisions are scarce. But, you can get a description of the unemployment provisions from Michele Evermore of NELP and from the National Law Review.

Some things claimants should immediately note:

• benefits for PEUC and PUA programs are extended an additional 11 weeks to March 14th
• an additional $300 PUC is added for anyone receiving PEUC, PUA, EB, or regular unemployment benefits during these additional weeks,
• anyone who has not exhausted PEUC benefits (now 24 weeks in toto) or PUA benefits (now 50 weeks in toto) can continue to receive those benefits after March 14th to the week of 5 April 2021,
• waivers for over-payment of PUA benefits are now available (previously, over-payments of PUA benefits were not legally available for claimants caught between regular unemployment and PUA),
• waivers of LWA over-payments are also now available,
• claimants can file new PUA claims for job losses after 1 December 2020,
• claimants with new PUA claims after 31 Jan. 2021 must now submit wage records verifying unemployment within 21 days, and
• all other PUA claimants must submit wage records verifying their unemployment within 90 days of 31 January 2021 (i.e., Thursday, 1 May 2021).

Employers should note as well:

• reimbursable non-profit employers will continue to receive the 50% subsidy through 14 March 2021, and
• 100% federal support for work-sharing arrangements will continue.

For state unemployment agencies, waiver of any interest on federal loans to cover payment of regular unemployment benefits continue (not an issue in Wisconsin, as the unemployment trust fund was $1.2 billion as of Nov. 10th). But, federal funding for waiting week benefits is halved to 50%.

Update (28 Dec. 2020): The current president waited several days to sign this bill — until December 27th — and so both PUA and PEUC benefits were slated to expire on December 26th. That delay could mean that there will be a week gap in coverage, including the new $300 PUC that is part of these extended unemployment benefits.

A report from The Hill indicates that some states and Michelle Evermore of NELP are developing a way to keep claimants from losing this week of benefits:

According to Evermore, the Labor Department’s Employment and Training Administration, which administers federal aid to state unemployment programs, could modify their existing state contracts instead of writing new ones altogether, thus avoiding the lapse.

“It looks like it may be possible that states could, instead of drafting new agreements with states, they could just modify their old agreements,” Evermore said.

In essence, they could backdate their agreements to keep the funds from lapsing. But Evermore warned that the workaround may not pass legal muster, and whether states could proceed remained an open question.

One state unemployment office confirmed to The Hill that they were working on the effort. The Hill has reached out to the Labor Department for comment.

If the workaround is approved, it could potentially prevent the trimming of another benefit that provides $300 in additional unemployment insurance to the roughly 20 million people receiving them.

White House announces new UI reforms

The President has announced several initiatives and proposed changes to unemployment law, including federally-funded wage insurance (up to $5,000 a year for two years available to workers who accept jobs that pay less than $50,000 and which is less than their previous position), expanding eligibility for unemployment benefits to part-time workers (many states, including Wisconsin, limit unemployment benefits only to those seeking full-time work), mandating 26 weeks of state UI benefits (several states have reduced the maximum weeks of available benefits), creating a trigger for federally-funded Extended Unemployment Compensation (EUC) benefits, and mandating employer’s UI taxes are sufficient to a certain extent. Initial details about these proposals are available here.

These proposals are for the most part limited tweaks to the unemployment system. The biggest changes are making wage insurance broadly available and making UI benefits available to those seeking part-time work.

The wage insurance proposal provides an economic stimulus at a time when consumer spending and wage gains remain flat. But, this insurance also provides structural support for pushing wages down by creating a cushion for workers’ loss of income in subsequent jobs.

Expanding unemployment benefits to those limited to part-time work is a boon for those in part-time jobs, including many women who can only work part-time because of family and child-care responsibilities.

Such a change, however, presumes that unemployment benefits are generally a benefit to folks making unemployment claims. As evident in Wisconsin (and other states such as Michigan), receipt of unemployment is too often leading to concealment charges and penalties that turn unemployment benefits into a millstone of debt. As the numbers in Wisconsin reveal, benefit payments are declining and now are at record lows. Because claimants in Wisconsin can no longer collect unemployment benefits because of easy disqualifications like substantial fault or end up repaying benefits they do receive because of concealment charges arising from simple filing mistakes, unemployment taxes are collecting into a fund and will never be paid out. Until the feds address these kinds of changes in state unemployment systems, any expansion of UI eligibility will likely only make things worse for most claimants.

Krugman: Heartland of Darkness

From Paul Krugman’s Conscience of a Liberal blog

This graphic paints a sharp rise in death rates from before 2000 for middle-aged white folk. It’s a startling reversal of what many expect, especially when compared to the continued declines in numerous European countries. As Krugman notes in his post:

This picture goes along with declining labor force participation and other indicators of social unraveling. Something terrible is happening to white American society. And it’s a uniquely American phenomenon; you don’t see anything like it in Europe, which means that it’s not about a demoralizing welfare state or any of the other myths so popular in our political discourse.

There’s a lot to be said, or at any rate suggested, about the politics of this disaster. But I’ll come back to that some other time. For now, the thing to understand, to say it again, is that something terrible is happening to our country — and it’s not about Those People, i’’s about the white majority.

One thing to note that in Wisconsin employment has been largely stagnant since the Great Recession. Compare employment data from the September 2007, September 2008, and the September 2011 monthly jobs reports with the September 2015 monthly jobs report. In all of these reports, the August data has been revised and is considered final. Here are the differences from the August 2015 employment data in 2011, 2008, and 2007:

So, in August 2015 the civilian labor force was only 16,100 individuals larger than what it was in August 2011 and still slightly smaller from what it was in August 2008 (when the recession was kicking in) or just slightly larger than in August 2007. Actual employment in August 2015 is just under 120,000 more than what existed in August 2011 but just 15,600 more than the 2,918,900 in August 2008. Private and government employment figures are likewise relatively flat. Yes, 76,100 private sector jobs have been added to Wisconsin’s economy from August 2011 to August 2015. But, August 2015 private sector jobs are still 8,600 less than what existed in August 2008 and just 3,600 more than what existed in August 2007.

In short, the jobs picture in Wisconsin is just awful: the state is just now getting back to a level of jobs that existed in 2008, nearly seven years later. Given that economic growth in the early 2000s was poor to begin with, it is not at all surprising that too many have been caught in the kind of despair that the lack of good, paying jobs brings.

UPDATE (9 Nov. 2015): Krugman has a follow-up in his column today:

So what is going on? In a recent interview Mr. Deaton suggested that middle-aged whites have “lost the narrative of their lives.” That is, their economic setbacks have hit hard because they expected better. Or to put it a bit differently, we’re looking at people who were raised to believe in the American Dream, and are coping badly with its failure to come true.

That sounds like a plausible hypothesis to me, but the truth is that we don’t really know why despair appears to be spreading across Middle America. But it clearly is, with troubling consequences for our society as a whole.

Findings of the unemployment audit

Yesterday, December 16th, the Legislative Audit Bureau released its report on unemployment claims handling in Wisconsin.

The report is divided into three parts: telephone claims handling, processing of appeal decisions, and benefit over-payments. The most notable finding concerns telephone claims handling.

Telephone problems

The report shows that from late-November 2013 through mid-January 2014 that more than 70% and 80% of all calls to the Department’s initial claims phone line were blocked (see p.18 of the report). Furthermore, 50% to almost 90% of all calls to the inquiry phone line were blocked from July 2013 through mid-January 2014 (see p.19 of the report). That is a staggering collapse of the Department’s phone system.

At the January 2014 meeting of the Advisory Council, the Department explained this phone problem as a seasonal blip that was slightly more than expected because folks preferred the telephone to the on-line system:

Ms. Knutson asked the Council if there was any other business the Council would like to address. Mr. Gustafson referenced a recent story that aired in the Green Bay area related to the Unemployment Insurance claim telephone line experiencing back-ups. He asked how the department is handling this issue. Division Administrator Robert Rodriguez stated that currently the department is experiencing its typical peak season but due to a multitude of things this season has been more difficult. Mr. Rodriguez stated that the department received 220,000 calls last week. Mr. Rodriguez explained that the department cannot dictate how claimants use the system although online is recommended. It is, of course, the claimant’s choice but the department would like everyone who is able to use the online filing portal to use it, but understands that some people have limitations.

Mr. Gustafson stated there was not any real issue causing the increase in telephone calls such as something similar to the most recent recession, and he was worried that the story was misleading and painted the department in a bad light and it implied a much larger problem. Mr. Rodriguez stated that the department is scaled well for 46 or 47 weeks to meet demand but we have responded to the most recent influx by adding staff, which the department typically does during the seasonal peak, and has authorized additional overtime. Mr. Gustafson stated that the story did not ask the question how the department was reacting to the issue. Mr. Rodriguez stated that an individual having to call the department 20-40 times is not acceptable but reiterated that current numbers show that the issue is going away. Ms. Feistel asked if there were issues with the online claim filing system. Ms. Knutson recognized and asked Mr. Lutfi Shahrani, the department’s Benefits Director, to address the Council on this issue.

Mr. Shahrani stated that this is not a new issue. Wisconsin typically takes 8,000 calls in early November and that number increases towards the end of November and for the month of December but then begins to taper off in January. Mr. Shahrani stated that the difficulty is not on the side of those filing for benefits, but for those who are placing inquiry calls. A multitude of factors, such as the expiration of the federal EUC program, the reduction in capacity due to how the holidays fell this year, and the additional individuals who were unable to work due to the deep freeze all are contributing to the increase in inquiry calls. Mr. Shahrani brought up the 220,000 figure stating that we do not have 220,000 claimants currently receiving benefits. He explained how callers who repeatedly hit redial clog the system. He reiterated the department has reacted to the issue by hiring additional staff, extending work hours by allowing more overtime, by not allowing vacation during the holidays and by rededicating staff during the peak time. Mr. Shahrani also stated that just yesterday the IVR system which handles incoming calls was only at 60 to 70% capacity. Mr. Gustafson again reiterated that he felt the department was unfairly characterized within the news story.

As the audit report indicates, news reports at the time actually understated how extensive the phone meltdown was, and the Department’s explanation to the council about this problem was inadequate (for instance, the number of calls being blocked was hardly typical from prior years).

The report offers no explanation for why there was a sudden increase in phone calls. At the council meeting, the Department offered the explanation that the increase in calls arose because of the expiration of Extended Unemployment Compensation (“EUC”) benefits, a reduction in capacity because of the holidays (while the audit report claims that 20 LTE staff were added in October 2013 there is no explanation about the tasks to which those LTE staff were assigned), and historically bad weather that led to an increase in temporary layoffs. In his letter attached to the report, Secretary Newson points to the following cause for the meltdown: “During the winter of 2013-2014, uncertainty about the federal Emergency Unemployment Compensation program triggered a further spike in call volume.”

That explanation makes the most sense. As the audit report shows, unemployment has been steadily declining the past three years. The number of claims filed in the 2013-14 fiscal year was 520,100 — 272,200 less than the number of claims filed in the previous fiscal year. If there was a sudden spike in claims during last winter, the data is available on a weekly basis to show whether such a spike actually occurred. Since there is no data in the report about a winter increase in claims, the available conclusion is that a sudden spike in claims was not the reason for the sudden spike in phone calls.

So, the explanation for the increase in calls turns on folks wanting to know about EUC benefits that were slated to expire in December 2014 if Congress did nothing about the issue. As noted previously in this blog, the expiration of EUC benefits was a bigger issue in Wisconsin then in other states:

In Wisconsin, 23,700 individuals are slated to lose their EUC benefits at the end of December according to this House report. That’s about one out of every 242 residents having their income slashed just before the New Year.

Further, because EUC benefits affected everyone in the unemployment program, the number of folks in Wisconsin wanting to know what would happen to those benefits was obviously more than 24,000. Unfortunately, until December 13th (when the Department finally posted information on EUC benefits on its website), the only way for folks to find any information relating to EUC benefits was to call the Department. Even after information was posted to its website, the terse language in that post (if folks could even find this post) probably left many questions about EUC benefits unanswered, such as should they still file weekly claims in case the program was renewed and how would EUC benefits start up again if Congress acted?

Certainly, there might not be easy answers to these kinds of questions. But, folks facing the loss of all income will have these kinds of questions and more. As a result, the Department’s web response did little to quell the phone calls coming in. Not until it was clear that Congress would do nothing about EUC benefits in mid-January 2014 did the number of calls begin to decline.

And, this web response does not portend well when unemployment questions arise in the future. The audit report touts as one solution in the future an October 2014 upgrade to Department computer systems that provides claimants with basic information about their claims. There are three problems with those proposed solution. First, it is only available to those who can use the Department’s on-line system.  Second, there is no evidence that the Department is doing anything to encourage and educate folks about on-line access.  The Department does not use LinkedIn, FaceBook, or Twitter to provide unemployment information or on-line access at any level. Third, the current on-line information does not include an easy way to add new information and issues that might be relevant next year or the year after that by incorporating information from sources outside of the Department or providing easy access to the Department’s specific claimant records. In other words, this improved on-line experience is hardly a solution at all.

Appeals processing

The audit report shows that the handling of appeals has improved even though the staff (aka administrative law judges) handling those appeals has declined (from 33 in 2011 to just over 25 in July 2014). Decisions are now generally being issued within the time lines established by federal authorities. Comparisons in the report with other states, see pp.26-7, however, are misleading because those states may have different notice requirements than in Wisconsin. Wisconsin, for example, only requires six days hearing notice. Other states typically require more than six days hearing notice. Cf. 430 CMR § 4.11 (ten days hearing notice in Massachusetts), “Preparing For Your Appeal Hearing” at 3 (ten days hearing notice in Illinois), “A Guide To Unemployment Insurance Appeals Hearing” at 7-8 (in Michigan, ten days notice for unemployment hearings, 20 days notice for cases involving fraud allegations), and Minn. R. 3310.2905(2) (ten calendar days hearing notice in Minnesota).

What is most interesting is the breakdown of appeal issues presented in the audit report. Of 68,900 appeals filed in the past three fiscal years:

• 19,400 concerned discharges
• 8,900 concerned quits
• 4,400 concerned able and available issues, and
• 36,200 (more than half) concerned 32 other reasons

See pp.23-4 of the report. In Massachusetts, where I was an administrative law judge for unemployment cases in early 2000s, 80-90% of all cases being appealed concerned quit or discharge issues. Even with the complications created by EUC benefits, I suspect that this percentage of cases concerning quit or discharge issues still hovers around 70% and that this percentage similarly applies to other states. In Wisconsin, however, quit and discharge cases make up only 41% of the cases being appealed. That shift in caseload is remarkable and deserves further examination.

Over-payments

The audit report notes that over-payments occur generally because of unintentional mistakes but that most of the over-payment amount at issue is from what the Department has characterized as intentional fault. This last finding has caught the attention of a few politicians.

The report does not indicate, however, that the Department is often finding intentional concealment on facts that only show a mistake. For the past year, the Labor and Industry Review Commission (“LIRC” or “Commission”) has been publishing on its website on a monthly basis it seems decisions overturning concealment determinations. See, e.g., the discussions here, here, here, and here. Given that the Commission only receives about 12% of all appeal tribunal decisions, which in turn are less than half of all determinations issued, there are most likely many, many concealment determination that should be overturned but never are because no appeal is filed in time in those cases.

The report also does not indicate that there are steps the Department could take to reduce the over-payment amounts at issue. Most over-payments occur because claimants and employer report differing amounts of wages earned in a given week (most claimants are not in the habit or tracking their hours in the same manner and detail that employers do and so often their reports do not match their employers). At present, the Department does not get wage reports from employers until quarterly unemployment tax reports are filed. Other states, however, use information from employers’ bi-weekly or weekly payroll and tax withholding reporting to verify wage reports on weekly claim certifications. In January 2013, I sent the following e-mail message to Department staffers:

Dear Scott and Lutfi,

Here is the info on the Massachusetts effort wage matching effort:

Unemployment Insurance Fraud
Protecting the integrity of the unemployment insurance program is a responsibility that we take seriously.

Through our Program Integrity Department, the Massachusetts Department of Unemployment Assistance focuses on the prevention, detection, investigation and prosecution of those who defraud or attempt to defraud the unemployment insurance program.

DUA works with other agencies
Numerous actions are taken to prevent and detect the fraudulent collecting of benefits. For instance, our Program Integrity Department regularly compares wage records from the Massachusetts Department of Revenue with records of current UI claims to ensure that claimants who work part-time while collecting UI benefits report those earnings to DUA.

The Department of Revenue also provides our Program Integrity Department with a weekly report of workers added to employers’ payrolls. This “new hire” report is also matched against UI records to check that claimants who return to work do not continue to collect benefits. It is important for both workers and employers to be aware that eligibility for UI benefits ends on the day an individual starts full-time work.

To prevent fraud, our Program Integrity Department matches records with those of other state and federal agencies including the Social Security Administration, the state Department of Corrections, and others.

Once DUA establishes that a claimant has collected unemployment insurance benefits to which he or she was not entitled, the Program Integrity Department’s Recovery Unit aggressively works to recover the overpaid benefits. A variety of collection tools are utilized including criminal and civil prosecutions, the interception of Massachusetts state income tax refunds, mail dunning, and the offset of any future unemployment benefits. Additionally, DUA levies a 12 percent annual interest charge against any outstanding overpayment balance if the claimant was determined to be “at fault”.

You can help
We welcome information from concerned citizens who know of workers who continue to collect UI benefits while they are employed.

You can report individuals who are collecting benefits while working full-time and employers who are paying workers and not reporting wages via any one of these methods:

1. Completing the DUA Fraud Hotline Complaint Form
2. Calling the Fraud Hotline – 1-800-354-9927
3. Emailing uifraud@detma.org
4. Writing to the U.I. Program Integrity Department, P.O. Box 8610, Boston, MA 02114. Or Fax to 617-723-5312

Employers can also download an AntiFraud Poster pdf format of poster_antifraud_508.pdf in English and Spanish.

From http://www.mass.gov/lwd/workers-and-unions/general-resources/report-fraud/ui-fraud.html

From what I understand, Wisconsin does everything above except for the weekly new-hire reporting/matching. From what I recollect, Wisconsin does new-hire matching every quarter.

* * *

Also, it appears that New Mexico has adopted something similar to Massachusetts along with a new web portal for both claimants and employers:

New unemployment insurance tax & claims system launched
For the Headlight Posted: 01/10/2013 02:54:21 PM MST

ALBUQUERQUE – The New Mexico Department of Workforce Solutions (NMDWS) this week successfully launched a new Unemployment Insurance (UI) system, marking the first time any state has simultaneously launched an integrated UI tax and claims system.

In just two days, the new system has already paid out $4 million in UI claims, certified over 17,000 people for their weekly benefits, helped over 22,000 customers open self-service online accounts, and enabled nearly 1,000 employers to electronically file wage reports, some for the first time.

Governor Susana Martinez said New Mexico’s new UI system is significantly improving the timeliness and accuracy of UI payments, enhancing the level of service provided to unemployed workers and businesses, and strengthening the state’s ability to prevent, detect, and recover improper UI payments.

“In just 36 months, we have replaced a 30-year-old tax system with a modern UI system that is more convenient for customers, more efficient for state workers, and more secure for the businesses that fund this program,” said Governor Martinez.

Since Monday, January 7, the NMDWS UI Operations Center has fielded some 182,000 phone calls from 17,500 unique callers. “While this extraordinarily high call volume impacted our ability to respond to all callers in a timely fashion, we successfully converted data from the old system to the new one,” said Secretary of NMDWS Celina Bussey. “The new UI system has been stable since it was launched and the majority of regular UI claims have been paid promptly.”

NMDWS has more than doubled the staff in their UI Operations Center and taken a number of additional steps to ensure that the agency is meeting the needs of its customers.

“We have immediately addressed any issues that have arisen and we are constantly monitoring our operations to ensure that we are providing the highest level of service to our customers,” Bussey said.

She noted that thousands of people have been able to go online to certify and receive their UI benefits and hundreds of employers and third-party administrators have already taken steps to directly manage their own UI accounts without NMDWS staff assistance.

“With anything new there is a learning curve,” Bussey said. “Our customer service agents are doing everything they possibly can to help our customers adjust to our new program integrity measures and understand the many options and benefits of the new system.”

Bussey said that a banking error unrelated to the new system was quickly resolved on Tuesday and everyone who has certified for benefits has received their UI payments. She also said that Wells Fargo has agreed to refund debit card holders any fees they may have incurred as a result of the delay in benefits being deposited in their accounts.

Since the new UI system launched on Monday, claimants have been applying for benefits, requesting payments, maintaining account information, and responding to requests for information. These new self-service options are helping to expedite UI payments to unemployed workers and more quickly resolving issues between employers and claimants.

The new UI system is also providing New Mexico employers with a single repository of all UI business functions. This self-service functionality is speeding up the processing of new registrations and appeals, and allowing employers to electronically file wage reports and respond to notices of claim filings. In the past, paper filing has cost NMDWS significant resources and delayed important wage data from being entered into the UI system.

The new system is also automatically calculating taxable wages and amounts due and accepting electronic payments from employers. In the past, all payments were processed with paper checks. On Tuesday, the first batch of employer electronic payments was successfully processed directly to the bank – without staff intervention.

The vast majority of calls to NMDWS’ toll-free number – some 7,000 – have dealt with the new federal law that extended unemployment benefits.

Bussey said NMDWS is working through each individual Emergency Unemployment Compensation (EUC) claim to help eligible claimants register for benefits. Due to recent rule changes and the complexity of multiple extended UI benefits, each claim is taking more time than usual to set up.

Of the 7,000 New Mexico EUC claimants potentially eligible for continued extended benefits, NMDWS has successfully paid about 1,000 this week. Many others claimants who no longer have money available in their UI account are calling NMDWS to inquire about their eligibility. NMDWS is working to determine if these people are eligible and, if so, to set them up with payments.

To strengthen the integrity of New Mexico’s UI program the new system includes what is known as “intelligent data collection and data validation” to reduce errors and increase the accuracy of UI payments. The system recognizes applicants after they have logged into their accounts and then directs them to the appropriate task. It also includes new tools to prevent overpayments and automated cross-matches with state and federal databases, such as the National Directory of New Hires.

Additional information about the new Unemployment Insurance Tax & Claims System and the New Mexico Department of Workforce Solutions is available at http://www.dws.state.nm.us. For the latest announcements and updates, follow NMDWS on Twitter (twitter.com/NMDWS) and the official YouTube channel (youtube.com/user/nmdws).

from
http://www.demingheadlight.com/deming-community/ci_22349104/new-unemployment-insurance-tax-claims-system-launched

If the Department here in Wisconsin took advantage of employer’s payroll filing rather than the quarterly unemployment tax filing, then discrepancies in wage reporting would be addressed within a few weeks rather than months later (indeed, many investigations I have seen about wage reporting discrepancies usually occur nine months to a year later). It is perplexing to say the least for why the Department has not begun exploring the option of using payroll reporting to verify claim information. In short, over-payment issues are not just a claimant problem. The Department could easily be more efficient and thorough in its own work in order to catch these kinds of problems earlier.

Assistance for the long-term unemployed

The National Employment Law Project (NELP) has led advocacy efforts to end hiring practices that discriminate against unemployed job-seekers since issuing its groundbreaking 2011 report, Hiring Discrimination Against the Unemployed.

An October 15th announcement by the administration includes two new handbooks — one for employers (“Guide to Recruiting and Hiring the Long-Term Unemployed”) and one for job-seekers (“New Guide, New Destinations”) — that offer guidance on specific programs and best practices to eliminate unemployment discrimination and increase the hiring of the long-term unemployed.

As part of this new program, the federal Office of Personnel Management (OPM) issued a new guidance to federal agencies’ hiring managers to help ensure that unemployed applicants and those who have experienced financial difficulties through no fault of their own are not unfairly denied federal employment opportunities.

For example, the guidance states that “job announcements generally should not include a requirement that applicants be currently or recently employed, which discourages unemployed workers.”  And it directs the agencies to include the following language in their outreach material:  “It is the policy of the Government not to deny employment simply because an individual has been unemployed or has had financial difficulties that have arisen through no fault of the individual.”  In addition, OPM issued a “myth buster” geared to the general public and workers interested in applying for federal employment to help clarify federal hiring policies designed to prevent discrimination against the unemployed.

NELP has been working in the issue of long-term unemployment for some time:

A January 2014 policy brief from NELP — Tackling the Long-Term Unemployment Crisis: What the President, Congress and Business Leaders Should Do — lays out a comprehensive agenda for reducing long-term unemployment, and includes several proposals closely mirrored in the administration’s initiative.

Despite receding from the headlines, the crisis of long-term unemployment — the defining feature and legacy of the Great Recession — persists for many Americans.  At nearly three million, there are still more long-term unemployed than at the peak of all prior post-war recessions.  That comparison also holds true for the percentage of the unemployed out of work for 27 weeks or longer (31.9 percent in Sept. 2014) and for the average duration of joblessness (31.5 weeks).

This year has been especially difficult for the long-term unemployed, as they have been cut off from federal extensions of jobless aid as a result of Congress’s failure to renew the Emergency Unemployment Compensation program at the end of 2013.

NELP called for the administration’s initiatives to be scaled up nationally, along with additional programs and funding to provide high-quality, personalized reemployment services as well as subsidized jobs for those long-term unemployed workers who need them.  It also called for measures to help prevent long-term unemployment, including rapid-response-type job-matching and placement services early in the job search, and legislation to prohibit employment discrimination based on an individual’s unemployed status.