SSDI benefits and unemployment

In 2012, the Department of Workforce Development introduced numerous proposed changes to unemployment law, and one of those proposals, D12-05, sought to ban recipients of Social Security Disability Income (SSDI) from receiving unemployment benefits.

After back and forth between the members of the Advisory Council and the Department, a new version of the Department’s proposed ban on unemployment benefits when receiving SSDI benefits was drafted, supported by the council, and passed by the legislature.

In 2014, however, the Labor and Industry Review Commission found that the actual statutory language did not accomplish what the Department intended and held that the ban on receiving unemployment benefits only applied for the week in which a person’s monthly SSDI benefits were paid. Since then, the Department has appealed each and every Commission decision allowing claimants receiving SSDI benefits to continue receiving some unemployment benefits (about eleven such cases in total). An amicus brief being filed in some of these circuit court cases has the details about these events and issues.

This amicus brief also demonstrates the fundamental flaw in the Department’s push to keep SSDI recipients from receiving unemployment benefits, namely the Department’s presumption that SSDI recipients do not work and leave the labor market. As detailed in this amicus brief, not only do folks receiving SSDI benefits continue to work in numerous kinds of jobs, they are also encouraged to do so.

Undeterred, the Department explained at the 19 February 2015 Advisory Council meeting that a proposal for eliminating all unemployment eligibility for those receiving SSDI benefits was being developed. At the 19 March 2015 council meeting, the Department presented this new language in D15-01 to make the ban on unemployment eligibility apply to all weeks SSDI recipients receive unemployment benefits.

To establish why this new and total ban was needed, the Department informed council members that in January 2014, when the first ban on unemployment eligibility for SSDI recipients was instituted, 687 claimants were immediately disqualified because they notified the Department that month that they were receiving SSDI benefits. This 687 number bears repeating: the SSDI ban as implemented by the Department stopped unemployment benefits for nearly 700 claimants. And, only eleven or so claimants who appealed their cases to the Commission managed to retain some eligibility.

The Department’s recently released Financial Outlook Report at p.34 shows the financial impact this ban on unemployment benefits for SSDI recipients has had: nearly $1.5 million annually is not being paid to claimants based on the work they have performed the previous year.

Staffers in the Secretary’s office of DWD recently asked the Commission to identify possible legal problems in the Department’s unemployment proposals. The Commission did so, and reported to the Advisory Council the problems with the Department’s SSDI proposals arising from the Commission’s legal analysis. The Commission’s memo reveals three basic problems with the Department’s SSDI efforts:

  • a total ban on unemployment eligibility discriminates against the disabled
  • a ban on unemployment eligibility because of disability is inconsistent with other provisions of unemployment law
  • a complete ban on unemployment eligibility is far too broad relative to the income and eligibility of many if not most individual claimants

In response, at the April 2015 council meeting the Department lambasted the Commission’s memorandum as driven by a political agenda rather than legal analysis. Scott Manley, WMC vice-president, chimed in to endorse the Department’s criticism of the Commission’s “political” opinions. These conclusions were especially remarkable when the Commission’s memorandum represents the first time that council members were presented with the Kluczynski decision at issue in these SSDI cases.

The Advisory Council, however, apparently accepted the Department’s conclusion about SSDI benefits. After the members caucused, they indicated that they approved of the newly proposed statutory language in D15-01 and that the Department could go ahead and present this proposal to the legislature.

SSDI and unemployment

LIRC recently issues a lengthly and well-reasoned decision regarding what recent changes to unemployment law in regards to receipt of SSDI benefits means. Here is what I wrote to a clinic client about that decision:

You came to the clinic in April and May of this year with numerous questions about the impact of new unemployment law provisions on people receiving social security disability benefits. When last we spoke, you were planning on appealing on your own an administrative law judge decision that denied you all unemployment benefits because you were receiving social security disability income.

The Labor and Industry Review Commission (LIRC or Commission) has recently issued the enclosed decision, Kluczynski, UI Hearing No. 1400214AP (30 May 2014), that answers many of those questions. The Commission held in Kluczynski that receipt of social security disability benefits only affects unemployment benefits on the week when both unemployment and disability benefits are received. In other weeks where unemployment benefits can be received and for which no disability benefits are paid, claimants are still eligible for their unemployment benefits.

The Commission also goes into great detail in Kluczynski about the contention of the Department of Workforce Development (DWD or Department) that people claiming both disability and unemployment benefits are double-dipping. As the Commission concludes, that position is NOT supported by either social security disability law or unemployment law and wrongly presumes that individuals eligible for each are mutually exclusive to the other. It is an extremely well-argued decision, and I suspect that this decision will withstand judicial scrutiny if the Department should appeal.

Unfortunately, LIRC’s unemployment decision database is temporarily down. I’ll link to Kluczynski when the cite is fully operational again.

UPDATE: Here is the link to Kluczynski.

Not surprisingly, DWD has appealed all of the SSDI decisions LIRC has recently issued on this matter, including Kluczynski. What is strange is that all these appeals appear to be in Kenosha County, a county where most or all of the claimants at issue in these cases do NOT reside.

Advisory Council Meeting — 1 April 2013

It was a busy day.  Council members pretty much went into caucus mode from 10:15 until 3 in the afternoon, when they emerged with a deal on the remaining DWD proposals.

D12-01 — revised misconduct and new substantial fault
The council declined to adopt the proposed substantial fault standard but did recommend adding examples of misconduct relating to:

– alcohol and illegal use of drugs
– larceny of property or services
– conviction for a crime substantially related to the job
– intentional acts that jeopardize an employer license or certification of some kind

For the most part, it appears that these provisions codify current LIRC case law.  Until actual language is drafted by LRB and DWD, however, the specific impact is hard to predict.  The alcohol and drug testing provision, for example, may not include employees being under the influence of legal drugs while at work.  Furthermore, the conviction provision could be problematic, especially since Wisconsin specifically prohibits discrimination of employees because of arrest or conviction. As a result, employers may still be liable for back pay awards for discrimination when acting in ways that they think are covered by this misconduct language.  This conviction provision may lead employers to think, for example, that a discharge based on arrest is covered here. And, determining whether there is a substantial relationship between a conviction and a discharge is probably something an employer should not make without solid legal advice, lest the employer open itself up to a discrimination charge and potential backpay damages.

The absence and tardy provision in § 108.04(5g) remains in place, though there are a few modifications.  The triggers are reduced, from 6 tardies in 12 months to 4 tardies in 120 days and from 5 absences in 12 months to 2 absences in 120 days.  There is also new language about how an employer’s policy must, in regard to tardies but not absences, set forth reasonable notice requirements that allow for notice as soon as practical (in any case, the employer’s policy must still set forth what is adequate notice for tardiness and absences).  It is not clear why this requirement only applies to tardies and not absences.  I’ve had cases, for instance, where the claimant missed work because of a car accident, called the employer on her cell while firefighters were using the jaws of life to free her, and the employer still fired the employee for missing work.  In this scenario, the employee’s phone call, while done as soon as possible, may still not satisfy the employer’s requirements for adequate notice.

D12-19 — Quit exceptions
Most of the proposed eliminations of the quit exceptions were rejected.  Two modifications are adopted.  First, exception (7)(e) — quitting a job that an employee could reasonably refuse to accept when offered — is modified.  Instead of ten weeks for an employee to decide whether to quit the ill-suited job, the employee will have 30 days.  Second, exceptions (7)(L) and (p) are combined so that an employee who leaves one job for better prospects in another still qualifies.

One exception is eliminated by the council: (7)(m) — loss of union employment.

Finally, the council agreed that the number of re-qualification weeks be expanded from four to six.

D12-30 — Declining suitable work offers
As with quits, the re-qualification weeks are expanded from four to six.

D12-31 — Benefit rate change
The maximum weekly benefit rate increased to $270, but the minimum WBR unchanged

D12-03 — claimant PINs
Adopted by the council.  If passed by the legislature, claimants will be strictly liable for any overpayments of benefits if they disclosure their PIN numbers or fail to provide adequate safekeeping of their PIN numbers.

The council declined to adopt the following proposals:
– D12-06 — Dep’t error redefined to exclude computer error / new COA for collection
– D12-08 — Claimants providing DWD with information
– D12-20 — Weekly filing via telephone

One Department proposal —  D12-09, Technical change: correction of prior drafting errors — has yet to be considered, as there was no mention of that proposal by the council or DWD.  It seems likely that the council wiil approve of this proposal at a subsequent meeting.

Finally, there was continued discussion of proposal D12-05 — SSI disability and UI benefits.  DWD complained to the council that its decision to allow UI benefits and SSI disability at the same time was raising problematic drafting issues and concerns from LRB.  The council emphasized to DWD that the tests for whether someone is able and available for unemployment purposes is different from the disability criteria for social security disability (ed. note here: this issue of different laws having different tests is not new in employment law; for example, there are different tests for independent contractor status in tax law, labor law, common law, and Wisconsin UI law — to name a few, and there are different tests for showing discrimination in federal law, state law, or in the City of Madison).

For the council, it makes no sense in light of those different tests to prohibit receipt of unemployment benefits when someone has simply applied for social security disability and does not know if or when that application for disability benefits will be approved.  The only change in the law adopted by the Council is that if the individual eventually succeeds in obtaining social security disability, then that individual can no longer receive unemployment benefits, and the Department can recover any benefits paid to that individual after the time when the disability application is granted.  Because of federal law that prohibits states from recovering debts against social security benefits, the Council explained, DWD cannot seek to recovery UI benefits that were paid for the time from when the application was filed to when it was finally approved.

The legislators’ letter regarding their support for the Department’s proposals and additional changes to unemployment law was formally given the council after they came out of caucus.  So, there was no opportunity to consider the letter in detail.

The council next meets on April 18th.

Advisory Council Meeting — 2/21/13

At this meeting, there was agreement on the following DWD proposals:

D12-05 SSI disability
Approved with the change that any restriction on UI benefits not occur for those who have only applied for SSI disability.

D12-18 Technical change: ineligible b/c wages received

D12-32 Participation in training programs as a UI eligibility requirement This proposal was first presented at the 2/21 meeting. It makes explicit DWD authority to mandate training, skill surveys, and re-employment services for UI eligibility. The language here gives DWD clear authority to mandate claimants use computers in their dealings with DWD and to complete required surveys, forms, and employment services unless the claimants have good cause not to.

The Department also announced that the sequester, if it happens, will lead to a reduction in EUC benefits and EB benefits to claimants. In Wisconsin, claimants are currently only eligible for the first two tiers of EUC benefit payments. The reduction in benefit payments will be ~9% — if the sequester happens. Regular unemployment benefits will not be affected.

The other proposals not yet acted on are still under consideration. The next meeting for the Advisory Council is Thursday, March 14th.