New Internet Claims Filing Process for 2016

The Department of Workforce Development is revamping its Internet Claims Filing process with a much more complicated and detailed series of questions and screens. At the December 17th Advisory Council meeting, the Department was scheduled to present to the council what these changes would entail. Because of other issues, however, the council never got to see this presentation. Luckily, the Department sent me a copy.

Those filing their weekly claim certifications will now be told about fraud warnings at the start and end of their claim filing. See pp.2 and 17. And, the 14 questions now being asked are at least 20+ questions. Furthermore, rather than simplifying the information being asked about, the new questions continue to be legalistic and leave key information out.

NOTE: For comparison, here are the questions Massachusetts asks claimants (in Massachusetts, the phone questions are the same as when filing by Internet).

NOTE: Also compare the information available in the Massachusetts Guide to Benefits for Claimants with Wisconsin’s Handbook for Claimants. Notice the kind of information available in Massachusetts and the tone of how that information is presented as compared to Wisconsin.

For example, in Wisconsin there will now be a question about school attendance. See p.3. Usually, when you attend school during your regular work shift you are ineligible for unemployment benefits. But, if you work during the evenings while attend classes during the day, you should still be eligible for unemployment benefits when laid off from your evening job. In this case, the schooling does not interfere with your availability on your typical work shift. The new Internet filing form, however, only asks about attending classes during the day and does not include or ask for any information about regular work shifts.

Able and available status are now two separate questions as well. See pp.4 and 5. Missing work because of illness usually leads to a reduction in weekly benefits because work was missed. The question on p.4, however, only asks about your regular employer. Because many claimants who have temporary, part-time work do not think of those employers as their “regular” employers, they will not think a question about missing work with a temporary employer because of sickness is included in this question. This question should be asking about any current or future employer and make no reference to a “regular” employer.

Problems with other questions continue. Claimants are supposed to report all wages earned in the week for which they are filing, regardless of when they are actually paid those wages. So, the Department goes into detail about how to report those wages and hours (and minutes) of work for employers (see pp.6-8) as well as how commission work and sales are to be reported (see p.9). But, then the Department asks about sick pay, bonus pay, holiday pay, and other kinds of pay (see pp.10-12) as already received for the week — “did you receive?” — or to be received — “will you receive?” As a result, these questions imply that regular wages that are to be paid in the future do not need to reported since there is no question about reporting wages that “will be received?” Instead of two questions for vacation pay et al., only one should be asked: “Are you to receive?” And, instead of all of these separate kinds of wage income that now has to be reported separately, the Department should simply ask claimants to report “Any and all kinds of income connected to the work with EMPLOYER you are to receive for the week at issue.” By breaking these kinds of income into separate categories, the Department is requiring claimants to have an accountant’s understanding of their income in order to correctly fill out their weekly claim certifications rather than just asking for the total, gross amount of all income regardless of kind.

NOTE: The Department will even have a screen for miscellaneous income, such as baby-sitting, that has to be reported. See p.13.

Specific work search information for each job action will also now have to be provided. See p.15.

Given all the information that has to be provided in the proper category now, opportunities for mistakes will abound. And, any mistake will be an opportunity for charging claimants with fraud. In short, this new Internet filing process will NOT make it easier for claimants to file their weekly claims. But, this new process will make it easier for the Department to charge claimants with concealment.

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Unemployment benefit payments continue to decline

The Advisory Council met yesterday, September 17th, and much information was put forward, including current financial reports for the state’s unemployment system.

As noted previously, unemployment taxes are slated to decline. Next year, 2016, will see a reduced tax schedule for employers, as the reserve fund had $735.4 million at the end of July 2015 and should meet the requirements for a reduced tax schedule next year.

The most stunning news, however, is that benefit payments continue to decline markedly. The Department’s Financial Outlook Report released in April 2015 reported that “UI benefit payments in 2014 were the lowest since 2000.” See Report at 21. Now in September 2015, the Department reports that: “Benefit payments charged to the reserve Fund were $371.2 million through July compared to $445.4 million last year.” See UI Reserve Fund Highlights at 1. This level of benefit payments is “$90 million below what is expected” and “has not been seen in Wisconsin since the 1990s,” the treasurer for the state’s unemployment funds told council members. In support of this observation, the financial report included this graph on the last page.

ER taxes relative to total benefits paid

This chart shows that all benefits paid to claimants are taking a deep dive since the recession. Part of the decline is the end in 2010 of federal extended unemployment compensation benefits. But, if the end of those federal benefits told the whole story, then the decline in benefits should level off and possibly increase as employers go through cycles of hiring and layoffs. But, there has been no leveling off in Wisconsin. Rather, benefit payments continue falling off of a cliff. Keep in mind as well that these dollars are not adjusted for inflation or cost of living increases. So, this drop in benefit payments is even more devastating to claimants trying to pay rent and buy groceries than pictured here.

For why this decline in payments is occurring, the main reasons appear to be the Department’s efforts at charging concealment against claimants for their mistakes and the new substantial fault disqualification standard. See Why employer UI taxes are down: concealment and substantial fault. The Department is essentially making it harder for those losing their jobs to qualify for unemployment benefits. And, those that do qualify are increasingly facing concealment charges six to nine months after their claims have ended, forcing them to repay all benefits previously received, pay additional penalties for their mistakes mislabeled as concealment, and then forfeit years of future unemployment benefits as an additional penalty. In short, unemployment benefits do not really exist anymore for those who lose their jobs, and this outcome is by design.

What is concealment?

A bill is going forward for creating a seven year ban on benefits after two instances of concealment — aka two strikes and you’re out.

Basic matters in this debate turn on what exactly is concealment and how is concealment uncovered. A case on appeal to the Labor and Industry Review Commission (LIRC or Commission) illustrates how the Department of Workforce Development (DWD or Department) is handling these matters.

In this case, the claimant worked as event waitstaff for a hotel. He received an hourly wage around $4 per hour and a tip based on a percentage of the fee the customer paid for the event (those tips added anywhere from $50 to $300 to his weekly earnings). But, those tips went directly to the hotel, and so the claimant could not know the tip amount he earned until he received his bi-weekly check (and those tips were combined for the two-week pay period).

Unemployment benefit claims are filed on a weekly basis, however. Since he did not know what his tips were for each week, he called the Department to ask about how to file when he only knew his hourly wages. The Department representative told him the Department would get the weekly tips information from the employer when it completed its UCB-23 form about his weekly work for that employer. The difference between the hourly wages he reported and the total wages the employer reported would then be deducted from unemployment benefits in a subsequent week.

Such advice is certainly viable. The claimant does not know his weekly tips when filing, only the employer does. So, while there would be a week or two lag in what his correct benefit amount is, at least the corrected wage information from the employer would lead to corrected unemployment benefits.

But, in this claimant’s case, the employer never returned those weekly UCB-23 forms. And, for six years this happened. Not until the claimant took a second job and was discharged from that job did the Department finally act on the information that the claimant had not been reporting his weekly tips income (again, because he did not know that tips income when filing his weekly claims). The Department is charging this claimant with concealment for not reporting his tips income.

But, why did it take six years for the Department to act on this issue? First, Department representatives have discretion about when to note their advice to claimants. Naturally, when that advice is that there is no issue or problem as perceived by that Department representative, Department representatives usually do NOT note that there is NO issue with a claim filing. Only when there IS an issue will they usually note that something needs follow-up investigation in Department records.

Second, the Department could have seen a problem when the employer filed its quarterly unemployment tax returns. Those returns would have showed both the hourly wages and tips paid to the claimant. But, the Department does not check the accuracy of the claimant’s weekly reporting with those tax returns, except when those returns show wages being paid and the claimant has reported NO earnings from that employer. That is, the Department only compares a claimant’s weekly claim reporting to an employer’s unemployment tax reporting to determine if the claimant has failed to report any wages from the employer (moreover, the Department does not even make this comparison until six months later — aka the second quarterly tax return — for a claimant). Since the claimant in this case reported his hourly wages, no flags were raised despite the difference in what the employer reported on its quarterly tax returns.

NOTE: There are more timely ways to handle wage reporting discrepancies than relying on quarterly tax reports from employers. I have repeatedly suggested to the Department and the Unemployment Insurance Advisory Council mechanisms for matching claimants’ wage reports to employers’ tax withholding data. See, e.g., Findings of the unemployment audit (January 2013 e-mail message to Lutfi Shahrani and Scott Sussman describing a withholding match in other states). Neither the Department nor the council has demonstrated any interest in such mechanisms.

Third, even if the employer had supplied the weekly UCB-23 forms, the Department’s currently practice is only to note those discrepancies and adjust future unemployment benefits for those discrepancies (i.e., as the Department representative told the claimant, the claimant’s future unemployment benefits would be adjusted for the tip income not reported on the weekly claim certification). No flags will be raised about either the amount or quantity of those discrepancies until a new, separate investigation into concealment is instituted at a much later date.

In all, these three factors demonstrate that the Department really has no way of catching on-going mistakes in weekly claim certification except through a concealment investigation that occurs months or years (or even six years in this case) after the problem started. Instead of addressing these institutional deficiencies, the Department makes the claimant responsible for any mistakes in his claim-filing. Here, even though the claimant did not know and could not know his weekly tips income when filing his weekly unemployment claims, the Department still considers him responsible for including that income in each weekly claim he made. And, it is his fault the Department took six years to figure out what was going on when it alleged concealment against him. His mistake constitutes concealment regardless of his intention, his confusion, his employer’s inaction, or the departmental advice he received.

The Commission, however, has required that concealment actually be intentional. See, e.g., LIRC responds to DWD’s concealment agenda. So, the Department and the Advisory Council now seek to change the definition of concealment to make it nothing more than mere mistake and to prevent claimants from contending they were confused, disabled in some way, or the recipient of bad departmental advice. See Concealment redefinition approved: Watch out claimants. With this new definition of concealment, claimants who make mere mistakes in their weekly claim filing will be subject to severe concealment penalties.

NOTE: To understand how severe concealment penalties are, consider this example. Suppose a claimant with a weekly benefit rate of $200 under reports part-time wages of $78 on a weekly claim instead of $87, a mistake of $9. So, instead of $167 in unemployment benefits that week, the claimant should have received only $161 in unemployment benefits, a difference of $6. When concealment is at issue, however, neither the $6 difference nor the $167 actually received is the amount at issue. Rather, the entire $200 potential weekly benefit must now be repaid for that week. Furthermore, there is now a 40% (15% prior to the new state budget) administrative penalty ($80 in this case) that also must be immediately repaid. And, future unemployment benefits ranging from two, four, or eight times the weekly benefit rate for each week/act of concealment will be lost to the claimant (in this case, $400 for the 2X penalty, or two weeks of no unemployment benefits received). Finally, keep in mind that this example is only for one week. In almost all concealment cases, the Department does not allege concealment until months or years have passed, and so the concealment — since it is usually based on an ongoing mistake — concerns dozens of weeks of unemployment benefits. The claimant who did not report his tips income for six years, for instance, is subject to a repayment demand of $32,000+ and forfeits $50,000+ in future unemployment benefits even though his weekly benefit rate hovered around $130.

Keep in mind, the Department has also been making it easier for claimants to make mistakes on their weekly claim filing through too numerous and too confusing questions for weekly claim filing, see Important and comprehensive concealment analysis from LIRC, new job search requirements that ignore basic mechanisms job hunters use to find work and create hidden traps for those at temp agencies, see numerous posts about job search requirements, and new job search verification protocols, see New job search verification requirement starting, that seem little more than one more mechanism for tripping claimants up.

In these circumstances, claimants should most likely avoid unemployment altogether. The risk of making a mistake and being charged for concealment because of that mistake at some future date for some unknown reason is too great. But, most claimants probably will not know about these new issues when the likelihood of being charged for concealment when making a simple mistake on their claim filing is high. So, the proposed bill which will actually ban claimants from receiving unemployment for seven years is a good thing: it keeps claimants away from a Department that does not have their interests at heart.

Job searching and temp agencies: Weekly contacts now mandated

Back in August 2014 I described the lack of information available to claimants about one of the new requirements instituted by 2013 Wis. Act 20 — that former employees of temp agencies need to contact those temp agencies once a week as one of their four weekly job searches.

In December 2014, the Labor and Industry Review Commission issued a decision on this issue, Brown v. Seek Career/Staffing Inc., UI Hearing Nos. 14402929AP (18 December 2014). In this case, a claimant’s assignment at a temp agency ended, and she filed a claim for benefits. The temp agency had previously indicated to her that she needed to contact the temp agency more than once a week for follow-up assignments after the original assignment ended.

The Commission found that the new temp agency contact requirement in Wis. Stat. § 108.04(2)(i) applied, and the claimant had to return benefits for three weeks she had NOT contacted the temp agency. At the hearing, the claimant argued that the Department of Workforce Development had not made her aware of this new requirement.

The employee further states that neither the Handbook for Claimants nor a claimstaker advised her of the requirement to contact the employer. However, the law does not require the department to provide that information. The law requires the employer to inform the employee that she must contact the employer about available assignments. The employer is also not required to inform the employee that she might be ineligible for benefits if she fails to contact the employer. What the employee was allegedly told after the fact is not relevant to whether she performed a search for work in the weeks at issue.

The Commission reached this conclusion even though a departmental investigator found that this requirement to contact the former temp agency did not apply to her because the temp agency here wanted the former employee to contact the agency more than once a week — i.e., more than what was required in the statute. For the Commission this initial decision by the investigator was irrelevant because the Commission had not previously addressed this temp agency contact requirement.

The adjudicators found that Wis. Stat. § 108.04(2)(i) did not apply to the employee because the employer required that the employee contact the employer more frequently than weekly. The ALJ found that, for unemployment insurance purposes, the employee was not required to contact the employer more frequently than once per week. However, she was still subject to the requirement of Wis. Stat. § 108.04(2(i) to contact the employer at least once per week in order to be eligible for benefits. An interpretation of a statutory provision which disregards a contrary long-standing interpretation by the commission constitutes departmental error. Parker v. Cady Cheese Factor Inc., UI Dec. Hearing No. 05200982EC (Aug. 12, 2005). Wis. Stat. § 108.04(2)(i) is a recently enacted provision of the unemployment insurance law and this case is the commission’s first occasion to interpret and apply its language. The adjudicators did not disregard any settled or long-standing interpretation of Wis. Stat. § 108.04(2)(i). While the commission and the ALJ have a different interpretation of that provision than the adjudicators’ interpretation, the commission cannot conclude that the adjudicators’ interpretation was unreasonable so that waiver of the recovery of overpaid benefits is required.

So, in 2014 the claimant’s handbook had no information about this requirement. But, the Commission found that this requirement still applied regardless of whether the Department told claimants about it.

And, keep in mind that the current claimant’s handbook still has no information about this requirement:

Part 4: Work Search, Registration for Work and Re-employment Services
Work Search
When You Must Perform Work Search Actions

You are required to perform at least four work search actions each week unless the department clearly tells you that your work search is “waived” and that you do not have to look for work.

In some cases, you will not have to look for work if you are working part-time. Do not stop looking for work just because you start working part-time. Call a Claims Specialist to find out if your part-time work allows us to waive your work search.

If you do not make an adequate search for work, you may lose benefits.

If applying for Wisconsin UI Benefits from another state and Wisconsin tells you to register for work or report in person, you should go to the public employment office nearest your home.

Weekly Work Search

You are required to perform at least four work search actions every week if you are told that you have to look for work.

If you are required to look for work, the UCB-12 weekly work search notice will provide you with detailed work search instructions and a sample work search log. Do not stop looking for work unless you are advised by the department your work search is waived.

The department may request evidence of your work search at any time. You are required to keep a record of your weekly work search actions for one year. If you file your weekly claim certifications online, you are required to report work search actions as part of completion of the claim. The Department will keep copies of work search records you submit online. Falsely reporting any information on your work search form may be an act of concealment. (See Part 7: Fraud and Quality Control.)

Registration for Work

If you are required to perform a weekly work search you must register for work with Wisconsin Job Service online at https://jobcenterofwisconsin.com/ui and complete a job match profile within 14 days of the date you completed your application for UI benefits.

If you fail to register by the deadline provided, you will not be eligible for benefits for any week prior to the date you registered. If you have questions or feel you have justifiable cause for not registering as required, contact a Claims Specialist.

If you have previously registered. you must logon to https://jobcenterofwisconsin.com/ui to verify that your registration and job match profile have not expired.

Re-employment Services

Help in Finding Employment

For re-employment services logon to http://jobcenterofwisconsin.com or contact your nearest job center. To locate the nearest job center call 1-888-258-9966 toll free or search online at http://wisconsinjobcenter.org/directory. If you reside in another state contact the nearest public employment office.

Re-employment Programs

If you are registered with Wisconsin Job Service, are required to seek work, and reside in Wisconsin or a border ZIP code, you are required to complete an online orientation and assessment. When you complete the orientation and assessment, you will be notified whether you have additional requirements to participate in re-employment services. Participation in re-employment services is intended to help you return to work faster.

If you fail to participate in the re-employment services, you may lose benefits. If you cannot participate within the deadline given, contact the Job Center immediately to reschedule.

Participation in any of these required re-employment services will satisfy your work search for the week in which you participate. However, attending other employment workshops on your own can only be considered one work search contact, even if the workshop is conducted by a Job Center.

Updated: March 9, 2015

In other words, if you work at a temp agency and want to claim unemployment benefits after the assignment ends, you will need to contact that temp agency every week of your unemployment as one of your four job searches. It does not matter that no one has told you about this requirement as long as the temp agency itself has informed you that it wants you to contact the agency every week after your assignment ends.

Whether you have to accept each assignment offered you is a question for another post.

UPDATE (26 May 2015): The May 2015 Advisory Council’s activities report at p.7 has the following information about this requirement to contact temp agencies on a weekly basis:

2013 Wisconsin Act 20 provides if a claimant’s last employer was a “temporary help company,” the claimant must contact that employer weekly for an assignment or the claimant is considered to not have conducted a reasonable search for suitable work.

The temporary help company must provide written notice of the fact that the claimant did not contact the temporary help company to the department within 10 business days after the end of that week. There are three exceptions to this requirement:

1. The claimant has been waived from work search actions by the department;
2. The temporary help company did not require the claimant to contact it or failed to give the claimant written notice of the requirement that the claimant must conduct weekly contacts with the temporary help company seeking assignments, or;
3. There is good cause for the failure of the claimant to contact the temporary help company.

If the claimant does contact the temporary help company, the claimant will have satisfied one of the required weekly work search actions.

Primary Statute Created: Wis. Stat. §108.04 (2) (i).

The new work search requirement for temporary help companies resulted in 138
disqualifications due to failure to contact the company, protecting UI program integrity and saving thousands of dollars for the UI Trust Fund.

So, the Department is actively applying this requirement without even including this requirement in the claimant’s handbook.

LIRC responds to DWD’s concealment agenda

At the 16 April 2015 Advisory Council meeting, the Labor and Industry Review Commission provided memoranda regarding potential legal problems with the Department of Workforce Development’s proposed legal changes.

My post yesterday discussed the Commission’s memorandum regarding the Department’s SSDI proposals. Today, the issue is the Department’s push to label everyday mistakes as concealment, previously noted in these posts regarding employees and employers.

Along with the cover letter explaining why these memoranda were drafted, the Commission presented to council members a memorandum regarding the Department’s latest concealment proposal, D15-08. The Commission’s memorandum is a thorough debunking of the Department’s rationale and alleged scope for its proposed changes to concealment.

But, before reviewing this memorandum, it is important to understand what is going on here between the Commission and the Department. Luckily, the Department provided the Advisory Council with some data on this subject.

LIRC concealment/fraud decisions
Year Total ATD found fraud; LIRC reversed ATD found fraud; LIRC affirmed ATD found no fraud; LIRC affirmed Remand for add’l evidence
2015 44 14 23 3 4
2014 196 123 28 6 39
2013 147 25 77 34 11
2015 data only from January through 12 April 2015

These numbers reveal that two big shifts in concealment cases took place in 2014. First, the number of cases where appeal tribunals found no fraud declined markedly from 2013 to 2014 — going from 34 cases to only 6 — even though the total number of concealment cases increased. Second, the number of concealment cases being reversed by the Commission jumped significantly in 2014. In 2013, the Commission only reversed 25 appeal tribunals who found concealment. But, in 2014 nearly five times as many determinations — 123 — were reversed by the Commission. Now, this huge increase is partially explained by the fact that concealment cases usually involve multiple determinations. So, when the Commission reverses a concealment case, two to three initial determinations are usually at issue in that concealment case.

But, these numbers also show that in 2014 appeal tribunals were moving in the opposite direction to the Commission. The Department and the administrative law judges who issue appeal tribunal decisions seem to be finding concealment in circumstances that everyone agreed in 2013 was not concealment. Indeed, as the Commission’s decisions in 2014 reveal (see these posts), the Department and appeal tribunals are finding concealment in circumstances where only honest mistakes are being made.

The Department has not acknowledged this change in direction. Indeed, as described by the Commission in its memorandum, the Department has actively attempted to pretend that no change in concealment law has even occurred and has even implied to the Advisory Council that it is winning circuit court cases in reviewing the Commission’s concealment decisions. At the 19 March 2015 council meeting, for instance, the Department informed council members that a Dane County circuit court had already reversed one concealment decision by the Commission. As a result, the Commission’s memorandum also seeks to set the record straight to council members about what is actually happening with all of these concealment court challenges by the Department.

As described in the memorandum reviewing the history of unemployment concealment in Wisconsin, the Commission notes that five 2014 cases appealed by the Department have already led to courts affirming the Commission decisions at issue. See Commission concealment memorandum at 4. And, the Dane County case previously described by the Department as a reversal of a Commission decision was actually a remand because an “unnecessary” factual scenario, according to the judge, was not addressed in the Commission decision and the Department chose remand to address that issue rather than have the decision simply affirmed. See id. at n.9.

Understandably, the Department was not happy to have this memorandum in the hands of council members, and at the April 16th meeting Janell Knutson lashed out at the Commission for providing political analysis in place of legal reasoning. In addition, Scott Manley, WMC vice-president, publicly endorsed this view. As a result, the Commission’s memorandum may not lead to changes or a rejection of the Department’s proposed new definition of concealment. Even if the council takes no action on the Department’s proposed changes to concealment, this change may end up being added to the current budget bill just as the Department’s proposed substantial fault standard was added to the state budget after being rejected by the Advisory Council. See this prior post.

Still, the Commission’s memorandum is an excellent introduction to the issue of unemployment concealment and fraud. The memorandum not only details the flaws in the Department’s proposal — how the proposal mis-characterizes Commission decisions, mis-states the original intent of the concealment definition, runs contrary to information given to claimants and adjudicators, conflicts with federal fraud measures and standards, leads to fraud penalties for honest mistakes, and does nothing to stop improper payments before they occur — but it also offers an excellent description of the history of how the concealment definition was developed and applied. Anyone interested in unemployment law should read the Commission’s memorandum.

Claimants’ Handbook — online only now

DWD’s Handbook for Claimants is now an online only publication. When new unemployment claims are filed, DWD is no longer sending printed copies of the handbook to claimants. Instead, the following notice is sent, directing claimants to look up the handbook online and declaring that claimants are responsible for knowing ALL the information contained in the handbook that they need to look up. While the notice is dated May 2013, this change was made sometime in October or November of this year.

For comparison, the Handbook for Employers — a lengthy publication — has been an online publication only for several years now.