UI Legislative proposals active in 2016

At the 17 December 2015, several legislative proposals affecting unemployment benefits were described to the Advisory Council. This legislation includes:

• Returning work search waivers to what previously existed — Employees and employers have begun to voice concerns about how the limitations on work search waivers previously approved by the Advisory Council do not make sense for Wisconsin. No immediate change to the current work search waivers will happen, however. And, whether Wisconsin ever returns to the original rules is uncertain. For instance, there was extended discussion by council members of perhaps allowing employers to designate certain employees for longer waivers because of their skills or high value to the employer but leaving other employees to the now 8/12 week waiver maximum. See my own comments on the proposed regulations.
• Expanded criminal penalties for unemployment concealment — Previously discussed here.
• UI law changes in order to counter recent NLRB decisions — Legislators want to pass legislation that will supposedly undo a recent NLRB decision called Browning-Ferris Industries that re-defined the test for determining when the employees of one company will be treated as the employees of another company (e.g., when the employees of a franchisee or temp agency are really the employees of the franchisor or client company because the franchisor or client company sets the terms and conditions of employment for the employees). NOTE: unemployment is not mentioned once in the decision, so the applicability and purpose — let alone its effectiveness — of the state law changes in this proposed legislation are muddled at best. And, as DWD notes in its memo, the changes could be extremely problematic for some Wisconsin employers.
• Exempting real estate agents from unemployment law — The proposed legislation is intended to remove real estate agents from coverage of any and all employment law and unemployment law issues.
• Whether UI claimants will have their benefits publicly revealed — As DWD notes, this proposed legislation conflicts directly with federal law.

Also, the Department has begun publishing on its website some of the proposals being discussed by council members, including management proposals to add additional claimant disqualifications and labor proposals regarding new penalties for employers who mis-classify their employees as independent contractors and increasing the wage base and tax schedule for employers’ unemployment taxes in order to make the UI fund solvent. NOTE: This 2013 PowerPoint presentation describes what makes or does not make a UI fund solvent. The Department has yet to publish any of its proposals, so this blog remains the sole source for Department-initiated changes to unemployment law. For instance, the Department is still waiting for the Council’s decision on its UI modernization proposal, D15-06.

NOTE (8 January 2016): At the January 7th council meeting, the Advisory Council approved of D15-06 with minor changes that were not detailed.

Final concealment language approved and drafted

Today at the November 19th Advisory Council meeting, the Department presented the final concealment language that the Advisory Council previously approved at its October 29th meeting.

In this final proposal (cf. to the original proposal), claimants have “a duty of care to provide accurate and complete” responses to Department inquiries and that the following six factors will be used for determining whether a claimant intended to mislead the Department:

1. Whether the claimant failed to read or follow instructions or other Department communications,
2. Whether the claimant relied on statements or representations of non-Departmental employees,
3. Whether the claimant has a limitation or a disability and the claimant provided evidence of that limitation or disability to the Department,
4. The claimant’s claims filing experience,
5. Prior instructions or concealment determinations issued or provided to the claimant, and
6. Any other relevant factor providing evidence of the claimant’s intent.

While concealment still “means to intentionally mislead” the Department, a third sub-section declares that: “Nothing in this subsection requires the department, when making a finding of concealment, to determine or prove that a claimant had an intent or design to receive benefits to which the claimant knows he or she was not entitled.”

So, concealment is still an intentional act, but the Department does not need to demonstrate an intent to conceal. These two provisions contradict each other, and the only way to make sense of them is to ignore the contradiction and conclude that: (1) concealment is intentional in name only and (2) can be demonstrated by any claimant mistake that led to an over-payment of unemployment benefits. The only apparent way a claimant can avoid a concealment charge is if she can show that her mistake was not intended (i.e., she did not intend to answer “no” instead of “yes” in response to a question and somehow did not have the chance to review and correct that mistaken answer). Under such a framework, concealment is pretty much a guarantee for almost all claimant mistakes.

NOTE: The number of LIRC decisions overturning concealment charges showcase how claimants are already being charged with concealment for nothing more than accidental claim-filing mistakes. Under this new definition of concealment, however, the statutory basis for requiring an actual intent to deceive for a finding of concealment will no longer exist. As a result, the Commission will not have a statutory basis for overturning these concealment charges.

The Labor and Industry Review Commission previously presented to the Advisory Council a memorandum about the Department’s proposed changes to the definition of concealment (see the discussion in this post for a discussion of the Department in 2014 changed how it handled concealment cases and now seeks to cement that new practice in the statutes). This proposal essentially adopts the Department’s current practices in charging concealment against claimants. As I noted already, “Unemployment claims . . . have . . . become a vehicle for alleging concealment against claimants,” and the unemployed should now generally NOT file claims for unemployment benefits.

NOTE: Because benefit payments have plunged to record lows, it appears that many of the unemployed have already adopted this position and avoided filing claims altogether.

To compound matters, the effort to criminalize concealment has been renewed in AB533 [UPDATE 4 December 2015: companion bill SB401 has also been taken up with hearings] with the re-introduction of the criminal penalties that were removed from Governor Walker’s budget bill. The Department’s original Budget Act memo on these felony penalties for concealment details the consequences to claimants charged with concealment. So, if AB533 [or SB401] passes, prison terms will be applied to claimants who are being held strictly liable for their claim-filing mistakes. YIKES!