Feds release two important advisories about claimant access

On Friday, October 2nd, the Department of Labor issued two advisories — officially called program letters — about maintaining claimant’s access to their unemployment benefits.

The first concerns the due process protections claimants have when charged with concealment. In particular, this advisory spells out the requirement that whenever unemployment benefits are denied:

[T]he individual must receive a written copy of that determination and must have the right to appeal the denial. States are not required to conduct a full, formal evidentiary appeal hearing before determining that an individual was overpaid, but they must offer the individual an opportunity to know and rebut the information in fact finding before issuing a decision that the individual is not eligible and was overpaid.

UIPL 01-16 (1 October 2015) at 4. Furthermore, once a claim for unemployment benefits is underway, payment of those benefits cannot be stopped until a determination about the claimant’s eligibility has been issued.

If the state agency cannot make an eligibility determination before the date of a timely payment, the state agency “presumes the claimant’s continued eligibility until it makes a determination otherwise.” Additionally, a state must inform individuals that the pending eligibility issue may affect their entitlement to [unemployment compensation] and may result in an overpayment.

Id. And, in that investigation about the claimant’s continued eligibility for unemployment benefits, the unemployment agency must independently verify any computer match information casting doubt on the claimant’s continued eligibility, notify the claimant about the doubts on his or her continued eligibility, and give the claimant time to respond to the accusation.

States may not make determinations of overpayments and/or fraud using automated systems without the input of agency staff. The individual must also be informed of the information received as a result of the match with the Federal database and given the opportunity to be heard before a determination of an overpayment may be issued.

Id. at 5. This specific statement that fraud determinations CANNOT be based on automated systems seems specifically targeted against the fraud by algorithm process currently taking place in Michigan. The advisory closes with the requirements needed for any fraud notice.

[A] fraud determination notice must be sufficient to allow the individual to know the potential penalties or other consequences of a fraud determination as well as his or her rights with respect to an appeal. The individual must be provided additional information on the appeal process including the right to have representation; to present testimony and other evidence relative to the appeal; to subpoena witnesses and records; and to be apprised of the consequences of failing to attend an appeal if one is requested. Communications must be in plain language and using methods that ensure the communication is most likely to be successful for all populations, including individuals with limited English proficiency.

Id. at 6. Given the push in Wisconsin for pursuing concealment charges against claimants for claim-filing mistakes, this advisory applies with equal force to Wisconsin.

The second advisory concerns preventing program discrimination because of age, national origin, or language proficiency and making sure that new, computerized filing and notification procedures are as user-friendly as possible. This lengthy memorandum begins by spelling out the legal requirements for open access to claims information.

[S]tate UI agencies must ensure that use of new technologies and systems for administering UI programs and providing services do not create barriers (e.g., procedural, technological, or informational) that may prevent individuals from accessing UI benefits, such as by denying them a reasonable opportunity to establish their eligibility. The U.S. Department of Labor (Department) has determined that “access” for purposes of conforming to Section 303(a)(1) of the [Social Security Act] means individuals’ ability to complete, submit, and obtain information about their initial and continued claims, appeals, reemployment services, and any other information, program functions, or services available for all claimants.

* * *

Thus, while states may offer claimants a variety of methods to receive information, the content of a written determination, whether it is a letter mailed to the claimant or provided in an electronic medium, must comply with the requirements in the Standard for Claim Determination specified [in Employment Security Manual, Part V, Section 6013.C.1.c.].

UIPL 02-16 (1 October 2015) at 3-4.

Electronic-only communication requirements may well run afoul of these non-discrimination requirements.

The nondiscrimination laws that apply to state UI agencies prohibit discrimination based on both disparate treatment — intentionally treating members of protected groups differently based on their protected status — and disparate impact — the use of policies or practices that are neutral on their face, but have a disproportionate impact on members of some protected groups. In addition, as detailed below, regulations implementing these laws prohibit states from establishing policies or procedures that, while not directly barring access to benefits or services for individuals who have disabilities and/or are [Limited English Proficient], indirectly prevent or limit access. The use of a website and web-based technology as the sole or primary way for individuals to obtain information about UI benefits or to file UI claims may have the effect of denying or limiting access to members of protected groups in violation of Federal nondiscrimination law.

* * *

States may offer individuals the option of receiving the information, services, etc., discussed in this guidance via electronic methods, but may not require that individuals communicate only through electronic means. Such policies unduly restrict program access, as not all individuals have the ability or capacity to communicate electronically.

Id. at 4-5. This advisory then goes into detail about what these non-discrimination requirements mean and describes the numerous steps that state agencies need to take. Of particular note are the following requirements and objectives:

Use of free, web-based translation services (also known as machine translation software) is not sufficient to ensure that the translation is appropriate and conveys the same meaning as the English version. Information about effective translation resources may be found at: [Lost in Translation.]

* * *

State UI agencies should also ensure that web-based claims filing systems also maintain a system for receiving and addressing complaints from limited English proficient persons and persons with a disability. This includes, but is not limited to, providing in-language notice regarding how to file an online complaint about delayed or denied service resulting from language barriers.

* * *

States may promote on-line filing as a primary method of filing UI claims, but they may not have policies and operational practices that make on-line filing the exclusive method of filing and certifying UI claims. As with persons with disabilities or those with [Limited English Proficiency], or older individuals, states must offer an alternative option for accessing information and benefits, such as by telephone and/or in person, in a manner that ensures equal access for persons unable to access or use a web-based system in order to avoid disparate impact on other protected groups. Further, states must broadly and conspicuously disseminate information about alternative access options in ways that ensure that people who may need to use such options are aware of the options. State UI agencies must ensure that use of new technologies and systems for administering UI programs and providing services do not create barriers (e.g., procedural, technological, or informational) that may prevent individuals from accessing UI benefits, such as by denying them a reasonable opportunity to establish their eligibility.

* * *

State UI agencies must also take reasonable steps to ensure that, if technology or other issues discussed in this UIPL interfere with claimants’ access, they have established alternative methods of access, such as telephonic and/or in-person options. The alternative access points must be communicated clearly in a manner that reaches the population that may need to use them. The processes the state UI agency uses to offer alternative methods of access must be documented in the agency’s policy documents and operating procedures. In addition, a state must train UI and American Job Center staff on the alternative methods of access to ensure that claimants and others who experience challenges are properly directed to alternative access options so that they may be served in a timely manner. Excessive delays experienced by potential claimants as they are referred to alternative access methods can result in a denial of access to services, in conflict with Federal UI law and nondiscrimination law requirements.

* * *

Action Required. State Administrators must:

1. Ensure that processes exist or are implemented to provide all claimants access to UI benefits as discussed in this UIPL;
2. Disseminate this guidance to appropriate state agency staff, including the state’s [Equal Opportunity] Officer;
3. Ensure that state [Equal Opportunity] Officers are involved early in all appropriate information technology modernization and business process reengineering plans to promote the full integration of equal opportunity requirements into agency technology plans; and
4. Work with state [Equal Opportunity] Officers to evaluate the avenues available to the public to participate in the UI process to help ensure access to everyone including individuals with disabilities and [Limited English Proficient] individuals.

Id. at 9, 10, 12, 13, and 14.

The recent developments in Florida and the push in Wisconsin for similar obstacles to filing unemployment claims have been going on for some time now. See, e.g., the posts about job searches changes and waivers. These advisories, however, demonstrate for the first time that federal authorities are pushing back. Stay tuned to see what happens next. The National Employment Law Project has declared: “By staking out a strong enforcement position in support of fairness and accessibility, we believe that the Department [of Labor] has taken a critical first step toward ensuring that unemployment insurance will be there when America’s workers need it, no matter who you are or where you live.”

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.

Important and comprehensive concealment analysis from LIRC

LIRC has just published to its website a comprehensive analysis of concealment issues in unemployment cases.

The decision is lengthy, as concealment cases by their very nature require a week-by-week examination of wages and unemployment benefits. This case also has a complicated history (LIRC issued an earlier decision that DWD asked to be reconsidered), and LIRC is careful here to delineate what standards should apply in a finding of concealment, what Department investigations should entail, and the obligations of administrative law judges during hearings when confronted with claimants who have difficulty understanding what is happening to them in regards to the concealment allegations.

There are two main factual issues at stake in this decision. First, the claimant was confused by the change in how DWD asks claimants on their weekly claim certifications about work and wages or pay received. This issue is not new, but here LIRC goes into detail about why a compound question on weekly claim certifications is problematic. The Commission explains (footnotes removed):

The commission is not alone in finding compound questions like the department’s Question No. 4 a potential source of misunderstanding by claimants. In June 2011, the U.S. Department of Labor strongly encouraged states to review the wording of their continued claims certification form and telephone script to assess whether any questions or language should be made clearer to ensure claimants understand what is being asked. The following example was given:

If the certification form or script contains a two-part question such as:

• Did you work and earn wages during the week?

Two separate questions could be asked instead, such as:

• Did you perform any work during the week?
• If you worked, what was the amount of wages you earned during the week (report wages earned whether or not these wages have been paid)?

This suggestion to rid claim certification forms and telephone scripts of two-part questions was part of an immediate call to action by the U.S. Department of Labor to all state  administrators to develop state-specific strategies to bring down the improper payment rate in unemployment insurance benefits programs. The call to action was communicated in Unemployment Insurance Program Letter (UIPL) No. 19-11, titled National Effort to Reduce Improper Payments in the Unemployment Insurance (UI) Program. It was recognized that the best way to effectively reduce the improper payment rate is to prevent improper payments before they occur. The U.S. Department of Labor identified unreported or under-reported earnings by claimants as the primary cause of overpayments.

Yet, in spite of the call to action, sixteen months later, in October 2012, the department did exactly the opposite of what the U.S. Department of Labor suggested it do. The department took a relatively simple, straightforward question, one not easily susceptible to misinterpretation — “Did you work?” — and created a compound question — “During the week, did you work or did you receive or will you receive vacation pay, bonus pay or commission?” In doing so, the department created an identified cause of misunderstanding by claimants and a known source of improper payments. Question No. 4 was not made clearer to ensure claimants understood what was being asked; it was made more complex and confusing. At the same time, the department also increased the penalties for concealment.

Second, the Commission found from the claimant’s testimony that she was most likely learning disabled and confused about her reporting requirements as well as the unemployment process in general. While her prior unemployment claims and her receipt of the claimant’s handbook (on-line only now) indicated that it was possible to infer that concealment could have happened, other evidence demonstrated that an actual intent to conceal was completely lacking.

It was clear from the employee’s testimony throughout the hearing that she was confused. The employee was confused about how the unemployment insurance program operates in general and was confused by Question No. 4 on the weekly claim certifications in particular.

In a request to reconsider this decision, the Department contended that there needed to be evidence causally linking the claimant’s confusion or disability to the actual mistakes on her weekly claim certifications. The Commission disagreed (footnotes that cite to portions of the Disputed Claims manual on an internal DWD intranet that is not available to the public are removed):

The reason no connection was made between the employee’s learning disability and her failure to provide accurate information to the department is because the ALJ did not develop the record on this issue. It was clear that the employee did not understand her responsibility to report her second, short-term job to the department. After the ALJ twice explained to the employee why it was necessary, the employee remained confused. The employee apologized to the ALJ and stated that she, the employee, was learning disabled and “a little slow.” Not a single follow up question was asked of the employee.

The “fair hearing” provision in sec. 303(a)(3) of the Social Security Act requires a reasonable opportunity for workers whose claims are denied to be heard by an impartial tribunal in an adjudicatory proceeding which assures them of elementary fairness. An unemployment insurance ALJ is responsible for discovering the facts and may not rely on the parties to present their cases and facts, as they understand them, and to offer complete proof. Moreover, state unemployment agencies, such as the department, have a public duty to cooperate in revealing pertinent facts and other evidence that are peculiarly within their own knowledge, whether favorable or unfavorable to the claimant. A state agency is not to assume a hostile or an indifferent attitude in cases in which it views itself as an adverse party, because it leaves to the claimant the task of discovering exculpatory facts, a task claimants are most likely ill-prepared to perform. Thus, when the department alleges that a claimant has committed fraud and the claimant states that she is learning disabled, an ALJ is expected, at a minimum, to follow up on the claimant’s statement and attempt to ascertain whether any cognitive difficulties contributed to the confusion on the part of the claimant and led to an honest mistake.

* * *

A claimant may establish the existence of learning, reading, and comprehension difficulties through non-certified and non-medical evidence by testifying, for example, as to whether he or she received special education services in school, required an individualized education plan, had low reading scores, or failed to graduate from high school.

There is much more to consider in this decision. Furthermore, it should be noted that the disabled often lack the resources and abilities to provide information about themselves or only have the ability to offer generalities rather than any specific information. Claim investigators and administrative law judges will need some sensitivity in how to delve into such matters as direct questions are unlikely to get specific evidence.  Still, this decision sets forth in great detail what the Department should be doing if it wants to allege that a claimant has actually intended to conceal material information on his or her weekly claim certifications.