Redux: Unemployment hearing offices in Wisconsin are still closing

After this December 5th post and media reports (see here, here, and here), numerous legislators complained to Secretary Frostman about the closing of unemployment hearing offices throughout the state. The Department of Workforce Development and the secretary responded on December 11th with a press release announcing that in-person hearings will continue to be available in Eau Claire and Fox Valley and a letter full of corporate speak that promised much but said little. This letter indicated that:

  • access to in-person hearings throughout the state continues;
  • offices in Madison, Eau Claire, and Fox Valley are relocating or closing but that staff in these offices have the choice to relocate to GEF-1 in Madison or to work remotely and that the $350,000 in savings will lead to system improvements for everyone;
  • these closings are based on reduced federal funding for the administration of the unemployment system and a requirement that federal funds cannot be used to lease vacant office space;
  • telephone hearings are increasing because of their convenience to the parties and other states have nearly 99% of their hearings by telephone;
  • in-person hearings will continue in northern Wisconsin in shared space already leased by the Department or in other locations identified by stakeholders;
  • modernization efforts have made maintaining separate hearing offices unnecessary for administrative purposes; and
  • support for job services continue to be available throughout the state at libraries, job centers, and the mobile job center van.

None of these points explain exactly when and why this decision to close the hearing offices was made. And, the substance of what is stated in the letter is simply lacking.

  • “Access” here is an open-ended statement without any explanation or clarification. Does the access here simply refer to in-person hearings currently being available until all of the offices are closed?
  • Yes, offices are closing or relocating. But, only administrative law judges are being given the option of working remotely (i.e., from home, and no one knows how that proposal will work). Other staffers have been told their only option is to relocate to GEF-1 in Madison, transfer to another job, or be laid off.

Note: when the administrative law judges were unionized, they pushed for a work-at-home option with the Doyle administration for writing decisions. The Department flatly rejected that proposal because security protocols could not be put in place to allow such an option. Now, the Department is apparently proposing that administrative law judges will both write decisions and conduct telephone hearings from their homes.

  • $350,000 in savings is chump change for the Department. In October 2019, the Department’s program integrity fund (line 228 of this report) reveals that this fund was $13,122,000 after spending $2,484,532.38 that month. In November 2019, this program integrity fund was $11,766,000 after spending $1,833,441.58 that month. The Department essentially has $11+ million to spend on administrative costs as it deems fit and is burning through $1.8+ million a month on its efforts to find claimant concealment.

Note: for comparison, the entire budget for the Labor and Industry Commission is approximately $2.7 million per fiscal year.

  • Yes, federal funding has declined as the number of claims have declined. But, these hearing offices were open and maintained in the 1990s, when unemployment claims were similarly low (but, there were many more Department personnel and every Department notice had to be mailed, including weekly claim confirmations, so the administrative costs for running the unemployment system were higher). And, these hearing offices are only becoming vacant because the Department has decided to close them in the first place. If the Department kept them open and occupied, then the prohibition on renting vacant space would not apply. In other words, this issue is about priorities and has nothing to do with funding.
  • The growing number of telephone hearings presumes that the parties are pushing for their use and is not the result of a Department making telephone hearings the only option (by scheduling a hearing in Madison, for example, when the parties reside in Rice Lake). I know of absolutely no one that prefers a telephone hearing over an in-person hearing. Certainly, a drive of an hour or more for an unemployment hearing is not convenient, and in such cases a telephone hearing may be more appealing. But, parties always had the option of a long-distance drive if they thought in-person attendance was important enough. And, certainly in numerous situations (many witnesses, complex evidence, or sharp factual disputes between witnesses) parties still drive hours to attend a hearing despite the “convenience” of a phone hearing. Now, it appears that there will be no option for in-person attendance. Nor, is there any indication about what criteria will be used by the Department to allow a party to attend an in-person hearing. Finally, the fact that other states have 99% of their hearings by phone should not mean that telephone hearings are a good idea for Wisconsin. If that was the case, then the Department should not be saying here that in-person hearings will still be available.

Note: Right now in Madison, there is no identified procedure or process for attending a hearing in-person at the available hearing office (in GEF-1). In November 2019, my requests for an in-person hearing in Madison were met with deaf ears. In January 2020, I saw an ALJ conducting an in-person hearing in one of the equal rights hearing rooms, but my inquiries into how that hearing occurred have not been returned. A student for the Madison unemployment clinic reports utter confusion in December 2019 when he went to GEF-1 to review a case file. So, if there is no in-person option available in Madison where a hearing office in GEF-1 is still located, it is hard to understand how in-person hearings will occur in Eau Claire or Fox Valley, for instance, when there is no longer any hearing office or hearing staff whatsoever. [ + The ability to conduct in-person hearings in Northern Wisconsin is completely unexplained. Twenty-plus years ago, hearings were held at numerous locations outside of the regional hearing offices in order to cut down on travel time for the parties. With hearing administration centralized in Madison, I do not understand how the Department will suddenly start having in-person hearings at neutral locations throughout Northern Wisconsin, as the folks in Madison will most likely lack familiarity with the geography and travel issues connected with possible neutral locations. What seems more likely is that the Department will start having in-person hearings at the offices of the employer. Such an option is certainly agreeable to employers, but most employees will probably not think they are getting a fair shake in such circumstances. If in-person hearings in Northern Wisconsin are still viable, then the Department should be indicating in some way how in-person hearings will be conducted in the future when there are no longer any open hearing offices.

Note: In the 1990s, hearings could be conducted on-the-fly at remote locations because all an administrative law judge needed was a portable recorder, a notepad, and a laptop. With all unemployment hearings now being recorded via a fancy VOIP phone system, high-speed Internet access is essential for these hearings. Given how high-speed broadband is difficult to have in sections of Northern Wisconsin, is unclear what protocols the Department will have in place to make sure Internet access is sufficient for the Department’s current recording technology.

Note: The geography issues should NOT be under-estimated. Staffers in Madison have on numerous occasions confused Appleton, Neenah, and Menasha with each other. If these Fox Valley cities cannot be kept distinct, I do not have much confidence in how the Department will manage a case that has an employer in Oconto Falls and a claimant in Wausaukee.

  • The reference to “modernization” efforts essentially indicates that the Department made local hearing offices unnecessary because everything could be handled in one office. As such, this statement focuses entirely on the Department’s own administrative convenience. There is no information in this letter about what specific steps or actions or criteria the Department will implement in regards to making the hearing process more accessible.
  • The availability of job services (which is not all that helpful given the e-file requirements the Department has mandated for claimants) provides no help with unemployment hearings. Access to case files in hearings, for instance, is not available from job centers. Indeed, it appears that all case files will be prepared in Madison, so the parties and their counsel will never see reports and other documents which administrative law judges review but which usually are not included in the formal hearing record. For instance, with the relocation of the Madison hearing office to GEF-1, I no longer have the option to review hearing files prior to the hearing even though I am a two minute drive from GEF-1.

Interestingly, the available records indicate that the Department actually began closing these offices within weeks of the 2018 governor’s election or even earlier.

So, either the current administration pushed for these closures as part of the transition from the prior administration to the current administration (doubtful) or the current administration is being handed a “story” by Department staffers that Secretary Frostman cannot figure out is a load of @#&!. Either way, these hearing office closures are “stories” that no one at the moment should accept.

Unemployment hearing offices in Wisconsin are closing

The Department of Workforce Development has yet to make any formal announcements, but three of four unemployment hearing offices in the state are moving or closing.

As of November 11th, the Madison hearing office has already re-located from the Wisconsin Public Broadcasting building just off of the Beltline to the downtown DWD headquarters in GEF-1.

As a result, no more in-person hearings are being scheduled in Madison, as there currently is no ability or procedure in place for having unemployment, in-person hearings at GEF-1. Neither can parties in Madison unemployment hearings review their case files prior to their hearings and examine documents available to the administrative law judge but kept from the parties (like adjudicator’s preliminary claimant reports).

Staff have been told that in-person hearings may eventually return to Madison in several months. That seems like wishful thinking, however. There simply is no ability or hearing room space in GEF-1 to run the hundreds if not thousand-plus hearings that normally occur.

In 2018, 16,691 unemployment appeal tribunal decisions were issued. If Madison issued a quarter of these, that is 4,173 appeal tribunal decisions for Madison (a conservative estimate, as Madison is probably responsible for at least two-fifths of all decisions in the state). If only 10% of these decisions are done via in-person hearings (an extremely small number, and one likely to be higher given how job growth in the state has been centered on Dane County), that is 417 hearings for which rooms in GEF-1 will be needed (or around eight hearings a week).

And, this number is just for employee benefit decisions. In 2018, unemployment tax decisions involving employers issued by administrative law judges numbered 223, and at least half of these were probably decided in Madison. So, add at least another 100 cases to the Madison docket that now need to be scheduled at GEF-1.

For comparison, in 2018 there were 219 equal rights decisions by administrative law judges. These cases are almost all heard in either Madison (in GEF-1) or Milwaukee. I understand from the equal rights division that scheduling of hearings at GEF-1 in Madison, where the Madison cases are heard, is tight. So, if less than 219 cases are causing scheduling problems at present at GEF-1, the addition of more than 500 cases to that schedule is simply impossible.

In other words, Madison will only be doing phone hearings for unemployment issues for the foreseeable future. If that should change, expect discrimination hearings to be delayed by months or years (as unemployment hearings need to occur within so many days under federal guidelines and so will have scheduling precedence).

But, the re-location of Madison is only part of the news involving hearing offices in Wisconsin. The even bigger news is that BOTH hearing offices north of Madison — Appleton/Fox Valley and Eau Claire — are being closed permanently. Sometime during the first quarter of 2020, these offices will be shut down. Staff who do not on their own initiative and resources relocate to Madison will be laid off.

The Department has yet to disclose this last piece of news publicly. Understandably, the folks north of Madison are not happy with this news. While phone hearings are common in these offices given the vast territory covered by the offices, many employers and a few claimants took advantage of the opportunity to review case files and attend their hearings in-person even if the other side still testified by phone.

Now, the option to attend their hearings in-person is completely foreclosed to everyone outside of the City of Milwaukee.

And, the reason cited for these drastic changes: declining funds for covering the administrative costs for managing the unemployment system in light of declining claims. Yes, claims have been on the decline for some time. But, the number of hearings has not declined in similar fashion, as the issues for which hearings are needed have increased even as claims have declined.

NOTE: While there were 16,691 unemployment benefit decisions by appeal tribunals in 2018, in 2016 these cases numbered 18,532. In 2014, these cases numbered 21,354. So, the number of decisions have obviously declined. Benefit claims, on the other hand, have plummeted to levels not seen since the 1990s, when the working population in Wisconsin was around a million less than it is now. Back then, Wisconsin still managed to fund more than two hearing offices.

NOTE: While the Department is claiming it is short on funds, as of October 2019, it had $13,122,000 available in its program integrity fund (and after pulling nearly $2.5 million from this fund that month). I know of no restrictions on how program integrity funds can be spent.

Closing of the offices north of Madison and the relocation of the Madison hearing office to GEF-1 for phone-only hearings is a tough pill to swallow for Wisconsinites. Rather than making the unemployment system easier to use, these steps only increase the complexity of the hearing process and make it nearly impossible simply to talk to someone directly about what happened with an unemployment claim.

NOTE: Because phone hearings take considerable planning and are difficult to manage, everyone should review the helpful advice about phone hearings in the Workers’ Guide to Unemployment Law.