Registration with Job Center of Wisconsin mandatory on Oct. 13th

Wisconsin DWD is beginning to institute a host of job search and registration requirements as part of the new budget law, Act 20, and the new unemployment law, Act 36.

The first of these requirements is that unemployment claimants who file initial claims on or after October 13, 2013, and who do not have their job search waived must also create and have active accounts on the Job Center of Wisconsin website.

DWD has created a FAQ about this registration requirement. You can also download a PDF of the FAQ as well.

Lack of computer access does not appear to excuse this requirement. And, this requirement remains regardless of other job search sites you might be using.

So, anyone who begins an unemployment claim or who must start searching for work on or after October 13th will need to register with the state’s official job search web site.  Failing to register will mean no unemployment benefits will be paid until the registration is complete.

Switch from google groups

Here is the message just posted at the Google group from where this blog originated:

Future posts on unemployment issues in Wisconsin will be at a wordpress blog called Wisconsin Unemployment.  Since I have been the only person posting to this group, it does not make sense to keep this group going.  Instead, I will start posting updates on unemployment issues at Wisconsin Unemployment.

Look for the posts there to start up fast and furious soon as I start to delve into all the new unemployment changes that were passed in June.

My good friend, Jessie Ramey at Yinzercation, suggested the switch to wordpress.

– Victor Forberger

New job search requirements go into effect

DWD has begun implementing the new job search requirements that went into effect with the budget act.

You now need to apply for work with four employers each week you claim benefits. And, you will need to keep these job search records for 52 weeks.

DWD has created a specific form — UCB-12 — for recording your job search efforts. You can download various versions of this form at this link.

Independent contractors in Wisconsin UI proceedings

Here is a brief I will be using for training purposes for the unemployment clinic here in Madison. It runs through the basic issues relating to deciding whether a claimant is an employee or an independent contractor. The test is still extremely difficult to meet.

Moreover, the case registers basic procedural and substantive problems with how independent contractor cases are currently handled in Wisconsin. Simply put, Wisconsin unemployment law leads to duplicate and unnecessary proceedings in regards to independent contractor determinations for both employees and employers in ways that are frustrating for both. While much is at present being changed in unemployment law in Wisconsin, real problems that the businesses and residents of Wisconsin have in regards to independent contractor issues and the ensuing long, complicated, and often unnecessary hearings over these issues are not even being mentioned.

In the case at issue in the brief, there was little at stake for either party, but four hours of hearings and now a LIRC appeal has taken place.

In this situation, both the claimant and the employer are probably justified in disputing how independent contractor law in unemployment cases are handled. The claimant in this matter has had to deal with DWD investigations not only for the $500 at issue in this case but $200 earned from serving in a chorus in a show. The employer is stuck with any of its freelancers being subject to UI taxes and an intrusive DWD examining all of its employees.

Until this portion of UI law changes once again, there are ways for making these kinds of cases a little less problematic and burdensome for all involved. What the attached brief does in part is demonstrate the circumstances and issues that employers and employees need to be aware of before simply fighting each other.

UPDATE available.

Short descriptions of the new UI changes in Wisconsin

Here is a table listing all of the UI changes at issue by bill and the effective date of the proposed change. In addition, here is a two-page description of the relevant changes in unemployment law.

Because the quit exceptions will matter for all determinations after January 5, 2014, and because many of those quit exceptions cover quits with secondary employers, I believe claimants should now presume these changes have already taken effect before quitting a job in the next few months.

For example, suppose a claimant quits a part-time job right now, loses his or her full-time job in February 2014, and subsequently files a claim for unemployment benefits. Because exception (7)(k), quit a part-time job, will no longer exist in February 2014, he or she will be disqualified from benefits unless he or she can show that the quit from the part-time job was for a good cause.

In other words, people who think that current law still applies are wrong. Instead, they need to act right now as if the proposed law is in effect. Only if they know they will not file an unemployment claim in
the next year and a quarter can they safely quit a second job today and not worry about the impact of that quit on unemployment benefits from their primary job.

Advisory Council — 2 May 2013 meeting — and legislative actions today

Belated notes on the last meeting of the advisory council and recent legislative events.

At this meeting, Jim Buchen for WMC was replaced by Scott Manley, a WMC VP.

The council then took action on the following items.

D-06 — Dep’t error redefined to exclude computer error / new COA for collection Approved by the council at this meeting after originally being declined.

D-08 — Claimants providing DWD with information
The council amended this proposal to make Wis. Stat. § 108.04(1)(hm) applicable to all information requests to claimants from the Department and to make restore claimants’ eligibility to the date of the original benefit suspension once the information is provided. There will no longer be a requirement that there be good cause for the delay. Wis. Stat. § 108.04(1)(i) is repealed.

Legislators items #25 (temp agency employment offers), #27 (Loan to cover UI interest), #28 (Holiday limits on UI eligibility), #30 (Link eligibility weeks to unemployment rate), and #31 (Additional tax brackets for high experience employers) were declined by the council. The council, however, also indicated that it had no objection to the bill already drafted that essentially implemented item #27.

WASS letter
The Council also considered a letter from the Wisconsin Association of Staffing Services to raise the current taxable base wage from $14,000 to $28,000 while effectively halving current tax rates and the Department’s response/analysis of that proposal. The short answer is that the Department finds that the higher taxable base wage would lead to greater revenues over the long-term. Low-wage employers would pay slightly less in UI taxes. Higher wage employers would most likely see a noticeable increase in their UI taxes.

Last week, LRB-drafted bills representing these recommended changes by the council were introduced and scheduled for committee hearings that took place today. A quick glance at the bill indicates that many of these changes will become effective on June 30th of this year.

In addition, the Joint Finance Committee took up the Department and Legislative proposals that the council did NOT adopt. WisPolitics Budget blog has what information is available to me:

> Here are some highlights of the UI package:
> -it would reduce payments to those on unemployment by $14.1 million
> in 2013-14 and $23.1 million in 2014-15 by changing rules regarding
> voluntary termination of work, misconduct and substantial fault, work
> search, and reduced partial benefits during holidays.
> -employers would pay $17.2 million more in unemployment taxes in
> 2014-15 and $32 million annually thereafter. But they would also see
> reduced interest payments to the federal government of $19 million in
> 2013-14 and $7 million in 2014-15.
> -the reduced interest payments would occur because the state would
> provide up to $30 million to pay interest on loans from the federal
> government to cover unemployment payments.
> – the state also could provide a loan of up to $50 million to the
> unemployment fund in 2014 to lower the tax rate employers pay as the
> state seeks to pull the fund out of the red. The federal unemployment
> tax administration credit, which lowers the rates employers pay if
> their states have positive fund balances, is calculated on Nov. 9 of
> each year. Because the state is expected to have a positive balance
> on that day, employers would avoid $191 million in additional taxes
> without the transfer.

This afternoon, these changes were approved on a party-line vote.

To see a description of the quit changes and the new substantial fault standard, see the relevant pages in this memo.

As many of you have suggested, some kind of training regarding all of these changes is needed. Given the extent of what is happening, I’m not sure where to start. June will be a busy month.

PowerPoint on UI financing

Here is a PowerPoint presentation from the February 6th meeting of the Advisory Council.

It has been difficult getting a copy of this presentation. The presentation explains that the current UI debt exists — in large part because the tax rate on employers has not kept pace with growth in the wages being paid to employees. This financing gap goes back to the early 1990s, but interest earned on the UI reserve fund covered up the problem during the 1990s. When interest rates declined in the 2000s, the fund balance declined and the 2008 recession emptied it completely.

The recommended fix is not easy. It involves raising the base wages that are taxed for unemployment purposes (currently $14,000) to a higher amount based on maintaining a certain balance in the trust fund to cover possible emergencies. In other words, the amount of taxable wages would vary as the balance that had to be maintained changed.

Advisory Council Meeting — 18 April 2013

At the Council meeting, the members took up the legislative proposals announced in an April 1st letter to the Council. The proposals contain endorsements of the DWD proposals as well as additional changes to the state’s unemployment system.

As part of that consideration, DWD prepared two documents. One document set forth a colored 11 page chart listing both DWD and legislative proposals, what action the Council had taken so far, and  estimated UI system savings for each DWD and legislative proposal.

The other document is a 20 page memorandum discussing the legislative proposals by item number. DWD briefly then went through the legislative proposals by item number that were separate from DWD’s own proposals.

The legislators want DWD to create a handbook for employers explaining unemployment for both employer and employee with a signature page to show employee receipt of that handbook (NOTE: the employer also signs, but that parallel feature offers illusory balance, since the employer is the one who will be presenting the handbook to the employee to sign and I doubt any employee has ever asked or could ask an employer if it knows and understands its UI obligations).

DWD said additional revisions to its already available employer handbook were not a problem, and a signature page on the DWD employer handbook for employees to sign to show that they received an employer handbook could be added as well. A common issue in hearings is an employee who denies seeing the employer handbook, and the employer has no signature page or other proof to counter the employee denial.

My concern here is there may well be two employer handbooks now: one written by the employer and one written by DWD. DWD seems to suggest that a signature page on the DWD handbook can count as proof for seeing both documents. I am not sure a single signature page for two documents can carry that evidentiary burden.

In any case, the Council approved this proposal.

The legislators propose that an employer receive contact info of claimants drawing on the employer’s account so that employment can be offered to those claimants.

DWD flagged this proposal as creating a conflict with Dep’t of Labor confidentiality requirements

The Council declined to endorse this proposal.

The legislators want a database of ALJ decisions created and to mandate additional training and CLE for ALJs.

DWD explained that ALJs have issued ~25,000 decisions a year over the past few years, and so such a database would be a huge undertaking. DWD pointed out that ALJ decisions are not binding precedent while LIRC decisions are and that a database of important LIRC decisions are already available to ALJs and the public. DWD recommended that the legislation:

direct LIRC to update its already existing database of decisions and develop a list of commonly decided issues and then for each issue select LIRC decisions to include in a database of search-able cases and redact from these cases any information that would reveal confidential information about the parties to the decision.

At the suggestion of DWD, the Council modified this proposal to follow the DWD recommendation.

I’m perplexed at this development, as an unemployment law outline of UI issues by LIRC is already available. What else is LIRC supposed to do here?

There was no public discussion of ALJ training at the Council meeting, so here is some basic information. Each year in the fall, DWD and LIRC conduct a couple of days of training. The Dep’t of Labor also mandates standards for how hearings are conducted, and cases for each ALJ are randomly sampled to make sure that ALJs are meeting those standards.

I have also heard through the grapevine that DWD is reviewing ALJ decisions to determine if an ALJ is favoring one side or another. So, ALJs who have decided too many cases for claimants are being told, for
example, that 60% of claimants are winning cases decided by that ALJ and that is too high. There are no complaints about employers winning too many cases to ALJs that I have heard of, and the percentages of too many decisions favoring claimants have, as far as I have heard, not gone higher than 60%.

As any judge might explain, the percentage of cases one side generally wins is immaterial to how a judge decides the case in front of him or her (imagine if defendants were expected to win 50% of criminal cases). Bringing these percentages to the attention of ALJs and indicating the ALJs are biased and need to correct themselves suggests the kind of political pressure that raises very troubling due process concerns.  See, for example, this news from Maine.

The legislators want to end UI eligibility for those who are on work release.

This situation applies to individuals on work release who are transferred to another facility and no longer have access to the work release employer. Since the transfer is not the fault of the claimant, he or she can continue to collect benefits until a new work release job is found.

DWD explained that the proposal would require a modification of the definition of employment to add work release as excluded employment.

The Council adopted this proposal.

I guess that the working assumption here is that those on work release are not spending much money in the first place, so the availability of UI benefits is not that important for these folks. As those in prison may have families, this assumption does not hold much water and seems little more than an opportunity to kick a few individuals who might qualify for UI in these circumstances off of the UI roles.

The legislators propose that DWD create an on-line fraud complaint system for employers.

DWD pointed out that a web form for fraud complaints currently exists but adds that it will try to make the process easier.

The Council adopted this proposal with the understanding that fraud reporting applies to both employees and employers.

The legislators proposed that if on 9 November 2014, the loan fund balance that is owed is less than $50 million, DOA loan the fund the amount to cover that shortfall. With no negative balance then, the employer’s FUTA tax credit will return to the lowest rate of 0.6%.

DWD explained that the legislation to accomplish this goal has to be approved by the Dep’t of Labor (to avoid simply shifting debt around and actually reducing that debt) and that a fundamental requirement for this loan is that it be interest-free.

The Council adopted this proposal.

The legislators want improvements in how employers can find out how their reserve balance is changing.

DWD explains that it wants to give employers better and improved access to their account information.

The Council adopted this proposal.

The legislators want DWD to conduct random audits of regular UI claims similar to the audits of EUC claims recently required in the 2012 Middle Class Tax Relief and Job Creation Act.

DWD explained these audits could be a massive undertaking, involving anywhere from 50 to 1500 claims a week if the same audit percentage for EUC benefits applies to regular UI claims. DWD also explained that it already has the authority to conduct these audits, and so no additional legislative authority is needed.

DWD added that planned changes claimants’ weekly claim certifications will make such audits easier. For instance, when the number of required job searches jumps from two to four, DWD will require claimants to report each week the four employers to whom they applied for work rather than just answering yes to the question that they searched for work.

The Council adopted this proposal.

The legislators recommend changes to when DWD has to produce its fraud report, its financial outlook report, and its activities of the Council report.

DWD proposes March 15th, April 15th, and May 15th as the new deadlines for these respective reports.

The Council adopted this proposal.

The legislators recommend eliminating extended training benefits.

Extended training benefits are available to individuals who exhaust their eligibility to any and all other UI benefits (regular, EUC, EB, and various training benefit programs).

DWD indicates there is no conflicts with federal requirements for ending this program.

The Council adopted this proposal.

The legislators propose that employees who previously worked for a temp agency be required to contact that temp agency as part of their weekly job search.

DWD explained that federal requirements do not preclude this requirement but that it is administratively complex to implement, such as making claimants who might have worked for a temp agency a year ago aware of this contact requirement, how would temp agencies notify DWD about claimant compliance, and for how long would this requirement continue.

Additionally, this proposal would give temp agencies that want to game the UI system by disqualifying claimants an added mechanism and an incentive for doing so. First, when an assignment with a temp agency ends claimants currently are required to ask the temp agency for a follow-up assignment. So, temp agencies currently have the means to find new work for their employees when an assignment ends. This proposal essentially burdens temp agencies with additional assignment requests that the agency may not want to deal with. Second, this proposal essentially makes claimants indentures to temp agencies who keep offering job offers to claimants as a way to kick claimants off of UI. Claimants need to accept every job offer they receive or show that the job offer was unreasonable in some way to retain eligibility for unemployment benefits. Investigations for every declined job offer will not only use up DWD resources but delay benefit payments while the investigations occur. Third, after a year or two, temp agencies that get employees off of their UI roles will have a competitive advantage
over other temp agencies that do not jettison their employees.

The Council declined this proposal.

The legislators propose that DWD create a standardized witness affidavit form that would be presumed admissible in UI hearings.

DWD explained that such a form would still not create the substantial and credible evidence for supporting a finding of misconduct in the face of a claimant’s denial of the misconduct in question. Still, DWD indicated that it could create such a form (and the form would need to be available to both employers and employees). What might be more useful, it was suggested by one council member, was that if DWD created a layman’s guide of evidence.

The Council adopted this proposal.

The legislators propose that a loan of $19 million in 2013 and $7 million in 2014 to pay the interest on loan amounts so that employers are not taxed an additional amount to cover that interest.

Sen. Liebham has already had the LRB draft legislation — LRB 1636/2 — that provide a $26 million loan to cover any interest due prior to 1 July 2015.

For DWD, either proposal is doable.

The Council declined this proposal.

The legislators propose that legal holidays not be available to claimants on their weekly claims.

It is unclear what the legislator mean with this proposal. DWD concludes after conferring with some of the legislators that the proposal concerns employees collecting unemployment benefits and who worked for an employer who is typically closed on legal holidays. The proposal then would essentially reduce the hours of work needed that week for the employee to be declared a full-time employee from 32 to 24 (typically, an employee who works 32 or more hours a week is considered to be full-time and disqualified from any unemployment benefits that week).

To implement such a proposal, DWD would need to determine what holidays are covered and for employers to notify DWD about the holidays for which they are closed.

For me, it is unclear why employee eligibility with another employer should be based on a work week with a prior employer. And, I fail to see how this proposal has any applicability to claimants who previously worked part-time positions.

The Council declined this proposal.

The legislators want employers to be notified when a claimant lists that employer as one of their job search contacts/applications.

DWD explains that this proposal likely runs afoul of Dep’t of Labor confidentiality requirements.

The Council declined this proposal.

The legislators propose that eligibility weeks for unemployment benefits be reduced when the unemployment rate declines and likewise that the number of benefit weeks increase when the unemployment rate increases.

DWD shows that Florida has already adopted such a change, and other states are in the process of developing a similar linkage. In Florida, the number of benefit weeks for a calendar year is set according to the unemployment rate in the 3Q of the previous calendar year. Because of the reduction in benefit weeks for regular unemployment compensation, there would also be comparable reductions in EUC and EB benefits if claimants were otherwise eligible for those benefits.

If this proposal has been in effect in Wisconsin in 2009, then the number of benefits weeks available that year would have been reduced. For example, with the number of benefit weeks available in 2009 set as in Florida according to 2008 unemployment rate numbers, claimants would only have been eligible for 12 weeks of regular unemployment benefits in 2009 rather than 26 weeks. There also would have been cuts to EUC and EB benefit weeks that claimants received in 2009.

There is also no known correlation with changes in the unemployment rate and employer hiring (see the state jobs report for November 2011,). Different surveys are done for the unemployment rate and for hiring because these numbers represent very different measures of labor market activity. So, the only economic basis for making this correlation is to reduce the number of available weeks for unemployment benefits without making an across the board cut.

The Council declined this proposal.

The legislators propose that four additional tax brackets beyond -6% be created for employers with higher numbers of unemployment claims (rather than having their tax rates currently capped at the -6% rate). The result would lead to employers with higher unemployment claims paying more in unemployment taxes than they currently pay.

DWD presents charts showing how unemployment taxes for affected employers would rise and how much additional income to the unemployment trust fund is likely.

This proposal essentially creates an added incentive for employers to get their former employees off of unemployment. I also wonder how many employers with such high unemployment rates are economically viable. If an employer goes out of business, there no longer is any payroll to tax for unemployment purposes and so nothing to collect no matter what the rate is. Certainly with the last recession there was a steep decline in collections in 2009, and not until 2011 did tax collections begin rising.

The Council is still considering this proposal.

The legislators want to fund three additional DWD employees from the state’s general funds for fraud investigation (the costs for administering the unemployment system is covered by a federal/FUTA tax).

DWD indicates that it is committed to finding and stopping fraud and that the total cost for these three positions is $314,560.

The Council adopted this proposal with the understanding that the fraud at issue is both employee and employer fraud.

The legislators want to end all eligibility for unemployment benefits to those that lose a license needed for their job.

At present, an employee who is at fault for the loss of his or her license and so cannot do the job is disqualified from benefits for five weeks.

Instead of this blanket denial of benefits, DWD explains that the proposal would tighten up standards for determining fault, increase the penalty weeks from five to six, and keep the wages from the employer
from being used to calculate the former employee’s benefit year.

Wis. Stat. § 108.04(1)(f) — the loss of license provision — already provides for much of what is being asked for:

If an employee is required by law to have a license issued by a governmental agency to perform his or her customary work for an employer, and the employee’s employment is suspended or terminated because the employee’s license has been suspended, revoked or not renewed due to the employee’s fault, the employee is not eligible to receive benefits until 5 weeks have elapsed since the end of the week in which the suspension or termination occurs or until the license is reinstated or renewed, whichever occurs first. The wages paid by the employer with which an employee’s employment is suspended or terminated shall be excluded from the employee’s base period wages under s. 108.06(1) for purposes of benefit entitlement while the suspension, revocation or nonrenewable of the license is in effect. This paragraph does not preclude an employee from establishing a benefit year using the wages excluded under this paragraph if the employee qualifies to establish a benefit year under s. 108.06 (2) (a). The department shall charge to the fund’s balancing account any benefits otherwise chargeable to the account of an employer that is subject to the contribution requirements of ss. 108.17 and 108.18 from which base period wages are excluded under this paragraph.

So, the only real change in this proposal is an additional penalty week and a un-described change in the fault standard. To understand how fault in these circumstances is currently handled, see Ellefson v. Marathon Mail Service Inc, Hearing No. 11005186MW (13 June 2012). I cannot discern how the fault standard might be changed unless some kind of strict liability standard or simple negligence standard regarding loss of license is being introduced here.

The Council adopted this proposal only to the extent that any benefits paid to a claimant who loses a license but otherwise regains eligibility are paid out of the balancing account rather than an employer’s  account. As noted already, this issue is already in current law. So, I am unsure of what the Council concluded here.