Advisory Council meeting in September 2021

At the September 16th Advisory Council meeting, a new employer representative appeared, as David Bohl, general counsel to J. H. Findorff & Sons, replaced John Mielke of ABC-Wisconsin.

Note: As of October 18th, however, John Mielke is still listed as a council member.

At this meeting, the Department provided the following information to council members:

• A letter from Secretary-designee Pechacek asking the Advisory Council to approve another program integrity assessment (estimated to be $3.3 million). Left out of this letter is that the program integrity fund, as of August 2021 (see line 228), already has $19,444,000. Regardless, the council approved of this additional assessment.
• Presented SB545, a proposed bill to legalize marijuana. Under this bill, employees who test positive for marijuana use and who are then discharged would not be disqualified from receiving unemployment benefits.
• Presented SB547, a proposed bill to allow people who refuse vaccinations to qualify for unemployment benefits (discussed here).
• Introduced a future emergency regulation (now available as EmR2125) that extends the time for recharging of unemployment benefits to employers’ accounts or the balancing account until 30 June 2022 and continues to waive any interest charges for reimbursable employers. After caucus, Council members voiced their support for this new emergency regulation. In general, charging relief for pandemic-related job losses needs to be requested because only a few kinds of job losses are presumed to be pandemic-related. But, the deadline for those requests expired as of 14 May 2021. Only for new, back-dated pandemic-related claims are charging relief requests still viable,
• A draft of the proposed unemployment bill, based on what council members previously agreed on at their August 2021 meeting.
• An updated research response addressing management concerns raised at the August Council meeting regarding the labor reps’ proposed increase in the weekly benefit amount.

The Financial Report for this month indicates that benefit payments are now around half of what they were a year ago, that the unemployment taxes employers pay continue to decline because of fewer claims being paid, and that the unemployment trust fund balance was nearly $950 million.

At the end of the meeting, Council members informed the Department that the remaining Department proposals would NOT be enacted and that agreement on the labor and management proposals was not likely as well.

Still more money for program integrity

Program integrity at the Department of Workforce Development is about to get a big infusion of cash.

NOTE: While program integrity is intended to examine employers who mis-classify their employees as independent contractors, the main focus has apparently always been on charging employees with unemployment fraud. I make this claim because: (1) my numerous dealings with program integrity investigators has always been on behalf of employees charged with unemployment concealment, never on behalf of employers charged with mis-classified employees, (2) for unknown reasons, reports to the Advisory Council about the Department’s worker mis-classification efforts have always been done orally, (3) those oral reports have never indicated that the entire scope of this program is being described, (4) Department publications in 2017 about its program integrity efforts only have information about claimant concealment and not actual mis-classification efforts, and (5) reports from Department insiders indicate that “program integrity” is a widespread effort toward identifying alleged claimant concealment that includes both specific employees solely focused on program integrity and an additional job duty for all of the Department’s claimant investigators and adjudicators.

Recall that the 2015 unemployment changes in 2015 Wis. Act 334 included two provisions that essentially created a slush fund available to the Department for its “program integrity” efforts.

At the 21 September 2017 meeting of the Advisory Council, Secretary Allen requested and the council approved enactment of this assessment. As the financial report at that meeting indicated unemployment tax receipts amounted to $581.7 million, this tax diversion to program integrity will bring in around an additional $58,170. These funds are on top of the $1.63 million transferred to program integrity in proposal D17-08 that is now part of SB399. SB399 is awaiting the governor’s signature.

NOTE: The Department’s 2017 proposed changes to unemployment law which are now part of SB399 are discussed here.

The Department is running the table.

The first of the DWD-sponsored proposals have appeared in legislation

At the 12 October 2015 Advisory Council meeting, the council gave final approval to the following proposals:

• D15-10 — eliminating the publication of the claimant benefit tables within the statutes,
• D15-11 — changes to circuit review review previously described here,
• D15-12 — allowing the same protocols for unemployment taxes in regards to fiscal agents in adult care to apply to fiscal agents in child care situations, and
• D15-13 — ending the sunset date in 2034 for the program integrity fund (i.e., the fund for receiving some of the monies from concealment enforcement) since the Department now expects concealment monies to continue in perpetuity.

Previously, the council had approved the following Department proposals:

• D15-02 — adding the ability to issue determinations against out-of-state employers in combined wage claims for being at fault for an erroneous benefit payment to a claimant,
• D15-03 — applying the Treasury offset program to employers, as described previously in this post, and
• D15-07 — changes to how work share benefits are calculated so as to comply with federal requirements for work share programs.

With the legislature currently in session, these three proposals — D15-03, D15-07, and D15-02 — have appeared in bills AB416 and SB341. The legislature will most likely enact these provisions shortly.

Several Department proposals, however, remain in limbo or are still being debated. The council has extensively discussed D15-04 in regards to setting up essentially a backup insurance program for reimbursable employers who get their unemployment accounts swindled by identity fraud (and so have little to no hope of ever recovering the stolen benefits). The final recommendation from the council was for reimbursable employers to be taxed initially in order to create a fund of $1 million for covering themselves against identity fraud, essentially the second option of the three presented. Proposal D15-05 was to correct a hole in the statutes that accidentally left LLPs out of the definition of employer (see also this DWD memo on this issue). Appeals modernization, D15-06, continues to be discussed by council members. Perhaps the most significant change in this proposal — notice by Internet in place of postal mail — has NOT received any discussion of comment from council members, however. On the other hand, there has been no word on D15-09 — distinguishing able and available determinations from separation determinations — since this proposal was introduced at the 19 May 2015 council meeting. Finally, the proposed changes to the definition of concealment in D15-08 (described in this previous post) may be discussed again at subsequent council meetings.