Recap of the 2020 public hearing

There is already a heart-wending report about unemployment problems described at this public hearing.

Note: The news article, however, continues to report the Department’s weekly claims data — 74,000 claimants — as the number of still outstanding claims. As many of the people who testified at the public hearing, those waiting includes those waiting for a hearing, which is a three to five month process right now (and getting longer). So, the actual number should be those who are waiting for a payment period. And, that number is at best 150,000 to 200,000.

Given that many of the issues have already been covered here, here are some links to those looking for answers raised at the hearing.

The Department’s general hostility to claimants

Numerous attendees indicated that Department staffers are hostile to claimants by always doubting what is being told to them, and that the whole process is simply dehumanizing. More than few attendees had to stifle tears in the midst of their testimony, in light of their anguish and desperation.

Questions cannot be answered, these attendees indicated, and answers when provided are too often contradictory. As one attendee described, the burden of proof is on her, and she is presumed to be attempting to scam the system until she can show by clear and convincing evidence that her claim for unemployment benefits is forthright.

The picture painted in this testimony is a Department no longer functioning as an unemployment agency but instead as a kind of welfare office trying to correct the “immorality” of claimants who want unemployment benefits rather than a job.

Delays

Numerous attendees described enormous delays of three to five months with their claims (see below for how long claimants can currently expect for their claims to be heard after appealing a denial).

Apparently forgotten by everyone is the Supreme Court decision in Cal. Dep’t of Human Resources Development v. Java, 402 U.S. 121, 91 S.Ct. 1347, 28 L.Ed.2d 666 (1971). Java concerned a hold placed on payment of unemployment benefits when an employer contested claimant eligibility. First, the court described the investigatory process:

A claimant, appearing at an unemployment insurance office to assert a claim initially is asked to fill out forms which, taken together, indicate the basis of the claim, the name of the claimant’s previous employer, the reason for his unemployment, his work experience, etc. The claimant is asked to return to the office three weeks later for the purpose of receiving an Eligibility Benefits Rights Interview. The issue most frequently disputed, the claimant’s reason for termination of employment, is answered on Form DE 1101, and the Department immediately sends copies of this form to the affected employer for verification. Meanwhile the employer is asked to furnish, within 10 days, ‘any facts then known which may affect the claimant’s eligibility for benefits.’ Cal.Unemp.Ins.Code §§ 1327, 1030. If the employer challenges eligibility, the claimant may then be asked to complete Form DE 4935, which asks for detailed information about the termination of claimant’s previous job. The interviewer has, according to the Local Office Manual (L.O.M.) used in California, the ‘responsibility to seek from any source the facts required to make a prompt and proper determination of eligibility.’ L.O.M. s 1400.3(2). ‘Whenever information submitted is not clearly adequate to substantiate a decision, the Department has an obligation to seek the necessary information.’ L.O.M. § 1400.5(1)(a). This clearly contemplates inquiry to the latest employer, among others.

The claimant then appears for his interview. At the interview, the eligibility interviewer reviews available documents, makes certain that required forms have been completed, and clarifies or verifies any questionable statements. If there are inconsistent facts or questions as to eligibility, the claimant is asked to explain and offer his version of the facts. The interviewer is instructed to make telephone contact with other parties, including the latest employer, at the time of the interview, if possible. L.O.M. § 1404.4(20). Interested persons, including the employer, are allowed to confirm, contradict, explain, or present any relevant evidence. L.O.M. § 1404.4(21).

The eligibility interviewer must then consider all the evidence and make a determination as to eligibility. Normally, the determination is made at the conclusion of the interview. L.O.M. § 1404.6(2). However, if necessary to obtain information by mail from any source, the determination may be placed in suspense for 10 days after the date of interview, or, if no response is received, no later than claimant’s next report day. L.O.M. § 1400.3(2)(a).

Java, 402 US at 126-7. Obviously, claimants in Wisconsin are reporting an investigatory process that is nothing like what is described here. Few claimants are having any contact with the Department adjudicators before their claims are denied. And, claimants then have to wait until a hearing and getting a hearing packet in the mail to learn why the Department actually decided to deny their unemployment benefits in the first place.

Note: Indeed, most claims denied in Wisconsin have nothing to do with an employment separation. Rather, the main reason are the claimants’ failure to satisfy Department mandated claim-filing requirements, as non-separation denials have sky-rocketed over the past decade, even as separation denials have declined to under 20% of all claims filed:

Wisconsin denial rates

The Court then went on to explain why unemployment was started and how the requirement for paying benefits “when due” in federal law was set:

On the basis of 1922-1933 statistics, it was estimated that 12 weeks of benefits could be paid with a two-week waiting period at a 4% employer contribution rate. The longest waiting period entering into the estimates was four weeks, indicating an intent that payments should begin promptly after the expiration of a short waiting period.

Other evidence in the legislative history of the Act and the commentary upon it supports the conclusion that ‘when due’ was intended to mean at the earliest stage of unemployment that such payments were administratively feasible after giving both the worker and the employer an opportunity to be heard. The purpose of the Act was to give prompt if only partial replacement of wages to the unemployed, to enable workers ‘to tide themselves over, until they get back to their old work or find other employment, without having to resort to relief.’ Unemployment benefits provide cash to a newly unemployed worker ‘at a time when otherwise he would have nothing to spend,’ serving to maintain the recipient at subsistence levels without the necessity of his turning to welfare or private charity. Further, providing for ‘security during the period following unemployment’ was thought to be a means of assisting a worker to find substantially equivalent employment. The Federal Relief Administrator testified that the Act ‘covers a great many thousands of people who are thrown out of work suddenly. It is essential that they be permitted to look for a job. They should not be doing anything else but looking for a job.’ Finally, Congress viewed unemployment insurance payments as a means of exerting an influence upon the stabilization of industry. ‘Their only distinguishing feature is that they will be specially earmarked for the use of the unemployed at the very times when it is best for business that they should be so used.’ Early payment of insurance benefits serves to prevent a decline in the purchasing power of the unemployed, which in turn serves to aid industries producing goods and services. The following extract from the testimony of the Secretary of Labor, in support of the Act, describes the stabilization mechanism contemplated:

I think that the importance of providing purchasing power for these people, even though temporary, is of very great significance in the beginning of a depression. I really believe that putting purchasing power in the form of unemployment-insurance benefits in the hands of the people at the moment when the depression begins and when the first groups begin to be laid off is bound to have a beneficial effect.

Not only will you stabilize their purchases, but through stabilization of their purchases you will keep other industries from going downward, and immediately you spread work by that very device.’

Java, 402 US at 131-3 (footnotes omitted). Accordingly, the court held:

Paying compensation to an unemployed worker promptly after an initial determination of eligibility accomplishes the congressional purposes of avoiding resort to welfare and stabilizing consumer demands; delaying compensation until months have elapsed defeats these purposes. It seems clear therefore that the California procedure, which suspends payments for a median period of seven weeks pending appeal, after an initial determination of eligibility has been made, is not ‘reasonably calculated to insure full payment of unemployment compensation when due.’

Java, 402 US at 133 (footnote omitted). Notice that, for the court, “delaying unemployment compensation until months have elapsed defeats” the purpose of unemployment. So, these months-long delays in payment of unemployment benefits in Wisconsin is, under Java, a violation of federal law.

Covid-19 quarantine

A few attendees spoke about having trouble getting benefits after being told to stay home because of concerns with Covid-19. Others talked about child-care problems created by the pandemic.

The main point of PUA benefits is the pandemic, and there are specific provisions that allow benefits in the following circumstances:

  • (aa) the individual has been diagnosed with COVID–19 or is experiencing symptoms of COVID–19 and seeking a medical diagnosis
  • (bb) a member of the individual’s household has been diagnosed with COVID–19
  • (cc) the individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID–19
  • (dd) a child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work

These are all simple and obvious criteria. But, the Department is NOT applying this criteria in a simple, open, and straightforward fashion or contacting claimants with helpful inquiries that would allow the immediate payment of benefits. Rather, what is happening is that these claims are being heavily scrutinized for any discrepancy or misstatement that allow for a denial of benefits. So, folks end up having to appeal and wait. And wait. And wait some more for a now backlogged hearing process.

Note: In September, I indicated that the hearing process was then taking a month just to process an appeal of an initial determination. That delay is now around six weeks. The actual hearing is now taking another three to four months. In other words, getting a claim denied (which has been taking several months to begin with), will as of mid-November 2020 take another four to six months to correct. I know of claimants that have been waiting since March 2020 for their unemployment benefits, and many still do not even have a hearing scheduled.

And, for those that are getting their claims denied right now: after waiting eight months, you can expect to wait another four to six months for a hearing on your unemployment claim. Not good at all.

Language and technology barriers

A few attendees described the access barriers to claims-filing in Wisconsin. UIPL 02-16 (1 Oct. 2015) indicates that Wisconsin should have at a minimum more than one way to file a claim (phone, on-line, and in-person are the options) and that multiple languages need to be available when the working population depends on multiple languages.

Wisconsin for some years now has been in violation of these standards. Current claim-filing processes and questions are available here.

Again, in a state where broadband access is extremely limited, it makes absolutely no sense to have an on-line only claim-filing system. And, the fact that this system is inaccessible because of language barriers as well as to those with other disabilities have been longstanding problems.

SSDI and how to report eligibility for full-time work

One SSDI recipient testified about how she cannot work full-time and so was being wrongly denied when she answered a claims question truthfully by saying she cannot work full-time.

Obviously, she considered full-time work to be akin to 40 hours in a week. But, for unemployment purposes, full-time work varies from worker to worker.

As noted here, the question is legally wrong, as eligibility for full-time work is defined by how much work an individual is actually capable of doing. So, this attendee should have answered “yes” to being available for full-time work, if she could do what she was physically capable of, even if that work was only ten hours a week. As the question does not actually follow state law, however, it does not provide correct legal guidance.

Winter work search waivers

A few attendees testified about the lack of winter work search waivers. Given how the Department has previously ignored this concern, do not expect a sudden change now.

The PUA vs. regular UI problem

Several attendees described being tossed back and forth between regular unemployment benefits and PUA benefits. Those approved for PUA benefits are now being told by the Department to repay those benefits because they potentially qualify for regular unemployment benefits.

This problem is one issue that is not unique to Wisconsin, as it is present in most states at the moment.

By law, PUA benefits are only supposed to be paid out if a claimant has no eligibility for regular unemployment of any kind (which includes PEUC and EB benefits, as well as regular unemployment benefits that could potentially exist in another state).

The Department, however, is doing little to nothing to educate claimants about these issues. In the midst of this pandemic and with no work or income in sight, folks are simply desperate for any kind of unemployment assistance and do not have the time or legal expertise to decipher the kind of support they are receiving — regular, PUA, PEUC, or EB — and when or how that support should switch over to another program.

But, the Department is making claimants responsible for all of this information by determining at some later date when and how an alternative benefit source should have been applied and demanding immediate re-payment of the thousands of dollars under the prior unemployment program/benefit.

This penalizing of claimants for not switching from PUA to EB or PEUC benefit programs at the right time by ordering repayment of all benefits shocks and confuses claimants who receive these notices and stifles the very goal of economic stimulus at the heart of these programs.

Yet, these repayment demands are essentially administrative accounting problems inherent with the state unemployment agency that ultimately is responsible for adjusting the source or category of an individual’s benefit payments.

Essentially, because the state is responsible for transferring the claimant from one benefit program to another, claimants should not be on the hook for repayments connected to these administrative accounting issues. Instead, states should be responsible for these administrative transfers themselves, and any amounts due because of states’ failure to act promptly on these issues should be forgiven as far as claimants are concerned. At the very least, the Department should be explaining that, for example: while PUA benefits need to be repaid, the claimant will instead receive regular unemployment benefits for the same weeks, resulting in no over-payment or an over-payment of just $X amount, which will be recovered in installments against future unemployment benefits paid out.

But, that kind of advice would probably be deemed as being too helpful.

Don’t despair

This advice about how to get actual information about your claim and financial help should continue to be relied on.

For claimants, the Department’s portal continues to be less than useful except for two issues. See this post about how to get the two useful kinds of info — actual decision documents and payment benefit history — out of your portal.

Note: Do NOT ever conclude that your portal sets forth an accurate and historical record of activity relating to your claim. Department reports regarding your claim WILL change based on how the Department staffers characterize events, and so even claim approvals can “disappear” from your claim-history. Get PDFs when they appear in your document history or your benefit payment history and hand on to those documents. A year from now, the Department may deny, for instance, that you were ever approved for unemployment benefits and that you falsely claimed being laid off when your employer says you quit. If you did not retain that initial determination originally approving your claim for being laid off, you will no longer find that document when now being charged with fraud for claiming a layoff when you supposedly quit. Again, get PDFs of your unemployment documents and hang on to them for dear life. The Department, after all, has a profit incentive in turning the tables on you at some future date.

Unemployment public hearing in 2020

The last public hearing in 2018 was a tepid affair, and the 2016 public hearing led to an avalanche of testimony about winter work search waivers but no changes in unemployment whatsoever.

So, a public hearing in the midst of this pandemic is nothing to be excited about. In light of the pandemic, this hearing is split across two days and takes place via webex, a difficult on-line conferencing tool that is great in corporate environments but a pain to use across numerous platforms and technologies, especially where broadband access is limited. Here, for example, is the help Department offers for the toll-free number.

Today’s session was less than remarkable. Besides myself, there were about 25 observers and 12 witnesses (a 13th never managed to get her computer audio working, a common issue with webex). In lieu of providing basic information about the claim-filing process or even some sympathy to those describing their frustration, the Department’s representatives maintained that they could provide no information in response to such queries, even general queries, and was solely there to listen to public testimony.

And, if participants did not connect on right at 2pm (the scheduled start of today’s hearing, which was supposed to last until 4pm), they may have found no connection whatsoever. The Department abruptly ending the public hearing at 2:49pm when there no more speakers who had not yet testified.

Note: There does NOT appear to be any legal basis for ending a public hearing simply because no one from the public is currently in attendance. In-person public hearings continue for the entire scheduled time, as participants may well have planned to arrive at a certain time rather than appear immediately at the beginning. By ending this hearing prematurely before the scheduled ending time of 4pm, the Department violated its own notice for this meeting.

You can still register for the session tomorrow, Nov. 10th, from 4:30-6:30pm.

At the very least, you can voice your displeasure at the crazy delays in processing claims, the problematic portal the Department provides to claimants, continuing discrimination against the disabled, or the Department’s failure to provide the actual questions you are asked when filing a claim.

Just do not expect at the moment that someone will respond to those concerns.

Advisory Council meeting — 17 Jan. 2019

After a break for the November elections, the Advisory Council met on January 17th to meet the new secretary, Caleb Frostman, and review events of the last few months.

The financial report was eye-popping and will be addressed in its own post. Here is what was covered outside of the financial report.

Mis-classification of employees

Mike Myszewski reported on the Department’s efforts in preventing the mis-classification of employees.

Note: These reports continue to be made orally and have NEVER appeared in writing. Given the Department’s annual report on alleged claimant fraud and the numerous charts and reports on alleged claimant fraud that appear at these meetings, it begs the question why the Department cannot at a minimum put down on paper in some way what it is doing to combat alleged employer unemployment fraud.

In any case, given that this report consists entirely of what was said, some of my numbers may be off. In addition, the exact nature and scope of this data is unknown, as this data is simply not available to the public and the Advisory Council apparently does not ask for it.

Mr. Myszewski reports that the Department has recovered $2.1 million in unemployment taxes from employers because of mis-classification for 1222 employees, or about $347 per mis-classified employee.

This recovery arose from 511 investigations in the last fiscal year, and there had been 145 investigations so far in the current fiscal year.

There were NO questions from the Advisory Council about this report.

The 15 Nov. 2018 public hearing

As compared to the public hearing in November 2016 in which there were 300+ comments from 295 individuals, at the 2018 public hearing there were only 21 comments in toto. Given these few comments, the summary presented to the council at this meeting included not only a summary but the actual 21 comments that were made.

Not surprisingly, work search waivers were again the hot topic. Here are some of those work search comments as well as others:

Karen, HR manager

“Moving onto the standpoint of someone who worked for UI, I think that customer service should be more of a priority for claimants and employers alike, but especially claimants. I get that there are some people that play the system, but overall, the claimants are not the enemy. The poor customer service is evidenced by the outrageous wait times when claimants call in, (but the employer hotline is answered in a couple of rings), not being clear on the number to call to get assistance, not posting the adjudication centers’ phone numbers or street addresses, and the legalese that is not easily understood by the average person in documents (which would not present as much of a problem if the claimants could easily contact someone who could help explain it to them).”

Krista, claimant

“[After describing various education and training actions that should count as job searches:] I understand that the State wants people off UI and back onto to work as soon as possible, but sometimes education and building of new skills are needed before people can do that. Just because it isn’t an application to a job, it does not make these actions any less of a job search function.”

Anonymous

“[After requesting that property liens that the Department uses for its debt collection efforts no longer be visible to the public via court records, she explains:] I have my Masters degree in Business. I have an undergraduate degree in Nursing. The ridiculous time consuming hoops I jump through to ‘prove’ I’m looking for a job are ridiculous. $370/wk doesn’t cover my bills and no one is looking harder for my job than me. As opposed to making people sit in some 4 hour class — where I can assure you that people like myself who have been working since 14 will get nothing from it.”

United Migrant Opportunity Services

“Over 11,000 claimants were accused of concealment in 2014. When appealed, over 70% were overturned, and another 8% remanded, It would appear that the Department is alleging concealment in many cases where a more thorough review of the evidence does not support that finding.”

Scott, building services employer

Unemployment benefits should be limited to 4 to 8 weeks. [Note: Currently, claimants are eligible for up to 26 weeks of benefits, and winter usually lasts a minimum of 14-18 weeks for those who go through seasonal layoffs.]

Tawana, claimant

She is upset with: (1) having to wait 21 days for an adjudicator to be assigned to her case and (2) the extremely limited access to phone support when the number of unemployment claims are much less than what occurred in 2010, when she last filed for unemployment benefits.

Soraya, claimant

Upset with having to wait 21 days for a decision on her claim.

Sarabi, claimant

The penalties for unemployment concealment are much too harsh.

Robin, claimant

Get rid of work search requirements for employees who experience seasonal layoffs and return to the same employer and eliminate the waiting week.

Sandy, claimant

Get rid of work search requirements for employees who experience seasonal layoffs.

Kyle, claimant

Get rid of work search requirements for employees who experience seasonal layoffs.

Tasha, employer

Get rid of work search requirements for employees who experience seasonal layoffs. And, the claim-filing process is extremely difficult for the employees handling snow removal during the winter months.

Bill, employer

Get rid of work search requirements for employees who experience seasonal layoffs. For employers in Northern Wisconsin, work searches during winter months are a waste of time for both employees and employers, as there no jobs available then.

Deborah, employee

End the ban on unemployment benefits for those who are working while also receiving SSDI benefits. [Note: the Department currently eliminates unemployment benefits because these claimants have a disability that qualifies them for SSDI benefits. Wisconsin is the only state to have instituted this ban. Other states have only applied an offset to unemployment benefits for the SSDI benefits being received.]

Nadine, employer

Get rid of work search requirements for employees who experience seasonal layoffs and return to the same employer. She explains: “Our seasonal employees are returning to our business which they have been at for several years!! Why take the chance with this job-search stuff, which we could lose our valuable employee that we rely on returning. Now days’ finding someone to work is very hard.”

Richard, employee

Get rid of work search requirements for employees who experience seasonal layoffs and expect to return to the same employer year-in and year-out,

Avis, claimant

Complaining about being denied benefits because a medical disability limits work availability. *Note: the description offered presents an obvious violation, as claimants are still eligible for unemployment benefits when work availability is limited to part-time work only because of a medical condition. See CITE.

Hawks Quindel law firm

Undo the damage to the unemployment system created in DWD v. LIRC (Beres), 2018 WI 77, 382 Wis.2d 611, 914 N.W.2d 625, that allows an employer to discharge an employee for a single absence (regardless of why the employee was absent) as misconduct and end the work search requirements for employees who undergo seasonal layoffs and expect to return to the same employer.

Heidi

After presenting numerous ways to make job search information more user-friendly to claimants, she requests that job search criteria be expanded to include the actions claimants actually need to undertake when searching for a new job — such as networking events and informational interviews — and for the Department to allow training opportunities that currently prevent claimants from receiving any unemployment benefits.

Lame duck legal changes

The Department included a one-page memorandum regarding the lame duck changes enacted via 2017 Wis. Act 370. The last sentence of the memo provides all the description that is needed:

Because Act 370 codified current administrative rules and Department practices, claimants and employers should not expect any changes to the unemployment insurance program under this Act.

So, Republican legislators have taken ownership of the job search requirements that nearly no one — I repeat, nearly no one, if the public comments in 2016 and again in 2018 are any indication — thinks are doing anything useful except to make unemployment claims more difficult. Everyone in rural Wisconsin should be asking their state representative and senator why — WHY — they think these job search requirements make sense.

Next steps

The Department indicated that its own proposed changes to unemployment law will be introduced at the February meeting of the Advisory Council (why the Department continues to introduce its own substantive changes to unemployment law remains a mystery ever since the Department proposed its own substantive changes to unemployment law in November 2012).

Scott Manley of Wisconsin Manufacturers & Commerce also made two research requests. First, he wanted the Department to revisit its definition of independent contractor work in light of growing employment through TaskRabbit, Mechanical Turk, and other on-line business operations.

Note: the Labor and Industry Review Commission has already determined that a Lyft driver is NOT an employee for the purpose of unemployment benefits. See Ebenhoe v. Lyft, Inc., UI Hearing No.16002409MD (20 Jan. 2017). Currently, Lyft’s responsibility for paying unemployment taxes is being litigated. See Lyft, Inc., UI Hearing Nos. S1500424MW and S1800091MW (26 Oct. 2018).

Second, Mr. Manley wanted to know what the Department could do to expand its program integrity efforts for bringing criminal charges against claimants for their alleged unemployment fraud. For how the criminal charges that have already been filed are hugely disproportionate according to the race of claimants (75% of the cases are against African-Americans), see this post.

Mark Reihl of the Carpenters made a third request. He wanted a comparison of how Wisconsin’s weekly benefit rate (the average received and the maximum available) compare to the other fifty states and territories.

Note: Wisconsin’s maximum available weekly benefit rate is $370. The average weekly benefit being paid out in 2017 was $317.14. See this 2017 4Q report (this data is for all fifty states, Wisconsin is on p.64 of the pdf). Data for the 3Q of 2018 indicates that the average for the last four quarters was $320.03. The average duration of unemployment benefits for these last four quarters was 12.7 weeks. See p.63 of the pdf for this data.

Data on the financing for all fifty states for 2017 (the most recent year available) can be found here (Wisconsin is on p.60 of the pdf).

Public hearing for unemployment

Here are the details:

2018 Public Hearing

The Unemployment Insurance Advisory Council is interested in hearing your comments on Wisconsin’s Unemployment Insurance program and suggestions for changing the law and improving the program.

The Council represents employee and employer interests and recommends changes to the unemployment law to the Legislature.

Participate in the 2018 public hearing, conducted simultaneously at seven locations throughout the state using video conference technology.

Hearing Date/Time & Locations

Date: Thursday, November 15, 2018
Time: 3:00 p.m. – 6:00 p.m.
Location: Attend the public hearing video conference from one of the following locations:
Madison:
UW-Extension
The Pyle Center
702 Langdon Street
Madison, WI
Eau Claire:
UW-Eau Claire
Centennial Hall
Room 1804
1698 Park Avenue
Eau Claire, WI
La Crosse:
UW-La Crosse
Wing Technology Center
Room 102
1705 State Street
La Crosse, WI
Superior:
WITC – Superior Campus
Room 101D
600 North 21st Street
Superior, WI
Green Bay:
UW-Green Bay
Instructional Services
Room 1034
2420 Nicolet Drive
Green Bay, WI
Milwaukee:
UW-Milwaukee
Kenwood Interdisciplinary Research Complex
Room 2175
3135 N. Maryland Avenue
Milwaukee, WI
Wausau:
Northcentral Technical College
Center for Business and Industry
Room 127
1000 West Campus Drive
Wausau, WI

Submit Comments

The public is invited to provide comments. If you cannot attend the public hearing, you may submit your comments no later than November 16, 2018:

  • Email: UILawChange@dwd.wisconsin.gov
  • Written comments may be mailed to:

Janell Knutson, Chair
Unemployment Insurance Advisory Council
P.O. Box 8942
Madison, WI 53708

If you have any questions, contact Robin Gallagher at 608-267-1405 or visit the Unemployment Insurance Advisory Council website: https://dwd.wisconsin.gov/uibola/uiac.

Winter work search concerns

As they say on a popular television show, “Winter is coming.” For Wisconsinites, winter means seasonal layoffs, as Wisconsin for the time being still has a winter.

Seasonal layoffs, however, no longer mean seasonal unemployment with work searches waived for the snowy months. Rather, DWD has instituted an 8 week + additional 4 week work search waivers that are complicated to follow and difficult to get. The Department’s work search FAQ has the needed information about the new work search requirements and the end of seasonal work search waivers.

Keep in mind that the end of seasonal work search waivers came when DWD adopted a proposal based in part on how Florida limited its work search waivers; see also this direct link to my comments on the proposed regs. Obviously, DWD did not consider that Florida has a much different winter than Wisconsin.

The limited work search waivers were enacted in 2013 but not put first into effect until the 2015-16 winter season.

So, the first time the public could respond to these new waivers was at the 17 November 2016 public hearing, and hundreds voiced their displeasure to this change in waiver practice.

As the minutes for the 19 January 2017 Advisory Council meeting explain (p.5 of the pdf):

A total of 295 people provided 307 comments by letter, e-mail or at the public hearing. The department received the majority of correspondence by letter (158 letters) or through e-mail (123 emails). A total of 51 people attended the public hearing in which 19 people testified, 6 people testified and provided written correspondence and 1 person registered an opinion, but did not speak. A majority of the correspondence was specific to an employer or industry and contained the same text. A tally of the comments showed 246 comments received related to work search waivers for recalled employees.

These minutes leave out, however, that almost all of the comments — similar or not — were from employers. The 43 pp. summation of those comments show that employers were deeply concerned over retaining skilled and dedicated seasonal employees who were now at risk of leaving due to the new work search requirements that force employees during winter layoff months to search for and accept work with other employers and thus disrupt the operations of the original employer. Letters from Sen. Erpenbach, Sen. Harsdorf, and Sen. Carpenter also raised these concerns about employers losing valuable employees.

NOTE: Sen. Harsdorf’s bill to restore seasonal work search waivers, SB83, has not gone anywhere.

Apparently, nothing was done for the upcoming winter season that is now approaching. The only official response to this uproar is set forth in the last Q&A in the work search FAQ (emphasis supplied):

What is the policy basis for the requirement change?

The requirements are a result of a change in DWD’s administrative rules. These rules not only bring Wisconsin in line with more than half of all U.S. states and reaffirm the purpose of UI as delivering short-term assistance, but they also respond to employer concerns regarding the solvency of the UI Trust Fund’s balancing account. The change assures that Wisconsin’s UI law conforms to the federal requirement that state UI programs provide for an experience-rated UI tax system. This ensures fair and equitable financing of the payment of benefits among employers. By encouraging employees to find employment during their industry’s off season, fewer benefits are paid. This assists employers who have negative account balances and are taxed at the maximum UI tax rate. DWD, with the support of three separate committees in the Wisconsin State Legislature, restored the waiver limits that were in place prior to their repeal in 2004.

The concerns of employers about keeping valuable employees through winter layoffs in a state that has a winter and staying competitive when work returns in the spring apparently mattered for naught.

But, employees are not simply thrown to the winter wolves or wampas. Here are three things claimants should keep in mind when performing their four jobs searches a week.

Canvassing periods In Wisconsin, claimants have during their first six weeks — their canvassing period — the right to refuse work outside of their typical job experience. For instance, if the claimant is a nurse, he or she can decline a McDonald’s job during the first six weeks of his or her job search. See, e.g., Einerson v. Milwaukee Institute of Art & Design, Inc., UI Hearing No. 09610221MW (29 April 2011) (employee properly declined to accept the newly created position during her canvassing period because the new position required non-professional responsibilities that encompassed significantly less skills than were required in her most recent employment).

Protection of labor standards After their six week canvassing period, employees must accept ANY job offer as long as it meets labor market criteria (not less than 25% of the average wage for that job during that shift in question in the local labor market — aka the relevant county). So, a person can decline a nursing job if the $8 an hour pay is less than 25% of the average, local labor market rate. See, e.g., Hemenway v. Life Style Staffing, UI Hearing No. 12002612MD (9 Jan. 2013) (employee entitled to refuse offers of new work from the employer if the conditions were substantially less favorable to him than those prevailing for similar work in the locality). These labor standards protections arise from long-standing federal requirements described in UIPL No. 41-98 (17 August 1998).

Unreasonable job offer conditions A claimant can turn down job offers if the commute or shift is not reasonable for the applicant. Commute is relative to the area (a twenty-file mile commute in Milwaukee could be too long but normal and expected in rural Wisconsin). And, a shift not previously worked by the claimant can also be grounds for declining the job. So, a nurse who typically worked first shift can decline a third shift job offer if she has little to no experience working third shifts. See DWD 128 for the details.

WinterWampa

UI bill public hearings and UI concealment

The official Advisory Council/DWD bill, AB819, had its first public hearing on Thursday, February 4th, before the Assembly Committee on Jobs and the Economy.

The Department of Workforce Development and the Advisory Council presented testimony in support of this bill. The Labor and Industry Review Commission testified against sections 54 and 55 of the bill — Department proposal D15-11, previously described here and here. I cannot think of any instance in which one state agency testified against a bill supported by another state agency. To understand the nature of this dispute, see the Commission’s memorandum and the Department’s responses to that memorandum.

I also testified about the proposed concealment changes in the bill.

On February 10th, the Senate Committee on Labor and Government Reform held its hearing on the Senate version of the Department’s UI bill, SB684. WisEye was there.

The Department and the Advisory Council again pushed for adoption of these proposed changes, and the Commission again disputed the changes to circuit court review. Both Kevin Magee from Legal Action of Wisconsin and myself testified against the proposed concealment and “program integrity” changes.

My testimony focused on the Department’s marked increase in concealment cases starting in 2014 and even more concealment cases in 2015 against Wisconsinites. To demonstrate this concealment expansion, I used two charts. The first chart looked at how concealment assessments have varied from 2011 through 2014.

over-payments assessed

In this chart, the percentage of concealment assessments relative to the unemployment benefits being paid out was pretty much constant from 2011 through 2013. In 2014, however, concealment over-payments as a percentage of total unemployment benefits paid out jumped to 2.79%, approximately a 0.80% increase from the previous year. A 0.8% in gross domestic product or the unemployment rate would make headlines across the state. So, this 2014 increase in concealment over-payments being charged against claimants is remarkable.

These numbers from the fraud report also show how concealment over-payments suddenly increased in 2014 relative to non-fraud over-payments. In 2011, 2012, and 2013, non-fraud over-payments constituted more than 50% of total over-payments. In 2014, however, non-fraud over-payments dropped over five percentage points to just over 45%. Naturally, the percentage of fraud over-payments to total over-payments jumped in 2014 to nearly 55%. So, in 2014 concealment shot up in scope relative to unemployment in general just as non-fraud over-payments markedly declined.

Over-payment assessment data for 2015 is not yet available. But, the financial reports prepared for the Advisory Council indicate how much concealment monies have been collected by the Department as of 31 October 2015. As of that date, the Department had collected nearly $31 million in fraud and non-fraud over-payments. Of this amount, just over $1.753 million had been collected pursuant to the 15% concealment penalty that applies in concealment cases.

concealment collected

This 15% number provides a mechanism for estimating how much of the $31 million in over-payments relate to concealment allegations in general. Dividing $1.753 million by 15% equals approximately $11.69 million and represents the over-payments so far arising from concealment. Subtracting $11.69 million leaves around $19 million as the non-fraud portion of the over-payments paid in 2015. Accordingly, by 31 October 2015 the percentage of concealment to non-concealment over-payments collected at nearly 61%.

These numbers show a sudden increase in 2014 in concealment cases and this increase accelerated in 2015. In this light, the Department’s push to change the definition of concealment is part of an agenda to expand the scope and reach of concealment. The Department countered in its testimony before the committee that an intent to conceal is still required under its proposed changes to the definition of concealment. The proposed language, numerous posts on this blog, a Commission memorandum, and Kevin Magee’s testimony at the public hearing belie the Department’s assertions. Mistakes are increasingly being charged as concealment by the Department, and Commission review applying the actual concealment standard is the only way to fight these kind of charges.

Essentially, concealment is becoming the modus operandi of the Department’s efforts in administering the state’s unemployment law. Anyone who makes a mistake is at risk of a concealment charge from the Department, and the Department wants to change unemployment law to reflect this practice.

Unemployment public hearing tomorrow

The unemployment advisory council and the Department of Workforce Development are holding a public hearing tomorrow, 13 November 2014, to take comments on unemployment law. The hearing will be in the afternoon and early evening from 2:30 to 4:30 and 5:30 to 7 PM.

In Madison, the location for the hearing will be:

UW-Extension
The Pyle Center
Room 227
702 Langdon Street
Madison, WI

Check the DWD website for other locations.  If you want to say something about how the state is handling unemployment law, here is your opportunity.  See you there.