New Internet Claims Filing Process for 2016

The Department of Workforce Development is revamping its Internet Claims Filing process with a much more complicated and detailed series of questions and screens. At the December 17th Advisory Council meeting, the Department was scheduled to present to the council what these changes would entail. Because of other issues, however, the council never got to see this presentation. Luckily, the Department sent me a copy.

Those filing their weekly claim certifications will now be told about fraud warnings at the start and end of their claim filing. See pp.2 and 17. And, the 14 questions now being asked are at least 20+ questions. Furthermore, rather than simplifying the information being asked about, the new questions continue to be legalistic and leave key information out.

NOTE: For comparison, here are the questions Massachusetts asks claimants (in Massachusetts, the phone questions are the same as when filing by Internet).

NOTE: Also compare the information available in the Massachusetts Guide to Benefits for Claimants with Wisconsin’s Handbook for Claimants. Notice the kind of information available in Massachusetts and the tone of how that information is presented as compared to Wisconsin.

For example, in Wisconsin there will now be a question about school attendance. See p.3. Usually, when you attend school during your regular work shift you are ineligible for unemployment benefits. But, if you work during the evenings while attend classes during the day, you should still be eligible for unemployment benefits when laid off from your evening job. In this case, the schooling does not interfere with your availability on your typical work shift. The new Internet filing form, however, only asks about attending classes during the day and does not include or ask for any information about regular work shifts.

Able and available status are now two separate questions as well. See pp.4 and 5. Missing work because of illness usually leads to a reduction in weekly benefits because work was missed. The question on p.4, however, only asks about your regular employer. Because many claimants who have temporary, part-time work do not think of those employers as their “regular” employers, they will not think a question about missing work with a temporary employer because of sickness is included in this question. This question should be asking about any current or future employer and make no reference to a “regular” employer.

Problems with other questions continue. Claimants are supposed to report all wages earned in the week for which they are filing, regardless of when they are actually paid those wages. So, the Department goes into detail about how to report those wages and hours (and minutes) of work for employers (see pp.6-8) as well as how commission work and sales are to be reported (see p.9). But, then the Department asks about sick pay, bonus pay, holiday pay, and other kinds of pay (see pp.10-12) as already received for the week — “did you receive?” — or to be received — “will you receive?” As a result, these questions imply that regular wages that are to be paid in the future do not need to reported since there is no question about reporting wages that “will be received?” Instead of two questions for vacation pay et al., only one should be asked: “Are you to receive?” And, instead of all of these separate kinds of wage income that now has to be reported separately, the Department should simply ask claimants to report “Any and all kinds of income connected to the work with EMPLOYER you are to receive for the week at issue.” By breaking these kinds of income into separate categories, the Department is requiring claimants to have an accountant’s understanding of their income in order to correctly fill out their weekly claim certifications rather than just asking for the total, gross amount of all income regardless of kind.

NOTE: The Department will even have a screen for miscellaneous income, such as baby-sitting, that has to be reported. See p.13.

Specific work search information for each job action will also now have to be provided. See p.15.

Given all the information that has to be provided in the proper category now, opportunities for mistakes will abound. And, any mistake will be an opportunity for charging claimants with fraud. In short, this new Internet filing process will NOT make it easier for claimants to file their weekly claims. But, this new process will make it easier for the Department to charge claimants with concealment.

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SSDI benefits and unemployment

In 2012, the Department of Workforce Development introduced numerous proposed changes to unemployment law, and one of those proposals, D12-05, sought to ban recipients of Social Security Disability Income (SSDI) from receiving unemployment benefits.

After back and forth between the members of the Advisory Council and the Department, a new version of the Department’s proposed ban on unemployment benefits when receiving SSDI benefits was drafted, supported by the council, and passed by the legislature.

In 2014, however, the Labor and Industry Review Commission found that the actual statutory language did not accomplish what the Department intended and held that the ban on receiving unemployment benefits only applied for the week in which a person’s monthly SSDI benefits were paid. Since then, the Department has appealed each and every Commission decision allowing claimants receiving SSDI benefits to continue receiving some unemployment benefits (about eleven such cases in total). An amicus brief being filed in some of these circuit court cases has the details about these events and issues.

This amicus brief also demonstrates the fundamental flaw in the Department’s push to keep SSDI recipients from receiving unemployment benefits, namely the Department’s presumption that SSDI recipients do not work and leave the labor market. As detailed in this amicus brief, not only do folks receiving SSDI benefits continue to work in numerous kinds of jobs, they are also encouraged to do so.

Undeterred, the Department explained at the 19 February 2015 Advisory Council meeting that a proposal for eliminating all unemployment eligibility for those receiving SSDI benefits was being developed. At the 19 March 2015 council meeting, the Department presented this new language in D15-01 to make the ban on unemployment eligibility apply to all weeks SSDI recipients receive unemployment benefits.

To establish why this new and total ban was needed, the Department informed council members that in January 2014, when the first ban on unemployment eligibility for SSDI recipients was instituted, 687 claimants were immediately disqualified because they notified the Department that month that they were receiving SSDI benefits. This 687 number bears repeating: the SSDI ban as implemented by the Department stopped unemployment benefits for nearly 700 claimants. And, only eleven or so claimants who appealed their cases to the Commission managed to retain some eligibility.

The Department’s recently released Financial Outlook Report at p.34 shows the financial impact this ban on unemployment benefits for SSDI recipients has had: nearly $1.5 million annually is not being paid to claimants based on the work they have performed the previous year.

Staffers in the Secretary’s office of DWD recently asked the Commission to identify possible legal problems in the Department’s unemployment proposals. The Commission did so, and reported to the Advisory Council the problems with the Department’s SSDI proposals arising from the Commission’s legal analysis. The Commission’s memo reveals three basic problems with the Department’s SSDI efforts:

  • a total ban on unemployment eligibility discriminates against the disabled
  • a ban on unemployment eligibility because of disability is inconsistent with other provisions of unemployment law
  • a complete ban on unemployment eligibility is far too broad relative to the income and eligibility of many if not most individual claimants

In response, at the April 2015 council meeting the Department lambasted the Commission’s memorandum as driven by a political agenda rather than legal analysis. Scott Manley, WMC vice-president, chimed in to endorse the Department’s criticism of the Commission’s “political” opinions. These conclusions were especially remarkable when the Commission’s memorandum represents the first time that council members were presented with the Kluczynski decision at issue in these SSDI cases.

The Advisory Council, however, apparently accepted the Department’s conclusion about SSDI benefits. After the members caucused, they indicated that they approved of the newly proposed statutory language in D15-01 and that the Department could go ahead and present this proposal to the legislature.

Gov. Walker’s budget proposals for unemployment

There are three main proposals for unemployment contained in Governor Walker’s proposed budget: (1) new drug testing requirements, (2) increased concealment penalties, and (3) job search changes based on suitable work requirements. Here is a quick run down of the latter two. The drug testing will be described in another post.

Increased concealment penalties
At present, those charged with concealment have to repay all weekly unemployment benefits for each week of concealment at issue and are subject to a 15% administrative fee on top of the amount owed. In addition, Wis. Stat. § 108.24(1) has provided that those guilty of concealment “shall be fined not less than $100 nor more than $500 or imprisoned not more than 90 days, or both.”

Governor Walker is proposing increasing the administrative fee charged to claimants for concealment to 40%. In addition, the criminal penalties are being substantially increased: Sections 3131 and 3132 substitute the following penalties:

1. If the value of any benefits obtained does not exceed $2,500, is subject to a fine not to exceed $10,000 or imprisonment not to exceed 9 months, or both.
2. If the value of any benefits obtained exceeds $2,500 but does not exceed $5,000, is guilty of a Class I felony.
3. If the value of any benefits obtained exceeds $5,000 but does not exceed $10,000, is guilty of a Class H felony.
4. If the value of any benefits obtained exceeds $10,000, is guilty of a Class G felony.

There are two issues in play with these changes. First, the Department lately has been pushing in numerous cases that mere mistakes in claim filing serve as evidence of claimant fraud. The Commission has been overturning some of those decisions, but the Commission can only act on cases that reach it. Folks who do not appeal their cases to LIRC remain charged with concealment and have to repay benefits that very well could be from nothing more than making mistakes on their weekly claim filing.

As noted previously (see the discussion of over-payments in this post), the Department takes way too long to investigate claimant mistakes and there are avenues available for tightening up oversight of claimant filing with employer’s wage reporting that could catch problems much sooner. It appears that no one is interested in actually making Department operations on this front more efficient.  Rather, the focus seems simply to squeeze more money out of those who do not understand or cannot afford the time and expense of getting help on these issues.

Right now, too many cases are appearing in which the claimant is accused of fraud that has been going on for years. So, a claimant who might owe $10,000 because of two years of alleged fraud will see an administrative penalty increase from $1500 to $4000. The Department collects this money from future unemployment benefits and also from intercepting state and federal tax returns. As a result, folks charged with concealment will find themselves indebted to the Department for even longer periods of time as these nearly tripled administrative fines get repaid.

Second, in this light the enhanced criminal penalties are even more startling.  The penalties literally create a modern debtor’s prison for those charged with unemployment fraud.  Because the Department is taking one to two years to catch alleged concealment, the monies at issue almost always amount to more than $5000 or $10,000. If prosecutions actually happen and succeed under this proposal, Wisconsin’s prison population could sky-rocket even in an low-unemployment climate (the latest WorkNet quarterly report shows that in the 4th quarter of 2014, there were 110,614 initial claims for benefits, substantially higher than the 65,067 initial claims made in the 3rd quarter of 2014, and the latest Advisory Council fraud report shows that more than 14,000 concealment cases have been pursued by the Department in 2012 and 2013 each year).

Of course, criminal penalties already are available for concealment, but few prosecutions by local district attorneys or DOJ attorneys (the prosecutors responsible for these criminal cases) have taken place.  Department representatives have complained to the Advisory Council about this reluctance to take on these cases.  The proposed increase in penalties appears to be an avenue for making these concealment cases seem more important to prosecutors.

The problem, however, is that prosecutors still need to prove beyond a reasonable doubt that the concealment at issue is intentional. The Department may be determining that confusion warrants a finding of intentional concealment when issuing an initial determination, but a prosecutor will not have the luxury of asserting that a person should have known better when mistakenly reporting weekly income because of learning disabilities or actual lack of knowledge about the exact amount of wages earned (e.g., from an employer who does not provide information about wages from tips or commissions until weeks later).

Job search changes based on new suitable work requirements

The Legislative Reference Bureau describes this proposed change:

Current law places various conditions upon the receipt of UI benefits, including that claimants conduct a reasonable search for suitable work and that claimants accept suitable work when offered. Current law does not define suitable work, but DWD has defined it by rule to mean work that is reasonable considering the claimant’s training, experience, and duration of unemployment as well as the availability of jobs in the labor market. This bill specifically requires DWD to define by rule what constitutes suitable work for claimants, and requires that the rule specify different levels of suitable work based upon the number of weeks that a claimant has received benefits in a given benefit year.

This description is apt, as the specific provision contained in Section 3117 pf the budget bill simply creates a new Wis. Stat. § 108.14(27) that directs the Department to create a rule for specifying “different levels of suitable work based upon the number of weeks that a claimant has received benefits in a given benefit year.”

At present, there are two levels of availability for claimants (the work search regs are in DWD 127).  During the first six weeks of unemployment — what is called a canvassing period — a claimant can restrict his or her availability based on prior training, education, and job experience. See Wis. Stat. § 108.04(8)(d). After those six weeks are up, no restrictions are possible.  So, an engineer can decline an offer to work the fry machine at McDonald’s during week two of her unemployment because that job is not suitable work for her.  But, the claimant has to accept that job offer on week seven.

At present, there is no requirement that claimants apply to any and all jobs after their six-week canvassing period is over. A claimant might have to accept a job offer from McDonald’s on week seven, but she does not have to apply for a job from McDonald’s on week seven

It appears that this proposal is meant to pressure claimants into broadening their job search efforts in some kind of systemic manner. The problem is that it is nearly impossible to come up with such a system: this requirement is asking the Department to categorize the relevant job markets by geography, local business climate, and employees’ relevant educational and work background. While the Department has geographic labor market data, it is still not at all clear how that data can be linked to claimants into some kind of comprehensive scheme for establishing how a particular claimant should expand his or her job search.

To get an idea of just how complicated creating such a scheme is, look at the current requirements in DWD 127(1):

The reasonableness of a search for work will, in part, depend on the employment opportunities in the claimant’s labor market area. A work search which may be appropriate in a labor market area with limited opportunities may be totally unacceptable in an area with greater opportunities. Unreasonable limitations by a claimant as to salary, hours, or conditions of work indicate that a claimant is not making a reasonable search for suitable work. The department expects claimants to conduct themselves as would a prudent person who is out of work and seeking work.

A laid-off welder will certainly be expected to apply for welding jobs here. But, if no welding jobs are available, what kinds of jobs should that welder be required to explore? Machinist? Plumber? Pipefitter? And, what if the welder had prior experience as a camp counselor and summer camp jobs are readily available in her local area? After twenty weeks of unemployment in May, it would be reasonable for that former welder to look at camp jobs. But, how does the Department create a system for mandating that a particular welder with camp experience apply for camp jobs?

SSDI and unemployment

LIRC recently issues a lengthly and well-reasoned decision regarding what recent changes to unemployment law in regards to receipt of SSDI benefits means. Here is what I wrote to a clinic client about that decision:

You came to the clinic in April and May of this year with numerous questions about the impact of new unemployment law provisions on people receiving social security disability benefits. When last we spoke, you were planning on appealing on your own an administrative law judge decision that denied you all unemployment benefits because you were receiving social security disability income.

The Labor and Industry Review Commission (LIRC or Commission) has recently issued the enclosed decision, Kluczynski, UI Hearing No. 1400214AP (30 May 2014), that answers many of those questions. The Commission held in Kluczynski that receipt of social security disability benefits only affects unemployment benefits on the week when both unemployment and disability benefits are received. In other weeks where unemployment benefits can be received and for which no disability benefits are paid, claimants are still eligible for their unemployment benefits.

The Commission also goes into great detail in Kluczynski about the contention of the Department of Workforce Development (DWD or Department) that people claiming both disability and unemployment benefits are double-dipping. As the Commission concludes, that position is NOT supported by either social security disability law or unemployment law and wrongly presumes that individuals eligible for each are mutually exclusive to the other. It is an extremely well-argued decision, and I suspect that this decision will withstand judicial scrutiny if the Department should appeal.

Unfortunately, LIRC’s unemployment decision database is temporarily down. I’ll link to Kluczynski when the cite is fully operational again.

UPDATE: Here is the link to Kluczynski.

Not surprisingly, DWD has appealed all of the SSDI decisions LIRC has recently issued on this matter, including Kluczynski. What is strange is that all these appeals appear to be in Kenosha County, a county where most or all of the claimants at issue in these cases do NOT reside.

Important and comprehensive concealment analysis from LIRC

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

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

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

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

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

  • Did you work and earn wages during the week?

Two separate questions could be asked instead, such as:

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

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

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

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

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

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

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

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

* * *

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

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

Reporting offers of work and alleged concealment

LIRC has recently added a 1992 decision to its public database about an employee’s failure to report an offer of work on his weekly claim certification.

The offer was a temporary recall that the claimant turned down because he did not want a gap in pay for a few weeks after he returned to work. That is a problem, because when receiving unemployment benefits you need to accept any and every bona fide offer of work.

The issue in this case is whether the claimant is also guilty of concealment because he never reported the job offer. As the job offer was temporary and withdrawn so that someone else could receive it, the administrative law judge reasoned, the job offer no longer existed. As a result, there was nothing to conceal, the administrative law judge concluded. The Commission agreed, and its explanation is worth quoting in full:

Briefly, the employe had worked for approximately three and one-half years as a press operator for the employer, when he was indefinitely laid off on November 1, 1991. On or about November 15, 1991, the employer’s plant manager telephoned the employe and said he would like the employe to come back to work. The employe asked whether the recall was temporary or permanent; the plant manager indicated that it was temporary, for two or three weeks. The employe asked whether he had to return, indicating that his return would “mess up” his unemployment compensation eligibility. The employe was concerned that there would be a time period during which he would have no income because of the delay in receiving his first check upon his return to work. The plant manager told the employe it was not mandatory that the employe return. The employe asked the manager whether he could call the employe back when full-time, permanent work were available; the plant manager said he would, that it was all right for the employe to turn down the job because he (the plant manager) could call someone else.

Section 108.04(11)(a) of the Statutes prohibits benefit claimants from concealing from the Department refusals of job offers or any other material facts relating to the employe’s eligibility for benefits. Concealment consists of a suppression of a fact and implies a purpose or design. Kamuchey v. Trzesniewski, 8 Wis. 2d 94, 99, 98 N.W.2d 403 (1959), citing 23 Am. Jr., Fraud and Deceit, p. 851, sec. 77. There must be the intent to receive benefits to which the individual knows he or she is not entitled. Krueger v. LIRC, Rock County Court, Case No. 81-CV-559 A, December 3, 1982, 1982-85 U.C. Digest at 235. The bulk of the relevant case law supports the general proposition that the failure to report to the Department a withdrawn offer of work is not a concealment. In a 1959 case, for example, the employe, after layoff from his Wisconsin employer, had obtained work in Illinois to commence August 29. See 59-A-2191, 1976 U.C. Digest BR at 24. The employe accepted the Wisconsin employer’s August 18 offer of re-employment, but indicated he would not work beyond the starting date of his Illinois employment, whereupon the Wisconsin employer withdrew its offer. It was held that the employe’s failure to report the offer of work arose from an honest mistake and misunderstanding, and not from any intentional plan to withhold information for a fraudulent purpose. In a 1974 case, likewise, the employer had recalled the employe but withdrawn the offer in the same conversation. See 74-A-1567 X, 1976 U.C. Digest BR at 27. It was held there that the employe reasonably concluded that no offer of work was made, and that he did not knowingly or deliberately conceal a material fact relating to his eligibility.

As indicated above, the Commission conferred with the Administrative Law Judge in this matter, primarily to determine his assessment of the credibility of the employe’s assertion that he did not believe himself to have concealed a job offer from the Department because of the employer’s withdrawal of that offer. The Administrative Law Judge found the employe’s assertion in this regard to be credible; the Commission agrees. Even though the Commission has determined that an offer of work in fact was made, it nevertheless was reasonable for the employe, under the circumstances, to believe the offer of work had been withdrawn. Given that belief, the employe cannot be said to have had a purpose or design to suppress a fact which the Department was entitled to knowledge of, or to have intended to receive benefits to which he knew he was not entitled. The Commission therefore finds that, in week 47 of 1991, the employe did not conceal an offer of work, within the meaning of section 108.04(11)(a) of the Statutes.

Recent LIRC decisions show that concealment charges are often outside the law

In January 2014, the Labor and Industry Review Commission issued three decisions about concealment. In all three, the Commission overturned decisions of administrative law judges that had affirmed initial determinations. In reading these, it is apparent that the Department of Workforce Development is basing many of its concealment allegations on little more than mere mistakes by claimants.

What is most troubling about the decisions described below is that these basis mistakes in how to apply unemployment law are only being corrected by the Commission. Not only are claim adjudicators getting basic issues wrong, but administrative law judges seem determined to apply the same erroneous standards as the claim adjudicators. It takes someone appealing a decision all the way to the Commission to finally get the basic legal standard for concealment applied to his or her case. Something is very wrong with the Department and unemployment cases in general when only the Commission is following the law.

“Did you work or will you receive sick pay, bonus pay, or commission?”
In Henning, the claimant had been filing for partial unemployment since May 2011. In October 2012 (week 43), the Department changed one of the questions on the weekly claim certification from “Did you work?” to “Did you work or will you receive sick pay, bonus pay, or commission?” With this new question, the claimant stopped answering yes as she was not earning sick pay, etc. As a result, her part-time work went un-reported on her weekly claims.

The Department did not catch this problem until late July 2013 — almost a year later. The Department issued two determinations: one finding that prior unemployment benefits had to repaid along with a concealment penalty and another instituting a penalty on future unemployment benefits. The administrative law judge affirmed after a hearing.

The Commission found otherwise:

The evidence in the record does not support a conclusion that the employee intentionally replied “no” to both parts of the modified question. The former question was straightforward and not easily susceptible to misinterpretation. The modified version presents two distinct alternative questions within one compound question. There are inherent dangers in inviting an answer to a compound question. It is often not possible to be certain to which part, or parts, a single response applies.

Finally, the standard in concealment cases is not that applied by the ALJ: whether the employee could establish a reasonable explanation for her mistake. The standard in concealment cases is whether there is substantial and persuasive evidence of an intent or design by the claimant to receive benefits to which the claimant knows he or she is not entitled. Here, evidence to support a conclusion that, in making the claims for benefits for the weeks at issue, the employee intentionally misled or defrauded the department by withholding or hiding information or making a false statement in order to receive benefits to which the employee knew she was not entitled is absent.

In Harris, confusion over this question was also at issue. In this case, only two weeks were at stake. The Commission found that there was no actual intent in the record to deceive the Department, and so overturned the decisions of the Department and administrative law judge finding that concealment had occurred.

The mistakes in these cases are about an ambiguous question being asked of claimants. The Commission here is simply pointing out that an answer to an ambiguous question is not proof of actual deception. The Department apparently thinks otherwise. What is especially troubling, however, is when there is clear evidence of a mistake and both the Department and administrative law judge go out of their way to find concealment anyway.

When claimants are apparently always wrong
In Bilton, the claimant was working as a tax preparer when she took a new job. As her hours and pay were not clear to her during the first few weeks she worked for the new employer, her weekly claim certifications did not coincide with what her employer reported. Two and five months later, the Department issued two determinations finding concealment, over-payments that had to be repaid, a concealment penalty, and a penalty on future unemployment benefits.

At her hearing, the claimant started to testify about how a prior employer of hers did not pay for training and that she thought training with the new employer was likewise unpaid. The administrative law judge cut off this testimony as too remote in time from the training at issue with the new employer. Other testimony about her training with the new employer was not refuted and it was also unclear from the hearing exactly where the earnings at issue came from. Nevertheless, the administrative law judge summarily affirmed the concealment determinations. According to the ALJ, the burden was on the claimant to report her wages and work in sufficient detail to the Department to avoid a finding of concealment.

The Commission, on the hand, found the whole concealment allegation to be hogwash. Both employee and employer reinforced an impression that the training was unpaid (however illegal that is). Furthermore, the Commission observed:

the department’s Disputed Claims Manual provides that there is no concealment issue and no fraud investigation required when the claimant fails to report income on the weekly claim certification and notifies the department of such failure within 14 days following the date the certification was filed. When an investigation establishes that a claimant gave a false answer, two examples of acts that are not considered concealment are “[p]aid training not reported because claimant did not consider this to be work and wages” and “[c]laimant believes their work or labor is donated and is paid unexpectedly.” It is not clear from the record in this case how the employee’s actions with respect to weeks 4 and 5 of 2013 differ from these examples.

In other words, despite clear direction from a disputed claims manual that there was no concealment at issue here, both an adjudicator and an administrative law judge found concealment had occurred.

Basic case-handling mistakes by the Department
These decisions also reveal some basic problems in how the Department is processing claims. In Bilton, the concealment determinations were issued separately and three months apart from each other. In Henning, the Department did not issue determinations until nearly a year later. Furthermore, the concealment determinations in Henning inexplicably did not cover all weeks in question, but only alleged concealment for weeks in 2013 and no concealment in 2012 despite the alleged concealment starting in week 43 of 2012. “This disparate treatment,” the Commission noted, “was not explained.”

By itself, this sloppy case-handling is just that. But, as claimants must also rely on Department agents to provide clear and sound advice about what they should do, this sloppy case-handling can lead to serious problems for claimants who think they can rely on the Department to accurately record all of their interactions with Department personnel.

In Bilton, there was a question of when the claimant tried to contact the Department for information about how to report her weekly claim certification. The administrative law judge apparently considered departmental records as conclusive evidence that trump actual hearing testimony. Accordingly, the Commission had to reiterate in that case that departmental records are only hearsay.

The employee testified that, when she received the unexpected payroll check, she contacted the department. The employee’s statements concerning what was said in the conversations she had with the department were not inherently incredible. Comments typed into the departments computer system concerning what was said, or what was not said, are hearsay. No one testified on behalf of the department. Uncorroborated hearsay alone does not constitute substantial evidence.

As Department agents only record information in computer systems when taking action of some kind, it is unremarkable that an agent would not record a phone call from a claimant if the agent did nothing or advised a claimant to take some kind of action on his or her own (such as reporting the income at issue in a subsequent week). Because the Department’s policy is to only record issues in its computer systems when action is taken or some issue has arisen that the agent believes is relevant, there are usually no records for when Department agents make mistakes and provide wrong advice or mis-perceive something a claimant says as harmless or unimportant. Until the Department institutes a policy that all interactions need to be recorded, claimants simply cannot rely on departmental records to show an actual history of communication for their unemployment claims.