Technical Changes to Wisconsin’s Unemployment Compensation Bill Pass

November 18, 2013

On June 12, the Wisconsin Assembly voted 61-35 to pass legislation that’s estimated to save the unemployment trust fund $10 million annually and ensure its stability into the future. For example, the proposal prohibits someone from simultaneously collecting unemployment and disability benefits (i.e., claiming he can work to receive checks from one program while also asserting he cannot work to receive checks from the other). Senate Bill (SB) 200 passed the Wisconsin Senate on June 11 by a 17-15 vote, with all Republicans voting in favor of it and all Democrats against it. The bill has been sent to the governor’s desk for his signature.

Many of the most controversial cuts to jobless benefits are being pursued separately from SB 200 in the budget proposal. For example, there’s a proposal to broaden the definition of employee misconduct. Other ideas put forth by Republicans were dropped, including one that would have cut in half the length of time someone who is out of work can claim jobless benefits during good economic times. Here’s a look at some of the technical changes to the state unemployment program under SB 200.

Bill’s Provisions

Benefit amounts. The bill adjusts weekly benefit rates for weeks of unemployment beginning on or after January 5, 2014. The new rates range from $54 for an employee who earns at least $1,350 in wages (or certain other amounts treated as wages) during at least one quarter of his base period, to $370 for an employee who earns at least $9,250 in wages (or certain other amounts treated as wages) during any such quarter.

Registration and search for work. With certain exceptions, the bill requires a claimant to provide information or job application materials and participate in a public employment office workshop or training program, or similar reemployment services that don’t require a participation fee, if either is required by the Department of Workforce Development (DWD) for a given week other than her first week of benefits. The bill allows the DWD to use the information or job application materials provided by a claimant to assess her efforts, skills, and ability to find or obtain work and to develop a list of potential opportunities for her to obtain suitable work. However, the bill provides that a claimant subject to the work search requirement need not apply for a specific position on the list in order to satisfy the requirement.

Prohibiting concurrent receipt of UI and SSDI benefits. The bill disqualifies a claimant from receiving unemployment insurance (UI) benefits during any week in which he is actually receiving Social Security disability insurance (SSDI) benefits. Under the proposal, when the claimant first files for UI benefits and during each subsequent week he files for UI benefits, he must inform the DWD whether he is receiving SSDI benefits.

Failure to accept suitable work or recall to former employer. Currently, with certain exceptions, if an employee fails, without good cause, to accept suitable work when it’s offered or return to work with a former employer that recalls him within 52 weeks after he last worked for the company, he is ineligible to receive benefits until:

  • Four weeks have elapsed since the end of the week in which the failure to resume work occurs; and
  • The employee earns wages, or certain other amounts treated as wages, equal to at least four times his weekly benefit rate in employment covered by the unemployment insurance law of any state or the federal government.

Subject to all the same exceptions and qualifications, the bill changes the amount of wages an employee must earn to requalify to at least six times his weekly benefit rate. The bill eliminates the requirement that four weeks must have elapsed since the end of the week in which the failure to resume work occurs.

Extended training benefits. Currently, under certain conditions, benefits may not be denied to an otherwise eligible claimant because she is enrolled in a vocational training course or a basic education course that’s a prerequisite to such approved training. A claimant may also qualify to receive benefits while participating in an extended training program under certain conditions if she:

  1. Has exhausted all other rights to benefits;
  2. Is currently enrolled in an approved training program and was enrolled in the program before the end of the benefit year that qualified her for benefits (the benefit year is the period during which benefits are payable);
  3. Has a benefit year (if she’s not in a current benefit year) that ended no earlier than 52 weeks before the week for which she first claimed extended training benefits; and
  4. Isn’t receiving any similar stipends or other training allowances for nontraining costs.

Under those conditions, the claimant is entitled to extended training benefits of up to 26 times the same benefit rate that applied during her most recent benefit year if she is being trained for entry into a high-demand occupation.

In addition, if the claimant’s benefit year expires in a week in which extended or other additional federal or state benefits are generally payable, she is eligible for extended training benefits while enrolled in a training program that she first enrolled in within 52 weeks after the end of the benefit year that qualified her for benefits. However, SB 200 deletes extended training benefits.

Failure to provide requested information. Currently, the DWD may require a claimant to answer questions about his UI benefit eligibility and provide certain demographic information for auditing purposes. In addition, the DWD must require each claimant to provide his Social Security number (SSN). A claimant isn’t eligible to receive benefits for any week in which he fails to comply with a request by the DWD for information or for any subsequent week until he provides the requested information or satisfies the agency that he had good cause for not providing the information.

Generally, if a claimant later complies with a request or satisfies the DWD that he had good cause for failure to comply, he is eligible to receive benefits beginning with the week in which the failure occurred (if he’s otherwise qualified). However, if a claimant later provides the requested information but doesn’t have good cause for the initial failure to provide the information, he is eligible to receive only the benefits that become payable in the week in which the information is provided.

Under SB 200, if a claimant later complies with a request for information, he is eligible to receive benefits beginning with the week in which the failure occurred, regardless of whether he satisfies the DWD that he had good cause for not complying with the request. The change doesn’t apply to a claimant’s failure to provide the DWD with his SSN.

Treatment of services performed by prison inmates. Under current UI law, covered employment generally doesn’t include services by inmates of a custodial or penal institution for government units, Indian tribes, or nonprofit organizations. SB 200 provides that services performed by inmates of state or federal prisons for employers that are not government units, Indian tribes, or nonprofit organizations are also not covered employment under the UI law. As a consequence, wages paid by employers for those services are not subject to UI contribution requirements or counted as base period wages for purposes of determining eligibility for UI benefits.

Departmental errors. The bill also specifically provides that “departmental error” doesn’t include an error by the DWD in computing, paying, or crediting benefits to any individual (regardless of whether he makes a UI claim) or in crediting contributions or reimbursements to one or more employers that results from:

  1. A computer malfunction or programming error;
  2. An error in transmitting data to or from a financial institution;
  3. A typographical or keying error;
  4. A bookkeeping or other payment processing error;
  5. An action by the agency resulting from a false statement or representation by an individual; or
  6. An action by the DWD resulting from an unauthorized manipulation of an electronic system from within or outside the agency.

The bill provides that if the DWD determines that it has erroneously made a payment to an unintended recipient without fault on the part of the intended payee, it may issue the correct payment to the intended payee if necessary and recover the amount of the erroneous payment from the recipient using existing recovery procedures or under a new recovery procedure created by the bill. There is no similar provision in the current UI law.

Bottom Line

While the individual technical changes in SB 200 won’t fundamentally alter the unemployment compensation system, their cumulative effect is estimated to save the fund more than $10 million a year. However, employers should be on the lookout for further changes that may fundamentally alter unemployment compensation. A proposal that would drastically broaden what constitutes misconduct is being considered. Currently, misconduct is defined quite narrowly, and rather serious misconduct or attendance problems are generally required before unemployment benefits will be denied.

For more information on SB 200, visit https://docs.legis.wisconsin.gov/2013/related/proposals/sb200.

This article was featured in the July 2013 issue of the Wisconsin Employment Law Letter, which is edited by Attorney Timothy Edwards and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.

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For more information about "Technical Changes to Wisconsin’s Unemployment Compensation Bill Pass," contact Saul C. Glazer at sglazer@axley.com or 608.260.2473.