By: Daniel Finerty and Melissa Stone
After Assembly Bill 1038 passed on April 14, 2020 and was quickly taken up and passed by the State Senate the following day, Governor Evers took swift action to sign the legislation, known as the COVID-19 Response Bill. 2019 Wisconsin Act 185 (Act) became effective April 16, 2020. The bipartisan bill was passed to ensure Wisconsin is eligible for the federal CARES Act Pandemic Unemployment Assistance by making necessary changes to Wisconsin’s Unemployment Insurance Law, Worker’s Compensation Act and others changes to Wisconsin law.
One-Week Waiting Period
Historically, an employee filing for unemployment insurance benefits (UI) needed to wait one week after becoming eligible to receive UI benefits before the benefits could be received for a week of unemployment.
However, the Act suspends the application of the one-week waiting period for benefit years that began after March 12, 2020, and before February 7, 2021. See 2019 WI Act 185, Section 38 (creating Wis. Stat. § 108.04(3)(b)). The Act also directs the Department of Workforce Development (DWD) to seek the maximum amount of federal reimbursement for benefits that are, during this time period, payable for the first week of a claimant’s benefit year as a result of the suspension.
The Act requires DWD to determine whether a claim for UI or a work-share plan is related to the COVID-19 public health emergency declared by the Governor on March 12, 2020. See 2019 WI Act 185, Section 50 (creating Wis. Stat. § 108.07(5)(bm)). If a claim is related to the public health emergency, the Act provides that the regular benefits for that claim for weeks occurring after that date, and before December 31, 2020, will not be charged to an employer’s unemployment insurance reserve account, as is normally the case provided the employer does not fail to “timely and adequately provide any information required by the Department.” As a result, it is critical for employers to respond to UI requests for information to document the claim is related to the public health emergency in order to ensure the financial health of the employer’s UI reserve account.
While there are a number of exceptions, for employers that pay the quarterly payroll taxes, UI benefit charges related to the public health emergency will be charged to the balancing account of the unemployment reserve fund. This fund is the pooled account financed by all employers that pay contributions and is used to pay benefits that are not chargeable to any employer’s account. However, in the case of employers that instead reimburse DWD for benefits directly, the UI benefits are to be paid in the manner specified under current law for certain other circumstances involving benefits chargeable to reimbursable employers. The exceptions to this charging rule include that it only applies those benefits paid through the state UI program; it does not apply to any federal share of CARES Act extended benefits; and it does not apply to work-share program benefits and other exceptions.
The Act also directs the DWD Secretary, to the extent permitted under federal law, to seek advances to the state’s unemployment reserve fund from the federal government, to ensure that all UI tax rates can remain the same through the end of the year.
Changes to Work-Share Program
Under prior law, an employer could utilize a “work-share” structure to keep workers employed who would otherwise be laid off. The program used partial unemployment benefits combined with continued, but reduced, work hours to insulate employees from lay off.
The Act creates a more accessible, modified workshare program for employers to access their unemployment insurance reserve account instead of laying off employees. The Act outlines the following changes to work share plans submitted between April 16, 2020, the Act’s effective date, and December 31, 2020, which will not have to follow the traditional elements of a Work Share Program outlined in our prior E-Alert:
- Work-share plans must cover at least 2 positions that are filled on the effective date of the work-share program, rather than at least the greater of 20 positions or 10 percent of employees in a work unit under prior law. See 2019 WI Act 185, Section 48 (creating Stat. § 108.062(20)(b)).
- The maximum reduction in working hours under a work-share program may be either 60 percent of the normal hours per week of the employees included under a work-share plan, or the maximum percent reduction of normal hours per week permissible by federal law, whichever is greater, rather than the 50-percent limitation on reduction of hours under prior law. See 2019 WI Act 185, Section 48 (creating Stat. § 108.062(20)(f)).
- Work-share plans may cover any employees of the employer instead of being limited to a particular work unit of the employer as provided in the prior law. See 2019 WI Act 185, Sections 41, 48 (amending Stat. § 108.062(1)(b); creating Wis. Stat. § 108.062(20)).
- Under prior law, if in any week there were fewer than 20 employees included in a work−share program of any employer, the program would terminates on the 2nd Sunday following the end of that week; however, that provision no longer applied to a work− share program that has been approved or modified under the Act. See 2019 WI Act 185, Sections 46 (amending Stat. § 108.062(15)).
- Employers with an existing work-share plan that was approved by the DWD prior to April 16, 2020 are allowed to submit a plan modification under the modified program requirements. See 2019 WI Act 185, Sections 43m (creating Stat. § 108.062(3r)).
Employers that have existing work-share plans may want to consider requesting a modification to comply with the new requirements, which permit greater flexibility in terms of reductions of hours, can include a smaller number of employees, and are not limited to a particular work unit. Employers looking to apply for a work-share program should ensure their application is in compliance with these changes.
Compliance with Requests for Personnel Files
With regard to any request for an employee’s personnel file, received on or after March 12, 2020, the date of the Governor’s original Emergency Declaration, an employer is not required to provide an employee’s personnel records within 7 working days after an employee makes a request to inspect his or her personnel records, and an employer is not required to provide the inspection at a location reasonably near the employee’s place of employment during normal working hours. See 2019 WI Act 185, Section 35 (creating Wis. Stat. § 103.13 (2m)).
In light of this likely temporary amendment to the personnel record requirement, employers can provide copies of personnel files by mail to ensure social distancing in a reasonable period of time and may charge an employee reasonable costs for copying the file, which may not exceed the actual cost of reproduction.
Under prior Wisconsin worker’s compensation law, in order for a COVID-19 claim to be found compensable, medical and factual evidence must be provided that documents by a “preponderance of the evidence” that the employee contracted the COVID-19 virus while at work, as opposed to some other community source. This means that there are facts strong enough to prove the probability that the virus, parasite or bacteria claims arose out of employment. The compensability of COVID-19 cases should be decided on a case-by-case basis following an investigation of the relevant factual background. In the absence of this preponderance of evidence, it cannot be concluded that that the employee sustained an injury while performing services arising out of or incidental to employment, and the claim may be denied.
However, the Act created new conditions of liability for COVID-19 claims as it relates to “First Responders” only. See 2019 WI Act 185, Section 33 (creating Wis. Stat. § 102.03(6)). That section provides the following changes:
- “First Responders” are defined as an employee or volunteer employee that provides fire-fighting, law enforcement, or medical treatment of COVID-19, who have regular, direct contact with, or are regularly in close proximity to, patients or members of the public requiring emergency services within the scope of the “First Responders” work for the employer. See 2019 Act 185, Section 33 (creating Stat. § 102.03 (6)(a)).
- If the “First Responder” is exposed to persons with confirmed cases of COVID-19 in the course of employment, there is now a rebuttable presumption in favor of the employee that the COVID-19 injury is caused by the employment and is work-related. See 2019 Act 185, Section 33 (creating Stat. § 102.03 (6)(b)).
- The “First Responders” injury must have occurred between March 12, 2020 and ending 30 days after termination of Governor Evers’ Public Health Emergency Order, which, as a result of an subsequent Order, is now set to continue past from April 24, 2020 until May 26, 2020, or until a superseding order is issued. See 2019 Act 185, Section 33 (creating Stat. § 102.03 (6)(b)).
- The “First Responders” injury must be supported by a positive COVID-19 test or by a specific diagnosis by a physician. See 2019 Act 185, Section 33 (creating Stat. § 102.03 (6)(c)).
- This is a rebuttable presumption. If an employer or insurer has credible evidence that the “First Responder” was exposed to COVID-19 outside of the work for the employer, the compensability of the claim may be challenged. See 2019 Act 185, Section 33 (creating Stat. § 102.03 (6)(d)).
This change to Wisconsin worker’s compensation law only applies to “First Responders,” as defined in the Act. It does not apply to all employees classified as “essential” during the crisis. The Act creates a presumption that whenever a “first responder” on the front line of the State’s COVID-19 response gets COVID-19, the injury is work-related. The burden is then on the employer and insurer to present credible factual evidence to rebut the new statutory presumption in order to deny liability for the claim.
The Act contained a second amendment to the Worker’s Compensation Act. Under existing worker’s compensation law, there is an additional benefit of up to $13,000.00 available to an employee that sustains injury as a result of exposure in the workplace over a period of time to toxic or hazardous substances or conditions. See Wis. Stat. § 102.565. Under the Act, this additional benefit does not apply to a “First Responder” who claims presumed injury under the other changes outlined by the Act. See 2019 Act 185, Section 33 (creating Wis. Stat. § 102.565 (6)).
For more information about these changes, please contact your Lindner & Marsack, S.C. attorney at (414) 273-3910.