Category Archives: Unemployment Insurance

Wisconsin’s COVID-19 Response Bill Signed By Governor Evers

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.

Unemployment Insurance

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.

Initial Claims

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.

Worker’s Compensation

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.

Work-Share Programs – A Viable Option For Employers Reducing Employee Hours Due to COVID-19

By: Daniel Finerty and Laurie Petersen

A Work‐Share Program (“program” or “plan”) is a benefit plan for which Wisconsin businesses can apply to the Unemployment Insurance Division of the Department of Workforce Development (“UI Division” or “DWD”). The program is designed to help both Wisconsin businesses and their employees by allowing businesses to tap the funds in their unemployment insurance reserve to offset wage reductions and keep employees working.

Instead of laying off workers, a qualified employer, after approval of its program application, can plan to reduce work hours across a work unit. After approval, work hour reductions can be implemented when the program becomes effective. The plan’s effective date is the Sunday of the 2nd week after approval or any Sunday after that day specified in the plan, whichever is later, and generally last for a 6-month period. Workers whose hours are uniformly reduced under the plan can receive unemployment benefits that are pro‐rated for the partial work reduction from the employer’s unemployment insurance account. As a result, a plan, once approved, can help employers avoid layoffs, mitigate the unemployment insurance reserve account impact of more dramatic workforce reductions, allow workers to remain employed and ensure employers can retain trained staff during these times of reduced business activity caused by COVID-19.

More relevant for employers may be the fact that employees working under an approved plan may be eligible to receive the $600/week recently included in the CARES Act. Even if the plan includes more than 32 hours of work or more than $500 in wages per week (both facts that would normally make an employee ineligible for unemployment insurance benefits), the employees may still be entitled to unemployment insurance benefits through an approved program. Workers eligible for at least $1 in unemployment benefits as a result of participation in an approved program, or otherwise, will likely also be eligible for the $600/week federal payment. Just this week, the Department of Workforce Development revealed that it has entered into an agreement to receive this funding from the U.S. Department of Labor. DWD expects its system modifications to be in place and able to accept the CARES Act claims by April 21, 2020, and expects to have the first checks issued around April 28, 2020. These dates are subject to change based on circumstances that arise.

A program requires an employer to apply to the UI Division, as outlined in Wis. Stat. § 108.062. To do so, the employer must certify the following conditions to meet the required elements of a work-share program, or plan. The applicant employer must:

  • Specify the work unit in which the plan will be implemented, including the affected positions, and the names of the employees filling those positions on the date of submittal. “Work unit” is defined as an operational unit of employees designated by an employer for purposes of a work-share program, which may include more than one work site.
  • Provide for inclusion of at least 10 percent of the employees in the affected work unit on the date of submittal and for initial coverage under the plan of at least 20 positions that are filled on the effective date of the work-share program. In this regard, the plan must include the greater of 20 positions or 10% of the employees in a work unit. Here are some examples:
  • If there are 20 employees in a work unit, the plan must include all 20 employees in unit;
  • If 100 employees in a work unit; the plan must include at least 20 employees in unit; and,
  • If 1000 employees in a work unit; the plan must include at least 100 employees in unit (10%).
  • Specify the period or periods when the plan will be in effect, which may not exceed a total of 6 months in any 5-year period within the same work unit.
  • Provide for apportionment of reduced working hours equitably among employees in the work-share program.
  • Exclude participation by employees who are employed on a seasonal, temporary, or intermittent basis.
  • Apply only to employees who have been engaged in employment with the employer for a period of at least 3 months on the effective date of the work-share program and who are regularly employed by the employer in that employment. A work-share program becomes effective on the later of the Sunday of the second week beginning after approval of a work-share plan or any Sunday after the effective date specified in the plan.
  • Specify the normal average hours per week worked by each employee in the work unit and the percentage reduction in the average hours of work per week worked by that employee, exclusive of overtime hours, which shall be applied in a uniform manner and which shall be at least 10% but not more than 50% of the normal hours per week of that employee.
  • Describe the manner in which requirements for maximum federal financial participation in the plan will be implemented, including a plan for giving notice, where feasible, to participating employees of changes in work schedules.
  • Provide an estimate of the number of layoffs that would occur without implementation of the plan.
  • Specify the effect on any fringe benefits provided by the employer to the employees who are included in the work-share program other than fringe benefits required by law. Generally, the employer must maintain coverage under any defined benefit or defined contribution retirement plan for employees who receive work-share benefits under the same terms and conditions as if the employees were not included in the program. In addition, the employer must maintain any health insurance coverage in place under the same terms and conditions as if the employees were not included in the program.
  • Include a statement affirming that the plan is in compliance with all employer obligations under applicable federal and state laws.
  • Indicate whether the plan includes employer-sponsored training to enhance job skills and acknowledge that the employees in the work unit may participate in training funded under the federal Workforce Innovation and Opportunity Act, 29 USC 3101 to 3361, or another federal law that enhances job skills without affecting availability for work, subject to department approval.

Generally, work-share programs that contain all the required elements must be approved by the UI Division and can be modified during that period to account for changes in business conditions. While current employer experience indicates that work-share program approval takes about a week, it is possible that additional delays may occur due to the generally increased workload being handled by the UI Division. Also, the DWD is advocating some potential statutory changes that may broaden coverage to include more significant hour reductions, perhaps, up to 60%; however, that change would require an amendment by the Legislature and approval by the Governor.

Once approved, the business’s unemployment insurance reserve account will be charged for the payments to employees for the weeks specified in the approved program, similar to unemployed workers who receive unemployment benefits. However, by contrast to laying off employees that will collect unemployment, the business keeps these employees working, realizes the economic benefit of that work, ensures that economic challenges tie the employees to the employer’s workforce and ensures an adequate cushion for employees whose hours are subject to reduction.

Notably, while an employer’s work-share program can be in effect for a total of six months in any five-year period within the same work unit, that same employer is not prohibited from and can, in fact, have multiple plans for different work units.

If approved, it is critical for employers to explain the impact of the work-share plan upon the impacted employees to ensure an understanding of what will happen. In general, the employees will receive an amount equal to the employee’s regular benefit amount multiplied by the employee’s proportionate reduction in hours worked for that week as a result of the Work-Share Program.

Employees under an approved plan do not need to register for work or conduct a work search while in the plan; thus, these employees will be further tied into the employer’s workforce by the plan. However, employees must be available for work with the employer participating in the plan, should the employer need extra hours beyond what is anticipated.

An employer is not restricted by the plan from either terminating an employee or accepting an employee’s resignation. The employee’s eligibility for UI benefits after termination or resignation will be subject to the normal analysis.

More information on Work-Share Programs can be found on the Unemployment Insurance Division website. Interested employers can complete the Work-Share Plan Application and send or fax it to the UI Division:

Address:

DWD-Unemployment Insurance
Employer Service Team
P.O. Box 7942
Madison, WI 53707

Fax:   (608) 267-1400

For more information about the benefits of Work-Share Plans, please contact your Lindner & Marsack, S.C. attorney at (414) 273-3910.

WISCONSIN’S UNEMPLOYMENT INSURANCE CHANGES WENT INTO EFFECT 01/05/2014

By: Daniel Finerty

In a previous E-Alert, we described a series of substantial changes and amendments to Wisconsin’s unemployment insurance law that were scheduled to go into effect. The majority of the changes, including changes to the definition of “misconduct” and “substantial fault”, recently went into effect on January 5, 2014 and first apply to claims filed during that week. 

Here are some helpful reminders when contesting UI claims to ensure the best outcome:

  • Consider whether, and how, the information being submitted can be easily placed into the new “substantial fault” definition, the revised “misconduct” definition, the amended or remaining “quit exceptions” or other categories;
  • If it cannot, determine how to better organize the information to ensure that UI personnel, who can be overwhelmed with competing demands for their time and attention, can easily use the information to make a quick benefit determination;
  • Before submitting documents and information, decide, based on the circumstances, whether or not it is worth it to raise both a misconduct and a substantial fault disqualification or more than one disqualification; or, to argue that the claimant voluntarily quit through their conduct or non-compliance with directive or pre-condition to continued work and, in the alternative, the claimant committed misconduct and/or substantial fault.
  • Always provide complete, accurate and organized information that can be easily understood; and,
  • If you have questions about whether or how to contest UI claims, how to navigate the Unemployment Insurance Division system or other questions, ask questions or get help!

Those employers that have a working knowledge of the UI changes and attempt to utilize the changes in day-to-day human resource management will be in the best position to contest UI claims by current and former employees. Along with the new UI changes, employers should continue to utilize the existing eligibility criteria and disqualifications to protect their UI reserve account balance and reduce the overall amount of UI benefits paid.

When the new and existing UI changes are used to effectively manage UI liability and successfully defend UI benefit claims over the long term, these diligent employers that “stick with the program” may be able to secure their own homemade form of “tax relief” and obtain a downward adjustment in their Unemployment Insurance payroll tax rate. More money to invest in hiring and training employees and updating investments in infrastructure is always a good thing.

If you have questions about unemployment insurance, the changes, Appeal Tribunal hearings, independent contractors or other issues, please contact Daniel Finerty at 414-226-4807, or any other Lindner & Marsack attorney at 414-273-3910.

GOVERNOR WALKER’S BUDGET SUBSTANTIALLY CHANGES WISCONSIN’S UNEMPLOYMENT INSURANCE SYSTEM – FOR THE BETTER

By: Daniel Finerty

Governor Scott Walker recently signed the 2013-2015 biennial budget bill, which was enacted as 2013 Wisconsin Act 20 (“Act 20”). Act 20 makes substantial changes and amendments to Wisconsin’s unemployment insurance law.

This E-Alert summarizes the Act 20 changes. Initially, it is important to note that these statutory changes are currently in effect; however, the changes will not affect unemployment insurance (“UI”) benefit determinations until the week of January 5, 2014. However, at that time, the changes will likely have a dramatic effect on the adjudication of UI claims by current and former employees against Wisconsin employers.

Act 20 changes several key provisions governing the payment of UI by Wisconsin employers. It strengthens the necessary “reasonable” search for work in which each claimant collecting UI must engage each week in order to keep collecting UI. It enhances the provisions which govern employee disqualification from UI eligibility as a result of misconduct, which is now defined to include specific conduct/offenses. It also creates a secondary, lower standard for disqualification as a result of the employee’s “substantial fault.” It eliminates, or amends, several of the

available exceptions which permit an employee to voluntarily quit work and collect UI benefits.

In doing so, Act 20 is expected to reduce the amount of benefits paid out by Wisconsin employers and strengthen the overall fiscal health of the UI system. Initially, when the UI changes were proposed before the Joint Finance Committee, the Department of Workforce Development estimated the changes would reduce UI benefit payments by Wisconsin employers by an estimated $14.1 million between July 1, 2013 and June 30, 2014 and

by $23.1 million between July 1, 2104 and June 30, 2015.

While these savings, in excess of $37 million over two years, may be partially offset by a higher UI tax rate that will be placed on Wisconsin employers, these reductions in payments to UI claimants amount to real, and much needed, savings for Wisconsin employers. That is, reductions for employers that effectively use the Act 20 changes and contest UI claims in order to both protect their UI reserve account and, in doing so, seek a reduction of their UI tax rate in the following year. Below is a bullet-point summary of the changes.

Eligibility

  •   Act 20 requires a UI claimant to undertake at least four (4) actions each week in order to establish that a reasonable search for suitable work has been made in order to maintain eligibility that week. A UI claimant is currently required to undertake two (2) actions.
  •   Additionally, the Department may increase an individual’s minimum number of actions required beyond four (4) actions in any week so long as it is a uniform change for similar types of claimants.Misconduct and Substantial Fault Disqualifications

 Act 20 revises the commonly-cited definition of “misconduct” by codifying the prior Labor and Industry Review Commission (“Commission”) and other case law to now specifically include the following situations where a claimant will be found guilty of misconduct if the employee is found to have committed the following offenses/conduct:

o Violation of an employer’s reasonable substance abuse policy concerning the use of alcohol beverages, use of a controlled substance or use of a controlled substance analog if the employee: 1) had knowledge of the alcohol beverage or controlled substance policy; and 2) admitted to

the use of alcohol beverages, a controlled substance, or controlled substance analog, refused to take a test or tested positive for the use of such substances in a test used by the employer in accordance with a DWD-approved testing methodology;

o Theft of an employer’s property, services, money (of any value), felonious conduct connected with an employee’s employment with his or her employer, or intentional or

negligent conduct by an employee that causes substantial damage to the employer’s property;

o Conviction of a crime or other offense, while on or off duty, involving a civil forfeiture that precludes the employee from working for the employer;

o One or more threats or acts of harassment, assault, or other physical violence instigated by an employee at the employer’s workplace;

o Absenteeism on more than two (2) occasions within the 120

days before the date of termination, unless permitted by the employer’s employment manual of which the employee acknowledged receipt, or excessive tardiness in violation of the employer’s policy, if the employee does not provide notice and one or more valid reasons for the absenteeism or tardiness (note: this provision replaces and strengthens the existing absenteeism/tardiness misconduct provision at Wis. Stat. § 108.04(5g));

o Falsifying the employer’s business records, unless directed by the employer; and,

o A willful and deliberate violation of a written and uniformly applied standard or regulation of the federal, state, or tribal government, an agency of which licenses the employer, which standard has been communicated by the employer to the employee and which violation would cause the employer to be sanctioned or to have its license or certification suspended by the agency, again, unless directed by the employer.

 Act 20 creates a secondary misconduct-type disqualification provision, referred to as “substantial fault,” which is defined to include those acts or omissions of an employee over which the employee exercised reasonable control and which violate

reasonable requirements of the employer but does not include the following:

o One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction;

o One or more inadvertent errors made by the employee; or,

o Any failure by the employee to perform work because of insufficient skill, ability or equipment.

 Be aware that “misconduct” and “substantial fault” determinations will disqualify an employee from collecting UI benefits for differing periods of time until certain conditions are met by the employee which may permit them to be eligible for UI payments.

“Voluntary Quit” Exceptions

 Act 20 eliminates nine of the “voluntary quit” exceptions and,

accordingly, an employee who quits employment for the following reasons will not be entitled to unemployment benefits after January 5, 2014:

o If the Department of Workforce Development (DWD) determines that the employee quit to accept a recall to work for a former employer within 52 weeks after having last worked for such employer;

o If the employee: 1) maintained a temporary residence near the work; 2) maintained a permanent residence in another locality; and 3) quit work and returned to his or her permanent residence because the work available to the employee had been reduced to less than 20 hours per week in at least two consecutive weeks;

o If DWD determines that the employee quit or lost his or her work because of reaching the compulsory retirement age used by the employer;

o If the employee quit part-time work if the employee is otherwise eligible to receive benefits because of the loss of the employee’s full-time employment and the loss of the full-time employment makes it economically unfeasible for the employee to continue the part-time work;

o If the employee quit work with a labor organization if the termination causes the employee to lose seniority rights granted under a collective bargaining agreement and if the termination results in the loss of the employee’s employment with the employer which is a party to that collective bargaining agreement;

o If the employee, serving as a part-time elected or appointed

member of a governmental body or representative of employees, quits work while being engaged in work for a different employer and was paid wages in the work quit by the employee constituting not more than 5% of the employee’s base period wages for purposes of benefit entitlement;

o If an employee quits one of two or more concurrently held positions, at least one of which is full-time work, if the employee terminates his or her work before receiving notice of termination from a position which is full-time work;

o If DWD determines that an employee, while claiming benefits for partial unemployment, quit work to accept employment or other work covered by UI law of any state or the federal government, if that work offered an average weekly wage greater than the average weekly wage earned in the terminated work; or,

o If DWD determines that the employee owns or controls, directly or indirectly, an ownership interest, however designated or evidenced, in a family corporation, and the employee’s employment was terminated by the employer because of an involuntary cessation of the business of the corporation under certain circumstances.

 Three of the remaining “voluntary quit” exceptions remain in effect but are amended as follows:

o An employee who accepts work which the employee could have failed to accept with “good cause” under Wis. Stat. § 108.04(7)(b) and terminated such work with the same good cause may only terminate such work within thirty (30) days after starting the work in order to be entitled to UI benefits, instead of the ten (10) week period formerly provided for in this section;

o An employee who quits work to accept certain types of employment or other work covered by UI laws of any state or the federal government will no longer be required to have earned wages in the subsequent work, repealing the former four (4) week earning requirement;

o An employee who quits work because his or her spouse

Analysis

changes their place of employment such that a commute is impractical and the employee quit to follow the spouse would only be permitted to collect UI benefits where the employee’s spouse is a member of the U.S. Armed Forces on active duty, the employee’s spouse was required by the U.S. Armed Forces to relocate to a place to which it is impractical for the employee to commute, and the employee terminated his or her work to accompany the spouse to that place.

These changes will impact not only the adjudication of UI claims but also will impact decision-making by Wisconsin employers involved in unemployment insurance benefits claim disputes during the initial claim investigation stage, at Appeal Tribunal hearings and throughout the process.

While the amendments broadly cover most of the territory that is commonly cited as among the “most frustrating” for Wisconsin employers, the most notable provisions may permit employers to contest more UI claims, and more garden-variety claims, by terminated employees.

Among these provisions are the changes that address more garden-variety employee terminations such as:

 The absenteeism/tardiness changes, provided the valid attendance/tardiness policy exists and has been provided to or acknowledged by the employee;

 The disqualification for an employee’s willful and deliberate violation of an employer’s written and uniformly applied standard, the violation of which could cause the employer “to be sanctioned,” which arguably includes an employer’s safety policies (note: it is not clear whether or not an actual sanction would have to be shown and is likely that the potential for sanction

will be sufficient if established by the employer); and,

 The disqualification for “substantial fault,” provided the employer can provide sufficient evidence of the employee’s reasonable control over the acts/omissions at issue, that the acts/omissions violate the employer’s policy, and that the acts/omissions are not minor infractions, inadvertent errors or failures due to insufficient skill, ability or equipment.

If you have questions about the proposed UI changes, Appeal Tribunal hearings or other appeals, or other issues, please contact Daniel Finerty at 414-226-4807, or any other Lindner & Marsack attorney at 414-273-3910.

THE JOINT FINANCE COMMITTEE PASSES SUBSTANTIAL PRO-EMPLOYER CHANGES TO WISCONSIN’S UNEMPLOYMENT INSURANCE LAW, WHICH ARE NOW PART OF THE PROPOSED 2013– 2015 BUDGET BILL.

By: Daniel Finerty

The 2013 – 2015 Biennial Budget bill currently in front of the Joint Financial Committee now includes Motion #506, which was passed yesterday by a vote of 12 – 4. Motion #506 contains a number of substantial amendments to the provisions of Wisconsin’s unemployment insurance (“UI”) law that are commonly cited by business owners, human resource professionals and others as among the most frustrating.

In short, these pro-employer changes will dramatically affect an employer’s decision regarding how, and which, UI claims to challenge and whether to appeal UI claims that have been granted to an Appeal Tribunal hearing in order to take advantages of the UI changes provided by this legislation to successfully defend the employer’s UI reserve account and, in doing so, ensure that the employer does not experience a tax increase when the account is evaluated the following July 1st.

Here is a quick summary of the changes that are part of Motion #506, which, if ultimately included in the budget signed by the Governor, would first apply to UI claims filed during the week of January 5, 2014:

 Misconduct is specifically defined by, to some extent, codifying the prior Labor and Industry Review Commission (“LIRC”) cases that have held misconduct can be found where an employee violates an employer rule and/or if found to have committed any of the following offenses:

o Violation of an employer’s reasonable substance abuse policy;

o Theft;

o Conviction of a crime or other offense involving a civil forfeiture that precludes the employee from working for the employer (e.g., a truck driver’s drunk driving citation);

o One or more threats or acts of harassment, assault, or other physical violence instigated by an employee in the workplace;

o Absenteeism on more than two (2) occasions within the 120

days before the date of termination, unless permitted by the employer’s employment manual, or excessive tardiness in violation of the employer’s policy, if the employee does not provide notice and one or more valid reasons for the absenteeism or tardiness;

o Falsifying business records, unless directed by the employer; and,

o A willful and deliberate violation of a written and uniformly applied standard or regulation of the federal, state, or tribal government, an agency of which licenses the employer, provided the violation could cause the employer to be sanctioned or to have its license or certification suspended by the agency.

 A secondary misconduct provision of lesser proof called “substantial fault,” which includes those acts or omissions of an employee over which the employee exercised reasonable control and which violated reasonable requirements of the employer but would not include the following:

o One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction;

o One or more inadvertent errors made by the employee; or,

o Any failure by the employee to perform work because of insufficient skill, ability or equipment.

  •   Require a UI claimant claiming benefits against a temporary help agency, in order to maintain eligibility each week, to conduct two (2) actions that constitute a reasonable search for suitable work (NOTE: another provision of the budget bill requires a UI claimant to conduct at least four (4) actions that constitute a reasonable search for suitable work but is not specifically limited to temporary help agencies);
  •   Modify the rules surrounding an employer’s complete holiday shutdown by reducing the number of hours that the employee could have worked or been paid by eight (8) hours, from the

current 32 hour level, during the holiday week if the employer provides the require advance notice to DWD of the designated federal or state holidays, which can be no more than seven (7) days total.

The Department of Workforce Development estimates that the foregoing provisions would reduce UI benefit payments by Wisconsin employers by an estimated $14.1 million between July 1, 2013 and June 30, 2014 and by $23.1 million between July 1, 2014 and June 30, 2015.

While Motion #506 does also increase the UI tax rates upon Wisconsin employers, and makes other changes to the financial structure of the program, it is likely that the anticipated reductions in the payment of UI benefits by employers may offset any tax increase that employers experience. However, if the UI changes are included in the budget bill and signed by the Governor, the UI tax increase can only be offset by lower benefit payments for Wisconsin employers that utilize these beneficial changes detailed above to appropriately defend their UI accounts.

By contrast, Wisconsin employers that do not utilize the UI changes to their advantage will likely feel the greater effect of the UI tax rate increase.

We will provide additional information regarding whether or not the UI changes are included in the final budget bill that is ultimately presented to the legislature for passage and the Governor for signature.

If you have questions about the proposed UI changes, Appeal Tribunal hearings or other appeals, or other issues, please contact Daniel Finerty at 414-226-4807, or any other Lindner & Marsack attorney at 414-273-3910.