By Sally A. Piefer

Under Wisconsin law, an employee is disqualified from receiving benefits if the employee engages in misconduct or substantial fault. In 2013, the Wisconsin legislature changed the definition of misconduct. With the change, Wisconsin law explicitly recognized that an employee’s absenteeism/tardiness can constitute misconduct, and therefore disqualified an employee from receiving unemployment compensation benefits:

Absenteeism by an employee on more than 2 occasions within the 120-day period before the date of the employee’s termination, unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature, or excessive tardiness by an employee in violation of a policy of the employer that has been communicated to the employee, if the employee does not provide to his or her employer both notice and one or more valid reasons for the absenteeism or tardiness.

This particular provision was challenged Wis. Dep’t of Workforce Dev. v. Wis. Labor & Indus. Review Comm’n, 2017 WI App 29, ¶ 4, 375 Wis. 2d 183, 895 N.W.2d 77 (“Beres”). The employee in Beres worked for an employer whose written attendance policy stated that it could discharge an employee during the probationary period if the employee failed to call in at least two hours prior to the employee’s scheduled shift. The employee – Beres – was absent due to an illness and failed to comply with the employer’s 2-hour call in procedure during her probationary period. She was terminated for failing to follow the procedure.

When Beres applied for unemployment benefits, DWD concluded she was disqualified from receiving benefits because she violated her employer’s attendance policy. The Department of Workforce Development (DWD) determined the employer could enact a stricter attendance policy than the one outlined in the statute, and that Beres was not entitled to unemployment benefits because she violated her employer’s stricter requirement. When Beres appealed, the Commission reversed DWD’s decision and awarded unemployment benefits, concluding that an employee could not be denied benefits on the basis of an employer’s attendance policy that was stricter than the absenteeism policy in the statute. DWD appealed this decision, and the Circuit Court agreed with DWD’s interpretation of the law. The Wisconsin Court of Appeals then reversed the Circuit Court’s opinion and adopted the Commission’s position. The case went to the Wisconsin Supreme Court.

The sole issue before the Wisconsin Supreme Court was as follows:

Does Wis. Stat. § 108.04(5)(e) allow an employer to adopt an attendance or absenteeism policy that differs from that set forth in § 108.04(5)(e) such that termination of an employee for violating the employer’s policy results in disqualification for unemployment compensation benefits even if the employer’s policy is more restrictive on the employee?

The Court answered the question in the affirmative, finding that:

[T]he plain language of Wis. Stat. § 108.04(5)(e) allows an employer to adopt its own absenteeism policy that differs from the policy set forth if § 108.04(5)(e), and that termination for the violation of the employer’s absenteeism policy will result in disqualification from receiving unemployment compensation benefits even if the employer’s policy is more restrictive than the absenteeism policy set forth in the statute.

Because Beres was terminated for not complying with her employer’s absenteeism policy, she was not entitled to unemployment benefits. The Court explicitly stated that its interpretation of Wis. Stat. § 108.04(5)(e) “makes clear that an employer can opt out of the statutory definition of ‘misconduct’ and set its own absenteeism policy, the violation of which will constitute statutory ‘misconduct.’” The Court concluded that “an employee will be considered to have been terminated for ‘misconduct,’ and thus disqualified from obtaining unemployment compensation benefits, if the employee violates the statutory definition of absenteeism, except if the employee adheres to the employer’s absenteeism policy specified in the employment manual of which the employee acknowledged receipt” through a signature.

Immediately following the Beres decision, the Labor & Industry Review Commission (LIRC) repeatedly interpreted unemployment compensation law in accordance with Beres. Beginning in 2019, shortly after Tony Evers, a Democrat, took office, LIRC began to backtrack on this position. Initially, LIRC concluded that an employee who was terminated for violating an employer’s attendance policy was not discharge for misconduct, but instead was terminated for substantial fault.

In July 2022, LIRC issued a decision in which it found that an employee who was terminated for violating his employer’s attendance policy did not constitute either misconduct or substantial fault. On appeal, the Circuit Court in Waukesha County issued a decision reversing LIRC’s decision. The employer had its own attendance policy, which was published in the employee handbook. The employee had notice of the policy. Under the policy, the employee received points for certain attendance violations. Employees who exceed a certain number of points are subject to termination. The employee at issue had a history of attendance violations, and was eventually terminated after exceeding the threshold number of points for a second time.

The Circuit Court concluded that the statutory provision which discusses misconduct in connection with an employer’s own attendance policy was not ambiguous, and that the Wisconsin Supreme Court’s decision in Beres was controlling. In addition, the Court stated that Beres was decided in June of 2018, and that if the legislature believed Beres was wrongly decided, it had nearly five years to signal the decision was incorrect. The Circuit Court concluded the employee was terminated for misconduct and therefore ineligible for benefits. Stay tuned for further developments on this front—both LIRC and DWD have filed appeals and the case will now be decided by the Wisconsin Court of Appeals.