By Ruder Ware Alumni
March 28, 2006
A new state law, 2005 Wisconsin Act 86, made various changes to the unemployment insurance provision of the state statutes. The changes became effective January 1, 2006. The new law increased the weekly benefit rates for eligible individuals. A second rate increase will take effect on January 1, 2007. The weekly rates had not been adjusted in several years.
The following is a summary of other changes rendered by Act 86:
Apply a partial-week disqualification to partial weeks of a family and medical leave, to partial weeks of a disqualification for a suspension if it affects only a portion of a week and to the week a termination occurs if it affects only a portion of a week.
Repeal the current requirement that a self-employed individual make a bona fide search for employment each week to be eligible for benefits even if the individual is eligible for a waiver of the requirement.
Create a specific disqualification relating to absences and tardiness without notice. Employers are required to have a written policy which is to include what constitutes a “tardy,” the process for giving notice, verification that the employee received the policy, one warning before discharge and uniform application. Provides that 6 tardies or 5 absences without notice within a twelve-month period will result in disqualification. To requalify, the individual must wait 6 weeks and have earned 6 times the employee’s weekly benefit rate. This change has a four year sunset.
Redefine employer fault to include an employer’s failure to respond to an adjudicator’s request for information during a fact-finding interview. Any benefits paid until a new decision is made will “stand as paid” unless an administrative law judge finds that the failure is with good cause.
Provide for an increase in the maximum weekly benefit rate. The increase beginning January 1, 2006 is $12 and the increase beginning January 1, 2007 will be $14.
Repeal the wage disregard to volunteer firefighters, volunteer EMTs and volunteer “first responder.”
Allow for revocation of the right of an employer agent to represent employers for continued failure to provide information during a fact finding investigation. The standard for allowing revocation of an agent’s privilege is agent failure to provide correct and complete information to the adjudicator in 5% of cases appealed to an appeal tribunal and there is no finding by the administrative law judge that the failure was for good cause.
Require all non-profit employers who have elected reimbursement financing to pay an assessment into a newly created account when there is a balance of unpaid and uncollectible benefit reimbursements. The assessment is equitable to the size of the organization. The maximum total amount assessed in any year is $200,000. If this is not enough to cover the outstanding bad debts the remaining balance will be carried over to the next year. This will prevent taxed employers from having to pay into the trust fund balancing account for the uncollectible liabilities of non-taxed employers.
The Federal SUTA Dumping Prevention Act of 2004 requires all states to amend their UI laws no later than January 1, 2006, to remain in compliance with federal law. SUTA dumping is manipulation of business transfers to obtain artificially low UI tax rates. Theses required changes mandate that UI account experience be transferred to the buyer of a business when both the seller and buyer are owned, controlled or managed by the same interests and they prohibit transfer of account experience when a new business acquires an existing business for the primary purpose of obtaining a tax rate lower than the standard new employer rate.
Contribution Reports: Employers with 75 or more employees who file their own reports must file via QTWRS, the DWD web-based reporting application. Wage Reports: Employers with 75 or more employees who file their own reports must file electronically, via QTWRS or one of the other automated media reporting options described at dwd.wisconsin.gov/uiben/wagehome.htm. Employer Agents: Agents who prepare reports on behalf of 25 or more employers must file their Contribution and Wage Reports electronically, using one of the reporting options described on the DWD.Wisconsin.gov Website. Agents who prepare reports on behalf of less than 25 employers must file Contribution Reports via QTWRS and Wage Reports via QTWRS or one of the other automated media reporting options. Penalties: Failure to comply with these filing requirements will result in penalties of $25 for each Contribution Report filed on paper, and $10 per employee for Wage Reports filed on paper.
Allow the Department of Workforce Development to file a lien against an individual who has been found personally liable for a corporate tax debt.
Change levy statute to provide that the levy fee is in addition to the levy amount so that the fee is not deducted from the amount sent to the Department. Also increases the levy fee from $5 to $15 for multiple-payment levies.
Define employee as someone who performs services for pay subject to the exclusions of 108.02(12)(b). Also clarifies that a sole owner or partner is not an employee with respect to services performed for their own business.
Repeal the exclusion that applies to the employment of certain employees who worked in the processing of fresh fruits and vegetables solely during the active processing seasons.
Limit the definition of professional employer organization to those organizations that are in the business on an ongoing basis of providing staffing services as stated in the professional employer organization statute. Also allows PEO and client to share responsibility for setting wages.
Create a statutory provision which makes the Department Conditions Of Employment Database reports admissible as prima facie evidence in UI hearings without need for certification by an expert. These reports are used to determine benefit eligibility when labor market and occupational data is necessary.
Permit use of up to $1 million in Reed Act funds for UI administration, if needed, in State Fiscal Year 2007. The Department will consult with the UI Advisory Council before any expenditure.
Allows for a study regarding the financing and viability of unemployment reserve fund.
Authorizes a half-time position in the Department of Justice.
As noted in above Item 3, a significant change in the law temporarily disqualifies an employee from receiving unemployment benefits when the employee was discharged for repeatedly failing to give notice of absences and/or tardiness. To invoke this disqualification, an employer must have a written policy that defines an occurrence of “absenteeism” or “tardiness,” creates specific procedures for reporting absences and late arrivals, and warns the employee of the potential consequences of failing to give appropriate notice. The employer must also have written verification that the employee received a copy of the written policy. This new disqualification provision has a four-year sunset clause.
Previously, employers had an extremely difficult time in challenging an employee’s entitlement to unemployment compensation benefits based upon discharge for absenteeism and tardiness. The change noted in above Item 3, now provides employers with a better means of challenging an employee’s entitlement to unemployment compensation benefits in such circumstances. However, an employer must meet the noted requirements. If you do not have an absenteeism/tardiness policy in effect or your current policy does not meet the requirements, you should adopt such a policy or revise your current policy to meet the requirements as needed.
If you have questions regarding the above, please contact any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.
This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.
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