AB366: Bill Text

Contribution and solvency rate schedules

Currently, all employers that engage employees in work that is covered under the UI law, other than governmental, nonprofit, and Indian tribal employers that elect to pay directly for the cost of benefits, must pay contributions (taxes) to finance UI benefits. The total contributions of an employer are the sum of the contributions payable as a result of the employer's contribution rate and the contributions payable as a result of the employer's solvency rate, each of which varies with the employment stability of the employer and the solvency of the unemployment reserve fund (fund), from which benefits are paid. An employer's contributions payable as a result of its contribution rate are credited to the employer's account in the fund, while an employer's contributions payable as a result of its solvency rate are credited to the fund's balancing account, which is used to finance benefits not payable from any employer's account.

An employer's contribution rate is determined based upon the employer's reserve percentage. The employer's reserve percentage is the net balance of the employer's account as of the computation date (generally June 30), stated as a percentage of the employer's taxable payroll in the 12-month period ending on the computation date. Current law defines "taxable payroll" as the first $14,000 of wages paid by an employer to each employee during a calendar year. An employer's solvency rate is determined by reference to the employer's contribution rate and rises as the contribution rate rises.

Currently, there are four schedules of contribution rates and four schedules of solvency rates. The schedule that applies for any year depends upon the solvency of the fund on June 30 of the preceding year. Under current law, the following contribution rates apply to employers, effective January 1, 2015: 1) if an overdrawn employer has a negative reserve percentage of 7.0 percent or lower, but less than 8.0 percent, the contribution rate for such an employer is 9.25 percent of taxable payroll; 2) if an overdrawn employer has a negative reserve percentage of 8.0 percent or lower, but less than 9.0 percent, the contribution rate for such an employer is 10.00 percent of taxable payroll; and 3) if an overdrawn employer has a negative reserve percentage of 9.0 percent or greater, the contribution rate for such an employer is 10.70 percent of taxable payroll. For each of the contribution rates in each of the four schedules for overdrawn employers with negative reserve percentages of 7.0 or greater, the employer must pay a solvency rate of 1.30 percent of taxable payroll.

The bill repeals these contribution rates for overdrawn employers with negative reserve percentages lower than 7.0 percent. Under the bill, all overdrawn employers with negative reserve percentages of 6.0 percent or lower pay the same contribution rate of 8.50 percent of taxable payroll for each of the four schedules of contribution rates. The bill also repeals the corresponding solvency rates for overdrawn employers with negative reserve percentages of 7.0 percent or lower so that all overdrawn employers with negative reserve percentages of 6.0 percent or lower pay the same solvency rates.

Termination of work; exemptions from requalification requirements

Currently, unless an exemption applies, if an employee voluntarily terminates his or her work with an employer, the employee is generally ineligible to receive UI benefits until the employee satisfies certain requalification requirements. The bill recreates certain exemptions from the requalification requirements for employees who voluntarily terminate employment, which were repealed by 2013 Wisconsin Act 20, effective January 5, 2014, for the following circumstances:

1. The employee terminated his or her work to accept a recall to work for a former employer within 52 weeks after having last worked for that employer.

2. The employee maintained a temporary residence near the terminated work; the employee maintained a permanent residence in another locality; and the employee terminated the 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.

3. The employee left or lost his or her work because the employee reached the employer's compulsory retirement age.

4. The employee terminated part-time work because a loss of other, full-time employment made it economically unfeasible for the employee to continue the part-time work.

5. The employee terminated his or her work in a position serving as a part-time elected or appointed member of a governmental body or representative of employees; the employee was engaged in work for an employer other than the employer in which the employee served as the member or representative; and the employee was paid wages in the terminated work constituting not more than 5 percent of the employee's base period wages for purposes of entitlement for benefits.

6. The employee terminated his or her work in one of two or more concurrently held positions, at least one of which was full-time work, if the employee terminated his or her work before receiving notice of termination from a full-time work position.

7. The employee owns or controls an ownership interest in a family-owned corporation and the employee's employment was terminated because of an involuntary cessation of the business of the corporation under certain specified conditions.

Also under current law, effective January 5, 2014, an employee who voluntarily terminates his or her work with an employer is exempt from the requalification requirements if the employee's spouse is an active duty member of the U.S. armed forces who was required by the U.S. armed forces to relocate and the employee terminated his or her work to accompany the spouse to that place. Under the bill, the exemption is instead available to any employee who changed his or her place of employment to a place to which it is impractical to commute if the employee terminated his or her work to accompany the spouse to that place.

The bill does not affect any other exemptions from the requalification requirements for employees who voluntarily terminate employment.

Loans by this state to the unemployment reserve fund

Currently, effective January 1, 2014, the secretary of workforce development may request the secretary of administration to reallocate (loan) moneys to the unemployment reserve fund from other state funds or accounts. The total outstanding amount of reallocations may not exceed $50,000,000 at any given time. Any reallocation is subject to the approval of the Joint Committee on Finance. The secretary of administration may not assess any interest upon outstanding reallocations. The law provides that the secretary of workforce development must request a reallocation whenever the secretary determines that employers in this state that are subject to a requirement to pay a federal unemployment tax might experience a lower tax rate if this state were to loan moneys to the unemployment reserve fund and the loan could be made under existing law. The law also directs the secretary of workforce development to repay any loans made by this state to the unemployment reserve fund whenever the secretary determines that repayment can be made without jeopardizing the ability of DWD to continue to pay other liabilities and costs chargeable to the fund.

This bill deletes the authority to make reallocations to the unemployment reserve fund from other state funds and accounts.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB366,1 Section 1. 16.531 (4) of the statutes, as created by 2013 Wisconsin Act 20, is repealed.

AB366,2 Section 2. 20.002 (11) (a) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB366,7,23 20.002 (11) (a) All appropriations, special accounts and fund balances within the general fund or any segregated fund may be made temporarily available for the purpose of allowing encumbrances or financing expenditures of other general or segregated fund activities or for the purpose of financing unemployment insurance benefits from the unemployment reserve fund under par. (b) 3m. whenever there are insufficient that do not have sufficient moneys in the funds or accounts from which the activities are financed or whenever there are insufficient moneys in the unemployment reserve fund to pay unemployment insurance benefit payments if there are accounts receivable balances or moneys anticipated to be received from lottery proceeds, as defined in s. 25.75 (1) (c), tax or contribution revenues, gifts, grants, fees, sales of service, or interest earnings recorded under s. 16.52 (2) that will be sufficient to repay the fund or account from which moneys are transferred. The secretary of administration shall determine the composition and allowability of the accounts receivable balances and anticipated moneys to be received for this purpose in accordance with s. 20.903 (2) and shall specifically approve the use of surplus moneys from the general or segregated funds after consultation with the appropriate state agency head for use by specified accounts or programs. The secretary of administration shall reallocate available moneys from the budget stabilization fund under s. 16.465 prior to reallocating moneys from any other fund.

AB366,3 Section 3. 20.002 (11) (b) 1. of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB366,8,3 20.002 (11) (b) 1. Except with respect to reallocations made under subd. 3m., the The secretary of administration shall limit the total amount of any temporary reallocations to a fund other than the general fund to $400,000,000.

AB366,4 Section 4. 20.002 (11) (b) 3m. of the statutes, as created by 2013 Wisconsin Act 20, is repealed.

AB366,5 Section 5. 20.002 (11) (c) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB366,8,18 20.002 (11) (c) The secretary may assess a special interest charge against the programs or activities utilizing surplus moneys within the same fund under this subsection in an amount not to exceed the daily interest earnings rate of the state investment fund during the period of transfer of surplus moneys to other accounts or programs. Except as provided in s. 16.465 and except with respect to transfers made under par. (b) 3m., the secretary shall assess a special interest charge against the fund utilizing surplus moneys under this subsection in an amount equal to the rate of return the state investment fund earnings would have created to the fund from which the reallocation was made. This interest shall be calculated and credited to the appropriate fund at the same time the earnings from the state investment fund are distributed and shall be considered an adjustment to those earnings.

AB366,6 Section 6. 20.002 (11) (d) (intro.) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB366,8,25 20.002 (11) (d) (intro.) Except with respect to transfers made under par. (b) 3m., this This subsection applies only to those funds participating in the investment fund for purposes of temporary reallocation between funds or accounts. No transfer may be made under this subsection from and does not include any of the following funds or specified accounts in these funds:

AB366,7 Section 7. 108.02 (15m) (intro.) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB366,9,4 108.02 (15m) Family corporation. (intro.) "Family Except as provided in s. 108.04 (7) (r), "family corporation" means:

AB366,8 Section 8. 108.04 (2) (a) 2. of the statutes, as affected by 2013 Wisconsin Acts 11 and 20, is amended to read:

AB366,9,8 108.04 (2) (a) 2. Except as provided in s. 108.062 (10m), as of that week, the individual has registered for work as directed by the department; and

AB366,9 Section 9. 108.04 (2) (a) 3. (intro.) of the statutes, as affected by 2013 Wisconsin Acts 11 and 20, is amended to read:

AB366,9,23 108.04 (2) (a) 3. (intro.) The individual conducts a reasonable search for suitable work during that week, unless the search requirement is waived under par. (b) or s. 108.062 (10m). The search for suitable work must include at least 4 2 actions per week that constitute a reasonable search as prescribed by rule of the department. In addition, the department may, by rule, require an individual to take more than 4 reasonable work search actions in any week. The department shall require a uniform number of reasonable work search actions for similar types of claimants. This subdivision does not apply to an individual if the department determines that the individual is currently laid off from employment with an employer but there is a reasonable expectation of reemployment of the individual by that employer. In determining whether the individual has a reasonable expectation of reemployment by an employer, the department shall request the employer to verify the individual's employment status and shall also consider other factors, including:

AB366,10 Section 10. 108.04 (2) (i) of the statutes, as created by 2013 Wisconsin Act 20, is repealed.

AB366,11 Section 11. 108.04 (5) (a) to (d) of the statutes, as created by 2013 Wisconsin Act 20, are repealed and recreated to read:

AB366,10,7 108.04 (5) (a) A violation by an employee of an employer's reasonable written policy concerning the illegal use of a controlled substance or controlled substance analog, or the consumption of alcohol beverages, if the policy is uniformly applied to all employees of the employer and the employee had knowledge of the employer's policy, and if the employee:

AB366,10,11 1. Admitted to the use of a controlled substance or controlled substance analog or tested positive for the use of a controlled substance or controlled substance analog in a test used by the employer in accordance with a testing methodology approved by the department; or

AB366,10,13 2. Consumed alcohol beverages or was under the influence of alcohol beverages during working hours.

AB366,10,15 (b) Theft of an employer's property or services with intent to deprive the employer of the property or services permanently, or theft of currency of any value.

AB366,10,18 (c) Conviction of an employee of a crime, while on or off duty, if the conviction makes it impossible for the employee to perform the duties that the employee performs for the employer.

AB366,10,24 (d) Unless directed by the employer, a willful and deliberate violation of a written or uniformly applied standard or regulation of the federal government or a state or local government by an employee of an employer that is licensed or certified by a governmental agency, which standard or regulation has been communicated by the employer to the employee and which violation would cause the employer to be fined or to have its license or certification suspended by the agency.

AB366,12 Section 12. 108.04 (5) (e) to (g) of the statutes, as created by 2013 Wisconsin Act 20, are repealed.

AB366,13 Section 13. 108.04 (5g) of the statutes, as affected by 2013 Wisconsin Act 20, is repealed and recreated to read:

AB366,11,15 108.04 (5g) Discharge for failure to notify an employer of absenteeism or tardiness. (a) If an employee is discharged for failing to notify his or her employer of absenteeism or tardiness that becomes excessive, and the employer has complied with the requirements of par. (d) with respect to that employee, the employee is ineligible to receive benefits until 6 weeks have elapsed since the end of the week in which the discharge occurs and the employee earns wages after the week in which the discharge occurs equal to at least 6 times the employee's weekly benefit rate under s. 108.05 (1) in employment covered by the unemployment insurance law of any state or the federal government. For purposes of requalification, the employee's weekly benefit rate shall be the rate that would have been paid had the discharge not occurred.

AB366,11,18 (b) For purposes of this subsection, tardiness becomes excessive if an employee is absent for 4 or more scheduled workdays in the 120-day period preceding the date of the discharge without providing adequate notice to his or her employer.

AB366,11,22 (c) For purposes of this subsection, absenteeism becomes excessive if an employee is absent for 2 or more scheduled workdays in the 120-day period preceding the date of the discharge without providing adequate notice to his or her employer.

AB366,11,24 (d) 1. The requalifying requirements of par. (a) apply only if the employer has a written policy on notification of tardiness or absences that:

AB366,11,25 a. Defines what constitutes a single occurrence of tardiness or absenteeism.

AB366,12,4 b. Describes the process for providing adequate notice of tardiness or absence and, with respect to tardiness, gives the employee a reasonable amount of time to provide notice including, at a minimum, the opportunity to provide that notice as soon as practically possible; and

AB366,12,6 c. Notifies the employee that failure to provide adequate notice of an absence or tardiness may lead to a discharge.

AB366,12,9 2. The employer shall provide a copy of the written policy under subd. 1. to each employee and shall have written evidence that the employee received a copy of the policy.

AB366,12,12 3. The employer must have given the employee at least one warning concerning the employee's violation of the employer's written policy under subd. 1. within the 120-day period preceding the date of the discharge.

AB366,12,14 4. The employee must apply the written policy under subd. 1. uniformly to all employees of the employer.

AB366,12,18 (e) The department shall charge to the fund's balancing account the cost of any benefits paid to an employee that are otherwise chargeable to the account of an employer that is subject to the contribution requirements under ss. 108.17 and 108.18 if the employee is discharged by that employer and par. (a) applies.

AB366,12,20 (em) If an employee is not disqualified under this subsection, the employee may nevertheless be subject to disqualification under sub. (5).

AB366,14 Section 14. 108.04 (7) (d), (g), (j), (k), (n), (o) and (r) of the statutes are created to read:

AB366,12,25 108.04 (7) (d) Paragraph (a) does not apply if the department determines that the employee terminated his or her work to accept a recall to work for a former employer within 52 weeks after having last worked for such employer.

AB366,13,2 (g) Paragraph (a) does not affect an employee's eligibility to receive benefits if the employee:

AB366,13,3 1. Maintained a temporary residence near the work terminated; and

AB366,13,4 2. Maintained a permanent residence in another locality; and

AB366,13,7 3. Terminated such 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 2 consecutive weeks.

AB366,13,10 (j) Paragraph (a) does not apply if the department determines that the employee left or lost his or her work because of reaching the compulsory retirement age used by the employee's employing unit.

AB366,13,15 (k) Paragraph (a) does not apply to an employee who terminates his or her 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.

AB366,13,16 (n) Paragraph (a) does not apply to an employee who:

AB366,13,18 1. Terminated work in a position serving as a part-time elected or appointed member of a governmental body or representative of employees;

AB366,13,21 2. Was engaged in work for an employing unit other than the employing unit in which the employee served under subd. 1. at the time that the employee terminated work under subd. 1.; and

AB366,13,23 3. Was paid wages in the terminated work constituting not more than 5 percent of the employee's base period wages for purposes of benefit entitlement.

AB366,14,2 (o) Paragraph (a) does not apply to an employee who terminates his or her work in one of 2 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 that is full-time work.

AB366,14,13 (r) Paragraph (a) does not apply if the department 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 one or more of the conditions specified in sub. (1) (gm). In this paragraph, "family corporation" has the meaning given in s. 108.02 (15m) and includes a corporation or a limited liability company that is treated as a corporation under this chapter in which 50 percent or more of the ownership interest is or was owned or controlled, directly or indirectly, by one or more brothers or sisters of a claimant, or by a combination of one or more brothers or sisters and one or more of the persons specified in s. 108.02 (15m) (a).

AB366,15 Section 15. 108.04 (7) (h) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB366,14,20 108.04 (7) (h) The department shall charge to the fund's balancing account benefits paid to an employee that are otherwise chargeable to the account of an employer that is subject to the contribution requirements of ss. 108.17 and 108.18 if the employee voluntarily terminates employment with that employer and par. (a), (c), (d), (e), (k), (L), (o), (q), (s), or (t) applies.

AB366,16 Section 16. 108.04 (7) (t) of the statutes, as affected by 2013 Wisconsin Act 20, is repealed and recreated to read:

AB366,15,2 108.04 (7) (t) Paragraph (a) does not apply if the department determines that the employee's spouse changed his or her place of employment to a place to which it is impractical to commute and the employee terminated his or her work to accompany the spouse to that place.

AB366,17 Section 17. 108.14 (8n) (e) of the statutes, as affected by 2013 Wisconsin Acts 20 and 36, is amended to read:

AB366,15,18 108.14 (8n) (e) The department shall charge this state's share of any benefits paid under this subsection to the account of each employer by which the employee claiming benefits was employed in the applicable base period, in proportion to the total amount of wages he or she earned from each employer in the base period, except that if s. 108.04 (1) (f), (5), (7) (a), (c), (d), (e), (k), (L), (o), (q), (s), or (t), (7m) or (8) (a) or 108.07 (3), (3r), or (5) (b) would have applied to employment by such an employer who is subject to the contribution requirements of ss. 108.17 and 108.18, the department shall charge the share of benefits based on employment with that employer to the fund's balancing account, or, if s. 108.04 (1) (f) or (5) or 108.07 (3) would have applied to an employer that is not subject to the contribution requirements of ss. 108.17 and 108.18, the department shall charge the share of benefits based on that employment in accordance with s. 108.07 (5) (a) and (b). The department shall also charge the fund's balancing account with any other state's share of such benefits pending reimbursement by that state.

AB366,18 Section 18. 108.141 (7) (a) of the statutes, as affected by 2013 Wisconsin Acts 20 and 36, is amended to read:

AB366,16,2 108.141 (7) (a) The department shall charge the state's share of each week of extended benefits to each employer's account in proportion to the employer's share of the total wages of the employee receiving the benefits in the employee's base period, except that if the employer is subject to the contribution requirements of ss. 108.17 and 108.18 the department shall charge the share of extended benefits to which s. 108.04 (1) (f), (5), (7) (a), (c), (d), (e), (k), (L), (o), (q), (s), or (t), (7m) or (8) (a) or 108.07 (3), (3r), or (5) (b) applies to the fund's balancing account.

AB366,19 Section 19. 108.16 (13) of the statutes, as created by 2013 Wisconsin Act 20, is repealed.

AB366,20 Section 20. 108.18 (4) (figure) Schedule A line 23. of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

Figure 108.18 (4):

Schedule A - See PDF for table

- See PDF for table

AB366,21 Section 21. 108.18 (4) (figure) Schedule A lines 24. to 26. of the statutes, as created by 2013 Wisconsin Act 20, are repealed.