LRB-3247/3
JTK:wlj:kjf
1999 - 2000 LEGISLATURE
October 20, 1999 - Introduced by Senators Baumgart and Zien, cosponsored by
Representatives Vrakas and Turner. Referred to Committee on Labor.
SB255,2,2
1An Act to repeal 108.04 (7) (i), 108.05 (1) (h) and (i), 108.18 (2) (b), 108.20 (5) to
2(9) and 108.22 (1) (a) 2. to 4.;
to renumber and amend 108.22 (1) (a) 5.;
to
3amend 20.445 (1) (gd), 20.445 (1) (ge), 20.445 (1) (gf), 20.445 (1) (gg), 20.445 (1)
4(gh) (title), 20.445 (1) (n), 20.445 (1) (nb), 108.02 (4), 108.02 (12) (a), 108.02 (12)
5(b) (intro.), 108.04 (1) (b) 2., 108.04 (2) (a) 1., 108.04 (2) (a) 2., 108.04 (5), 108.04
6(6), 108.04 (7) (title), 108.04 (7) (b), 108.04 (7) (h), 108.04 (11) (d), 108.04 (13) (d),
7108.05 (1) (j) (intro.), 108.05 (3) (a), 108.09 (2) (bm), 108.09 (4s), 108.15 (3) (e),
8108.151 (1), 108.16 (6) (e), 108.16 (6m) (e), 108.18 (2) (c), 108.18 (9) (figure)
9Schedule C, line 1, 108.18 (9) (figure) Schedule D, line 1, 108.19 (1e) (a), 108.19
10(1e) (d), 108.20 (3), 108.205 (2), 108.22 (1) (a) 1., 108.22 (1) (b), 108.22 (1) (c) and
11108.22 (8) (c) 1. a.; and
to create 20.445 (1) (nc), 108.02 (4) (b), 108.02 (12) (bm),
12108.04 (1) (c), 108.04 (2) (a) 3., 108.04 (7) (cm), 108.04 (7) (s), 108.04 (11) (cm),
13108.04 (13) (d) 3. b., 108.05 (1) (k) and (L), 108.05 (3) (c), 108.06 (2) (cm), 108.095,
14108.161 (3e) and 108.22 (1) (ac) of the statutes;
relating to: various changes
1in the unemployment insurance law, granting rule-making authority, making
2appropriations and providing penalties.
Analysis by the Legislative Reference Bureau
This bill makes various changes in the unemployment insurance law.
Significant provisions include:
Benefit rate changes
Currently, weekly unemployment compensation benefit rates for total
unemployment range from $44 for an employe who earns wages (or certain other
amounts treated as wages) of at least $1,100 during at least one quarter of the
employe's base period (period preceding a claim during which benefit rights accrue)
to $297 for an employe who earns wages (or certain other amounts treated as wages)
of at least $7,425 during any such quarter. This bill adjusts weekly benefit rates for
weeks of unemployment beginning on or after April 2, 2000, and before October 1,
2000, to rates ranging from $45 for an employe who earns wages (or certain other
amounts treated as wages) of at least $1,125 during at least one quarter of the
employe's base period to $305 for an employe who earns wages (or certain other
amounts treated as wages) of at least $7,625 during any such quarter; and beginning
on or after October 1, 2000, to rates ranging from $46 for an employe who earns wages
(or certain other amounts treated as wages) of at least $1,150 during at least one
quarter of the employe's base period to $313 for an employe who earns wages (or
certain other amounts treated as wages) of at least $7,825 during any such quarter.
Other benefit changes
Partial unemployment
Currently, if a claimant earns wages in a given week, the first $30 of the wages
are disregarded and the claimant's weekly benefit payment is reduced by 67% of the
remaining amount of wages earned, but no claimant is eligible to receive benefits for
any week if the benefits would be less than $5 and any wages that the claimant would
have earned in any week for work performed for his or her employer had the claimant
accepted available work from that employer are treated as wages earned for that
week. Any amount that a claimant earns for services performed as a volunteer fire
fighter or volunteer emergency medical technician in any week does not reduce the
claimant's weekly benefit payment for that week. With certain exceptions, if a
claimant works at least 35 hours in any given week for the employer that provided
at least 80% of the wages or certain other payments that the claimant received
during his or her base period (qualifying work period during which benefit rights
accrue), the claimant is ineligible to receive any benefits for that week.
This bill provides, in addition, that a claimant is ineligible to receive any
benefits for a week in which the claimant works a total of 40 or more hours for any
employer or employers.
Search for work
Currently, in order to receive benefits for a week in which a claimant earns no
wages, a claimant must seek suitable work during that week, unless otherwise
permitted by the department of workforce development (DWD) by rule. This bill
provides that, during the 104-week period beginning on the day the law resulting
from the bill takes effect, in order to receive benefits for a week in which a claimant
earns no wages, the claimant must conduct a reasonable search for suitable work
during that week, unless otherwise permitted by DWD by rule. Under the bill, the
search must include two actions each week that constitute a reasonable search as
prescribed by DWD by rule.
Benefits payable during voluntary leaves of absence
Currently, an employe is ineligible to receive benefits while the employe is on
a voluntary leave of absence granted for a definite period, until the period ends or
until the employe returns to work, whichever occurs first. This bill provides that if
an employe is granted a leave of absence for any portion of a week, the employe's
eligibility for benefits for that portion of a week shall be reduced by the amount of
wages that the employe could have earned had the leave not been granted, by
treating the wages that the employe would have earned for work the employe would
have performed during the leave as wages actually earned and applying the same
method for computing benefits that is used to determine the benefits payable to
employes who are partially unemployed. The bill provides that DWD shall estimate
the wages that an employe would have earned for any partial week if it is not possible
to compute the exact amount of wages that the employe would have earned for that
partial week.
Possession or use of controlled substances
Currently, if an employe is discharged for misconduct connected with his or her
work (interpreted by the courts to include only misconduct that evinces wilful or
wanton disregard of the employer's interests or carelessness or negligence in the
performance of duties to such degree or recurrence as to manifest culpability or
wrongful intent or exhibit such behavior as to endanger the physical safety of
persons on the work site), the employe is ineligible to receive benefits until seven
weeks have elapsed since the end of the week in which the discharge occurs and the
employe earns wages after the week in which the discharge occurs equal to at least
14 times the employe's weekly benefit rate in employment covered by the
unemployment compensation law of any state or the federal government. In
addition, all wages earned with the employer that discharges the employe are
excluded in determining the amount of any future benefits to which the employe is
entitled. If an employe is suspended for good cause connected with his or her work,
the employe is ineligible to receive benefits until three weeks have elapsed since the
end of the week in which the suspension occurs or until the suspension is terminated,
whichever occurs first. Under current law, DWD must prescribe, by rule, conditions
under which an employe's possession, use or impairment due to use of a controlled
substance (dangerous drug) or an employe's violation of a work rule relating to
controlled substances testing constitutes misconduct or good cause for suspension for
purposes of these provisions.
This bill deletes the requirement for DWD to promulgate this rule, thereby
leaving determination of misconduct or good cause for suspension under these
circumstances to be determined on a case-by-case basis.
Voluntary termination of work
Currently, if an employe voluntarily terminates his or her work with an
employer, the employe is generally ineligible to receive benefits until four weeks have
elapsed since the end of the week in which the termination occurs and the employe
earns wages after the week in which the termination occurs equal to at least four
times the employe's weekly benefit rate in employment covered by the
unemployment insurance law of any state or the federal government. However, an
employe may terminate his or her work and receive benefits without requalifying
under this provision if the employe terminates his or her work with good cause
attributable to his or her employer. In addition, an employe may voluntarily
terminate his or her work and receive benefits without requalifying under this
provision if the employe terminates his or her work because the employe's employer
made employment, compensation, promotion or job assignments contingent upon
the employe's consent to sexual contact or sexual intercourse.
This bill eliminates the second exception relating to sexual contact or sexual
intercourse, but specifically provides that "good cause" under the first exception
includes sexual harassment by an employer, an employer's agent or a co-worker of
which the employer knew or should have known but failed to take timely and
appropriate corrective action.
The bill also creates a new exception which provides that an employe may
voluntarily terminate his or her work and receive benefits without requalifying if the
employe terminates his or her work due to domestic abuse, concerns about his or her
personal safety or harassment or concerns about the personal safety or harassment
of members of the employe's household, the employe obtains a temporary or
permanent order from a court in this state or another jurisdiction relating to
domestic abuse, child abuse, harassment or contact with a child or vulnerable adult
prior to terminating his or her work and the employe demonstrates that the order
has been or is reasonably likely to be violated.
In addition, the bill creates another new exception which provides that an
employe may voluntarily terminate his or her work and receive benefits without
requalifying if the employe is hired to work a particular shift and the employe
terminates his or her work as the result of a requirement by his or her employer to
transfer his or her working hours to a shift occurring at a time that would result in
a lack of child care to his or her minor children, provided that the employe is able to
work and available to perform work during the same shift that the employe worked
in the employe's most recent work for that employer.
Under the bill, the cost of benefits paid to an employe under the sexual
harassment and child care exceptions is generally charged to the employer or
employers that employed the employe during his or her base period (recent work
period during which benefit rights accrue). The cost of benefits paid to an employe
under the abuse, contact and harassment exception is charged to the balancing
account of the unemployment reserve fund, which is financed from the contributions
(taxes) of all employers that are subject to a requirement to pay contributions, unless
the employe's employer or employers do not pay contributions, in which case the cost
of benefits is generally chargeable to the employe's employer or employers.
Employe status
Currently, in order to be eligible to claim benefits, an individual must, in
addition to other requirements, be an "employe" as defined in the unemployment
insurance law. Generally, an "employe" is an individual who performs services for
an employer in employment covered under the unemployment insurance law,
whether or not the individual is directly paid by the employer. However, an
individual is not an "employe" if the individual performs services as an independent
contractor. Except in the case of a logger or trucker performing services for an
employer other than a governmental or nonprofit employer, to be considered an
independent contractor, an individual must hold or have applied for an employer
identification number with the federal internal revenue service or must have filed
business or self-employment income tax returns with the federal internal revenue
service in the previous year, and must meet at least six of eight other conditions
concerning the individual's relationship to or direction or control over his or her
business or the services that he or she performs. This bill provides instead, that
during the four-year period beginning in the year 2000 (the specific date varies in
different situations), an independent contractor (other than a logger or trucker as
currently provided) must meet at least seven of ten conditions concerning the
individual's relationship to or control over his or her business or the services that he
or she performs. Two of the conditions that an individual may use to qualify as an
independent contractor require the individual to have a federal employer
identification number or to have filed business or self-employment income tax
returns with the federal internal revenue service based on the services performed as
an independent contractor. The other eight conditions are the same eight conditions
that an individual may use to qualify as an independent contractor under current
law.
Definition of base period
Currently, an employe's eligibility for and amount of benefits are determined
with reference to the employe's "base period", which is the work period consisting of
the first four of the five most recently completed quarters at the time that an employe
begins a "benefit year" (period during which benefits are payable). This bill provides
that, if an employe does not qualify to receive any benefits using the current
definition of "base period", the employe's base period shall be the four most recently
completed quarters at the time that an employe begins a benefit year. Under the bill,
an employe whose benefits are computed using the alternate base period may not
reuse any wages for a subsequent benefit claim based on the current definition of
"base period", except for payment of Wisconsin supplemental or federal extended
benefits (these benefits are paid during periods of high unemployment).
Tax changes
Solvency rate adjustment
Currently, all employers that engage employes in work that is covered under
the unemployment insurance law, other than governmental and nonprofit employers
that elect to pay directly for the cost of benefits, must pay contributions (taxes) to
finance unemployment insurance benefits. The total contribution rate of an
employer is equal to the sum of the employer's contribution rate and the employer's
solvency rate, each of which vary with the employment stability of the employer and
the solvency of the unemployment reserve 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, 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 fund
benefits not payable from any employer's account. This bill decreases the solvency
rate payable by employers having a taxable annual payroll for unemployment
insurance purposes of less than $500,000 when the unemployment insurance fund
has a balance of at least $900,000,000 from 0.02% of an employer's payroll to 0.00%
of an employer's payroll.
Special assessments payable by certain new employers
Currently, if a new employer is required to pay contributions (taxes) to the
unemployment reserve fund and the employer's account is overdrawn as of January
31 or June 30 following any of the first three calendar years that the employer is
subject to a contribution requirement because the total benefits charged to the
account exceed the total contributions credited to the account as of one of those dates,
the employer must pay a special assessment to the unemployment reserve fund in
the amount of 1.3% of the employer's annual taxable payroll for unemployment
insurance purposes for the calendar year preceding the year in which the account is
overdrawn. This bill repeals the requirement to pay this assessment.
Special assessments for information technology systems
Currently, each employer that is subject to a contribution requirement must
pay an annual special assessment for each year prior to 2000 in an amount that may
not exceed the lesser of 0.01% of the employer's annual taxable payroll for
unemployment insurance purposes or the employer's solvency contribution for that
year for the purpose of financing the design or development of unemployment
insurance information technology systems. The department of workforce
development (DWD) must reduce the solvency rate that an employer must pay in
each year prior to 2000 by the special assessment rate applicable to that employer
for that year. (The solvency rate is the portion of an employer's contribution rate that
is used to maintain the solvency of the unemployment reserve fund.) This bill makes
the special assessment requirement and solvency rate offset applicable to calendar
years 2000 and 2001. The bill also permits DWD to use the revenue generated by the
assessments only for renovation and modernization of the unemployment insurance
tax and accounting system.
Other changes
Quarterly wage report format
Currently, each employer that is subject to the unemployment insurance law
must file with DWD a quarterly report of the wages paid to each of its employes and
certain other information. Employers of 250 or more employes must file the report
using a medium approved by DWD. If an employer is delinquent in filing a report,
the employer is subject to a tardy filing fee of $15 to $115, depending on the number
of its employes. This bill applies this reporting requirement to all employers of 100
or more employes. The bill also provides that once an employer becomes subject to
the electronic reporting requirement, the employer must continue to report
electronically, regardless of the number of its employes, unless that requirement is
waived by DWD. Under the bill, an employer that becomes subject to an electronic
reporting requirement is not required to file electronically until the fourth quarter
after the quarter in which the requirement first applies. In addition, the bill changes
the amounts of the tardy filing fees from not less than $25 to not more than $75, and
permits DWD to assess a penalty against any employer that is subject to an electronic
reporting requirement and that fails to report using an electronic medium approved
by DWD in the amount of $10 for each employe whose information is not reported
using an approved electronic medium.
Use of interest and penalty revenues
Currently, DWD collects interest on late payments required to be made to DWD
by employers and various penalties for late payments and certain other infractions
under the unemployment insurance law. The revenues from interest and penalties
are used to finance administration of the unemployment insurance and other
employment security programs, including employment security building
construction costs and operation of public employment offices. This bill discontinues
use of these interest and penalty revenues for employment security building
construction and administrative purposes. Under the bill, the only authorized
purpose for which these revenues may be used is unemployment insurance
administration.
Fraudulent claims for benefits
Currently, if a person makes a false statement or representation in order to
obtain benefits that are payable to another person, DWD may file a civil lawsuit to
recover the amount of the benefits improperly paid. In addition, the person making
the fraudulent statement or representation is guilty of a misdemeanor and is subject
to a fine of not less than $100 nor more than $500 or imprisonment for not more than
90 days, or both, for each false statement or misrepresentation.
This bill provides, in addition, that DWD may, after an investigation, issue an
administrative determination requiring the repayment of any benefits that were
obtained in the name of another person and that were obtained by means of a false
statement or representation and may also require the offender to pay an additional
amount equal to not more than 50% of the amount of the benefits obtained. The
determination may be appealed.
Grace period for reimbursements
Currently, public employers and nonprofit organizations may elect, in lieu of
paying contributions to the unemployment reserve fund, to reimburse the fund for
any benefit payments made by the fund that are chargeable to these employers. Any
reimbursement is due not later than 20 days after DWD mails a bill to an employer
for the reimbursement. This bill provides if DWD receives any such reimbursement
by the last day of the month in which that 20th day occurs, the employer making the
reimbursement is not liable for any interest or penalty.
Reissuance of voided benefit checks
Currently, if an unemployment insurance benefit check is not presented for
payment within one year after its date of issue, the amount of the check is credited
to the unemployment reserve fund and a replacement check may be issued within
one year after the date on which the check becomes void.
This bill provides, instead, that, if an unemployment insurance benefit check
is not presented for payment within one year after its date of issue, the amount of
the check is credited to the unemployment reserve fund. The bill also provides that
a replacement check may be issued if the employe to whom the original check was
payable makes application therefor within six years after the date of issue of the
original check. The change is retroactive to checks issued on or after January 1, 1995.
Use of federal employment security moneys
Currently, federal moneys received by this state under the federal Reed Act of
1954 may be used to pay benefits or for employment security administration,
including unemployment insurance, the public employment service and related
statistical operations. This bill provides, in accordance with federal law, that the
moneys allocated to this state for federal fiscal years 2000, 2001 and 2002 may only
be used for unemployment insurance administration.
Charging of certain improperly paid benefits
Currently, when DWD pays benefits to an employe improperly due to a
departmental error, the account of the employer is not charged for the benefits. This
bill removes conflicting language in current law to clarify that if the employer is
subject to a requirement to pay contributions to the unemployment reserve fund, the
cost of any benefits that are improperly paid to an employe of the employer and that
are not recovered from that employe is charged to the balancing account of the
unemployment reserve fund. The bill also clarifies that if benefits are erroneously
paid to an employe due to the fault of an employer, the cost of the benefits is charged
to the employer's account rather than the balancing account regardless of whether
the benefits may have been paid as a result of a departmental error.
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:
SB255,9,133
20.445
(1) (gd)
Unemployment interest and penalty payments. From the
4moneys received as interest and penalties collected under ss. 108.04 (11) (c)
and (cm) 5and 108.22, assessments under s. 108.19 (1m) and forfeitures under s. 103.05 (5), all
6moneys not appropriated under. pars. (ge), (gf) and (gg) and all moneys transferred
7to this appropriation account from the appropriation account under par. (gh) for the
8payment of benefits specified in s. 108.07 (5) and
1987 Wisconsin Act 38, section
132 9(1) (c), for the payment of interest to employers under s. 108.17 (3m), for the payment
10of interest due on advances from the federal unemployment account under title XII
11of the social security act to the unemployment reserve fund, and for payments made
12to the unemployment reserve fund to obtain a lower interest rate or deferral of
13interest payments on these advances, except as otherwise provided in s. 108.20.
SB255, s. 2
14Section
2. 20.445 (1) (ge) of the statutes is amended to read:
SB255,9,1815
20.445
(1) (ge)
Unemployment reserve fund research. From the moneys
16received as interest and penalties collected under ss. 108.04 (11) (c)
and (cm) and
17108.22, the amounts in the schedule for research relating to the current and
18anticipated condition of the unemployment reserve fund under s. 108.14 (6).
SB255, s. 3
19Section
3. 20.445 (1) (gf) of the statutes is amended to read:
SB255,9,2520
20.445
(1) (gf)
Employment security Unemployment insurance administration. 21From the moneys received as interest and penalties collected under ss. 108.04 (11)
22(c)
and (cm) and (13) (c) and 108.22, the amounts in the schedule for the
23administration of
employment service programs and unemployment insurance
24programs under ch. 108
and s. 106.09 and federal or state unemployment insurance
25programs authorized by the governor under s. 16.54; and for payments to satisfy any
1federal audit exception concerning a payment from the unemployment reserve fund
2or any federal aid disallowance involving the unemployment insurance program.
SB255, s. 4
3Section
4. 20.445 (1) (gg) of the statutes is amended to read:
SB255,10,84
20.445
(1) (gg) (title)
Unemployment
information technology systems tax and
5accounting system; interest and penalties. From the moneys received as interest and
6penalties collected under ss. 108.04 (11) (c)
and (cm) and (13) (c) and 108.22, as a
7continuing appropriation, the amounts in the schedule for the purpose specified in
8s. 108.19 (1e).
SB255, s. 5
9Section
5. 20.445 (1) (gh) (title) of the statutes is amended to read:
SB255,10,1110
20.445
(1) (gh) (title)
Unemployment
information technology systems tax and
11accounting system; assessments.
SB255, s. 6
12Section
6. 20.445 (1) (n) of the statutes is amended to read:
SB255,10,2213
20.445
(1) (n)
Unemployment administration; federal moneys. All federal
14moneys received for the employment service under s. 106.09 (4) to (6), for the
15administration of unemployment insurance or for the performance of the
16department's functions under ch. 108, and for its other efforts to regularize
17employment,
except moneys appropriated under par. (nc), to pay the compensation
18and expenses of appeal tribunals and of councils and to pay allowances stimulating
19education during unemployment, to be used for such purposes
except as provided in
20s. 108.161 (3e), and to transfer to par. (nb) an amount determined by the treasurer
21of the unemployment reserve fund not exceeding the lesser of the amount specified
22in s. 108.161 (4) (d) or the amounts in the schedule under par. (nb)
.
SB255, s. 7
23Section
7. 20.445 (1) (nb) of the statutes is amended to read:
SB255,11,1124
20.445
(1) (nb) (title)
Unemployment
information technology systems tax and
25accounting system; federal moneys. As a continuing appropriation, the amounts in
1the schedule, as authorized by the governor under s. 16.54, for the purpose specified
2in s. 108.19 (1e). All moneys transferred from par. (n) for this purpose shall be
3credited to this appropriation account. Notwithstanding s. 20.001 (3) (a), the
4treasurer of the unemployment reserve fund shall transfer any unencumbered
5balance in this appropriation account that is not needed or available to carry out the
6purpose of this appropriation to the appropriation account under par. (n). No moneys
7may be expended from this appropriation unless the treasurer of the unemployment
8reserve fund determines that such expenditure is currently needed for the purpose
9specified in s. 108.19 (1e).
No moneys may be encumbered from this appropriation
10account after the beginning of the 3rd 12-month period beginning after May 21,
111998.