AB553: Bill Text

Rule making

The bill directs DWD to submit proposed rule changes to the legislative council staff no later than the first day of the 11th month beginning after the day the bill becomes law to:

1. Decrease the number of hours per week that a claimant must remain available for work in order to receive benefits from 35 to 32.

2. Establish a specified level of repeated absenteeism or repeated tardiness that will permit an employer to terminate an employee without being required to pay the cost of any benefits for which the employee may qualify resulting from the base period applicable to the date of termination, and that will preclude the employee from receiving benefits without requalifying by working for a specified period and receiving a specified amount. (Currently, the degree of absenteeism or tardiness that permits such action varies depending upon the facts of each case.)

3. Specify, in accordance with applicable administrative and judicial interpretations, what constitutes an "establishment" for purposes of a current disqualification from receipt of benefits because of a labor dispute in the establishment in which an employee is or was employed.

The bill also directs DWD to promulgate an emergency rule no later than the 90th day after the bill becomes law to extend the current deadline for filing an initial claim for benefits from the end of the initial week for which benefits are payable to the end of the following week. Currently, emergency rules are generally effective for no more than 150 days. Under the bill, this emergency rule is effective until the first day of the 11th month after the day on which the bill becomes law or the day on which a permanent rule relating to this subject matter becomes effective, whichever is sooner, and no finding of emergency is required to promulgate the emergency rule.

Tax changes

Claimant eligibility reviews

This bill directs DWD to conduct reviews of claimants for unemployment insurance benefits in the 2001-03 fiscal biennium to verify adherence to work search requirements and other conditions of eligibility.

Deferral of first quarter contribution liability

Currently, if an employer is liable for the payment of contributions (taxes), the employer must make regular payments for the periods specified by DWD. This bill codifies the existing requirement that these payments be made on a quarterly basis. The bill also permits an employer that has a first quarter contribution liability of at least $5,000 and that is not delinquent in making its contribution payments or in paying any interest, penalties or fees assessed against the employer for unemployment insurance purposes to defer payment of up to 60% of the contribution liability of the employer for the first quarter of the year in which the liability accrues (normally payable by April 30) without payment of interest, if the employer pays at least 30% of that liability by the following July 31, an additional 20% of that liability by the following October 31 and any remaining liability by the following January 31. Under the bill, if an employer fails to make a deferred payment of contribution liability when due, the employer must pay interest on all contribution liability for the calendar year in which the liability accrues retroactive to April 30 of that year.

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 2002 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 renovation and modernization of the unemployment insurance tax and accounting system. DWD must reduce the solvency rate that an employer must pay in each year prior to 2002 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 2002 and 2003. The bill also permits DWD to use the revenue generated by the assessments for the design, or development of, unemployment insurance information technology systems generally, including the tax and accounting system.

Other changes

Coverage of and financing of benefits by Indian tribes and tribal units

Currently, the unemployment insurance law of this state applies to Indian tribes so that the tribes or units are generally subject to the requirement to pay contributions (taxes) to this state on services performed for them and employees of the tribes are potentially eligible to claim benefits. However, under federal law, tribes that are recognized by the federal government are not generally subject to the jurisdiction of this state except as federal law permits or requires. On December 20, 2000, the federal government required this state to make Indian tribes subject to the unemployment insurance law of this state and to pay benefits to employees of the tribes to the same extent as other employers and employees generally.

This bill specifically applies the unemployment insurance law of this state to Indian tribes and their employees. However, in accordance with federal requirements, the bill accords Indian tribes, tribal units, or combinations of tribal units the privilege of financing the payment of benefits to their employees on a reimbursement basis after benefits are claimed in lieu of payment of regular contributions as is generally required of most other employers. The bill also prescribes procedures for and restrictions on the election of reimbursement financing by Indian tribes, tribal units, and combinations of tribal units.

Coverage of certain services provided to medical assistance recipients

Currently, under the medical assistance (MA) program administered by the department of health and family services (DHFS), this state provides assistance to finance certain health care costs of needy individuals. Private-duty nursing service or part-time intermittent care provided to an MA recipient by an individual who is certified by DHFS as a nurse in independent practice or an independent nurse practitioner and respiratory care service provided to an MA recipient by an individual who is certified by DHFS as a provider of respiratory care services in independent practice are generally subject to contribution requirements (taxation) under the state unemployment insurance law and the individuals who perform these services are potentially eligible to claim benefits. This bill eliminates coverage of these services under the state unemployment insurance law if they are provided by an individual who is not an employee of a home health agency (an organization licensed by DHFS that provides skilled nursing and other therapeutic services). Under the bill, the recipients of these services are no longer subject to contribution requirements and claimants are no longer eligible to claim benefits based on the performance of these services.

Coverage of certain nonresident aliens

Currently, the services of nonresident aliens who are lawfully admitted to the United States for certain purposes, as well as the services of their spouses and minor children who are admitted for the same purposes, are subject to contribution requirements (taxes) under the state unemployment insurance law, but the employees who perform these services are generally not eligible to claim benefits. This bill eliminates coverage of services performed by certain kinds of nonresident aliens who are lawfully admitted to the United States under certain specified visas, thereby eliminating contribution requirements for services performed by these individuals. The change does not affect coverage of services performed by spouses or minor children of these aliens if the spouses or children are not admitted to the United States for the same purposes as their spouses or parents. The change applies retroactively to January 1, 1999.

Contribution report format

Currently, each employer that is subject to the unemployment insurance law must file with DWD periodic reports of contributions (taxes). This bill provides that, if an employer retains an agent to file contribution reports and the agent files contribution reports on behalf of 25 or more employers, the agent must file the contribution reports electronically. Under the bill, employer agents that are subject to this requirement and that fail to file their reports electronically may be assessed a penalty of $25 for each employer whose report is not filed electronically.

Temporary reserve appeal tribunals

Currently, DWD employs individuals to serve as "appeal tribunals," who hear and decide appeals of initial determinations made by employees of DWD with respect to unemployment insurance matters. With limited exceptions, these individuals must be permanent employees of DWD. This bill permits DWD to employ an individual who formerly served as an appeal tribunal, and who retired from state service as a permanent employee, to serve as a temporary reserve appeal tribunal. The individual must be an attorney who is licensed to practice in this state. Currently, the rates of pay for limited term state employees are fixed under the state compensation plan. This bill provides that the compensation plan must include a provision specifying that, if an individual receives a limited term appointment as a temporary reserve appeal tribunal, DWD may compensate the individual at a rate not more than the base pay rate that the individual was paid at the time of his or her separation from DWD, plus any intervening adjustment made since that separation.

Treatment of employee leasing arrangements

Currently, an employer is generally liable for contributions (taxes) or benefit reimbursements based on an individual's employment if the individual is subject to the employer's control or direction over the performance of the individual's services. However, if an individual performs services for a client or customer of an employee service company under contract, the employee service company is liable for the contributions (taxes) or benefit reimbursements based on those services under certain specified conditions. This bill discontinues the existing category of "employee service company" and replaces it with two new categories called "professional employer organization" and "temporary help company." Under the bill, a professional employer organization or a temporary help company is treated as the employer of individuals who perform services for the entities with whom the organizations or companies contract under certain specified conditions. Professional employer organizations generally engage individuals on an ongoing basis to perform services for the entities with whom they contract, whereas temporary help companies engage individuals on a temporary basis to support or supplement the workforce of the entities with whom they contract.

Electronic submissions

Under current state law, unless otherwise provided, any document that may be submitted in writing to a state agency and that requires a signature may, with the consent of the agency, be submitted in electronic format. Federal law may also require or permit state agencies to accept certain documents electronically. This bill specifically permits DWD to provide a secure means of electronic interchange between itself and employing units, claimants, and other persons which, upon request to and with prior approval by DWD, may be used for departmental transmission or receipt of any document that is related the administration of the unemployment insurance law in lieu of any other means of submission or receipt currently provided. The bill also provides that, if a due date is established by statute for the receipt of any document that is submitted electronically to DWD, then that submission is timely only if the document is submitted by midnight of that due date.

Liens for unpaid reimbursements and certain forfeitures

Currently, if an employer owes any contributions (taxes), interest, or fees to DWD, DWD has a lien on the employer's real and personal property located in this state at the time that DWD issues any initial determinations of liability, unless the lien is temporarily barred or stayed under bankruptcy or other insolvency law. This bill provides that DWD has a lien under the same conditions for any unpaid civil penalties imposed by DWD under the unemployment insurance law and for unpaid reimbursements of benefits payable by an employer that has elected to reimburse the unemployment reserve fund for benefits paid on its behalf instead of making contributions to the fund.

Administrative levies to collect certain liabilities

Currently, a governmental or nonprofit employer is generally permitted to elect to finance benefit payments by reimbursing the unemployment reserve fund for the cost of benefits charged to its account rather than by paying regular contributions (taxes) to finance these benefits. If a reimbursement is not paid when due, DWD may collect the reimbursement by bringing a lawsuit against the debtor in circuit court. This bill permits DWD to administratively levy against any property other than realty of a person who fails to pay a reimbursement when due. Under the levy procedure, the person in possession of property that is subject to levy must surrender the property to DWD and DWD applies the property to offset the amount owed by the owner, plus the expenses of the levy.

Currently, DWD may proceed against any third party that has in its possession property that is subject to levy for payment of delinquent contributions or penalties administratively assessed by DWD, or for repayment of benefit overpayments. A third party is not liable for more than 25% of the debt owed by the original debtor. This bill permits DWD to use the levy procedure to recover property owed to DWD by third parties, subject to the current limitations, for unpaid contributions and penalties and benefit overpayments that have not been repaid, as well as for unpaid reimbursements.

The bill also permits DWD to administratively levy against the property of any person who fails to pay fees assessed by DWD under the unemployment insurance law.

Partial successorship

Currently, if at least 25% of a business is transferred from one employer to another employer and the transferee requests DWD to treat it as a successor to the transferor for purposes of unemployment insurance experience, including contribution and benefit liability, DWD must treat the transferee as a successor, instead of treating it as a new employer, under certain conditions. This bill precludes a transferee from requesting that it be treated as a successor to a transferor unless 100% of the transferor's business is transferred to a single transferee, except that the bill requires that a transferee be treated as a successor, under certain conditions, if 100% of the transferor's business is transferred to the transferee or if the transferor's unemployment insurance account is overdrawn on the date of the transfer.

Fraud detection and prosecution

This bill requires DWD to furnish annually to the council on unemployment insurance a report summarizing DWD's activities related to detection and prosecution of unemployment insurance fraud. Currently, no such report is required.

Funding and position changes

This bill authorizes 15.0 federally funded project positions for DWD to carry out unemployment insurance information technology system redesign projects. The bill also appropriates $250,000 from revenue received by DWD for interest, penalties, and fees for unemployment insurance purposes to be used to pay for employment service expenses that were disallowed as federally aided costs.

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:

AB553, s. 1 Section 1. 20.445 (1) (gh) (title) of the statutes is amended to read:

AB553,9,3 20.445 (1) (gh) (title) Unemployment tax and accounting system information technology systems; assessments.

AB553, s. 2 Section 2. 20.445 (1) (nb) (title) of the statutes is amended to read:

AB553,9,6 20.445 (1) (nb) (title) Unemployment tax and accounting system information technology systems; federal moneys.

AB553, s. 3 Section 3. 49.45 (10) of the statutes is amended to read:

AB553,9,11 49.45 (10) Rule-making powers and duties. The department is authorized to promulgate such rules as are consistent with its duties in administering medical assistance. The department shall promulgate a rule defining the term "part-time intermittent care" for the purpose of s. 49.46.

AB553, s. 4 Section 4. 108.02 (10m) of the statutes is amended to read:

AB553,9,16 108.02 (10m) Educational service agency. "Educational service agency" means a governmental entity or Indian tribal unit which is established and operated exclusively for the purpose of providing services to one or more educational institutions.

AB553, s. 5 Section 5. 108.02 (12m) (intro.) of the statutes is renumbered 108.02 (24m) (intro.) and amended to read:

AB553,10,8 108.02 (24m) Employee service Temporary help company. (intro.) "Employee service "Temporary help company" means a leasing company or temporary help service an entity which contracts with clients or customers a client to supply individuals to perform services for the client or customer on a temporary basis to support or supplement the workforce of the client in situations such as personnel absences, temporary personnel shortages, and workload changes resulting from seasonal demands or special assignments or projects, and which, both under contract and in fact:

AB553, s. 6 Section 6. 108.02 (12m) (a) and (b) of the statutes are renumbered 108.02 (24m) (a) and (b) and amended to read:

AB553,10,12 108.02 (24m) (a) Negotiates with clients or customers for such matters as time, place, type of work, working conditions, quality, and price of the services;

AB553,10,14 (b) Determines assignments or reassignments of individuals to its clients or customers, even if the individuals retain the right to refuse specific assignments;

AB553, s. 7 Section 7. 108.02 (12m) (c) and (d) of the statutes are renumbered 108.02 (24m) (c) and (d).

AB553, s. 8 Section 8. 108.02 (12m) (e) of the statutes is renumbered 108.02 (24m) (e) and amended to read:

AB553,10,20 108.02 (24m) (e) Hires and terminates individuals who perform services for the clients or customers.

AB553, s. 9 Section 9. 108.02 (13) (a) of the statutes is amended to read:

AB553,11,9 108.02 (13) (a) "Employer" means every government unit and Indian tribe, and any person, association, corporation, whether domestic or foreign, or legal representative, debtor in possession or trustee in bankruptcy or receiver or trustee of a person, partnership, association, or corporation, or guardian of the estate of a person, or legal representative of a deceased person, any partnership or partnerships consisting of the same partners, except as provided in par. (L), any limited liability company or limited liability companies consisting of the same members, except as provided in par. (kL), and any fraternal benefit society as defined in s. 614.01 (1) (a), which is subject to this chapter under the statutes of 1975, or which has had employment in this state and becomes subject to this chapter under this subsection and, notwithstanding any other provisions of this section, any service insurance corporation organized or operating under ch. 613, except as provided in s. 108.152 (6) (a) 3.

AB553, s. 10 Section 10. 108.02 (15) (f) (intro.) of the statutes is amended to read:

AB553,11,13 108.02 (15) (f) (intro.) "Employment" as applied to work for a government unit or Indian tribe, except as such unit or tribe duly elects otherwise with the department's approval, does not include service:

AB553, s. 11 Section 11. 108.02 (15) (g) (intro.) of the statutes is amended to read:

AB553,11,18 108.02 (15) (g) (intro.) "Employment" as applied to work for a government unit, an Indian tribe, or a nonprofit organization, except as such unit , tribe, or organization duly elects otherwise with the department's approval, does not include service:

AB553, s. 12 Section 12. 108.02 (15) (gm) of the statutes is created to read:

AB553,11,22 108.02 (15) (gm) "Employment," as applied to work for an Indian tribe, does not include service performed after the department terminates application of this chapter to the tribe under s. 108.152 (6) (a) 3.

AB553, s. 13 Section 13. 108.02 (15) (j) 4. and 5. of the statutes are amended to read:

AB553,11,24 108.02 (15) (j) 4. In the employ of a hospital by a patient of such hospital; or

AB553,12,4 5. In any quarter in the employ of any organization exempt from federal income tax under section 501 (a) of the internal revenue code, other than an organization described in section 401 (a) or 501 (c) (3) of such code, or under section 521 of the internal revenue code, if the remuneration for such service is less than $50.; or

AB553, s. 14 Section 14. 108.02 (15) (j) 6. of the statutes is created to read:

AB553,12,12 108.02 (15) (j) 6. By a nonresident alien for the period that he or she is temporarily present in the United States as a nonimmigrant under 8 USC 1101 (a) (15) (F), (J), (M), or (Q), if the service is performed to carry out the purpose for which the alien is admitted to the United States, as provided in 8 USC 1101 (a) (15) (F), (J), (M), or (Q), or by the spouse or minor child of such an alien if the spouse or child was also admitted to the United States under 8 USC 1101 (a) (15) (F), (J), (M), or (Q) for the same purpose.

AB553, s. 15 Section 15. 108.02 (15) (k) 18. c. of the statutes is amended to read:

AB553,12,16 108.02 (15) (k) 18. c. The amount of the lease payment is not contingent upon the income generated through the use of the motor vehicle or equipment during the lease term; or

AB553, s. 16 Section 16. 108.02 (15) (k) 19. b. of the statutes is amended to read:

AB553,12,22 108.02 (15) (k) 19. b. The individual has been paid or is treated as having been paid wages or other remuneration of $500 or more during his or her base period for services performed for at least one employer other than the seasonal employer which is subject to the unemployment insurance law of any state or the federal government.; or

AB553, s. 17 Section 17. 108.02 (15) (k) 20. of the statutes is created to read:

AB553,12,25 108.02 (15) (k) 20. Provided to a recipient of medical assistance under ch. 49 by an individual who is not an employee of a home health agency, if the service is:

AB553,13,5 a. Private duty nursing service or part-time intermittent care authorized under s. 49.46 (2) (b) 6. g., for which medical assistance reimbursement is available as a covered service, provided by an individual who is certified by the department of health and family services under s. 49.45 (2) (a) 11. as a nurse in independent practice or as an independent nurse practitioner; or

AB553,13,10 b. Respiratory care service for ventilator-dependent individuals authorized under s. 49.46 (2) (b) 6m., for which medical assistance reimbursement is available as a covered service, provided by an individual who is certified by the department of health and family services under s. 49.45 (2) (a) 11. as a provider of respiratory care services in independent practice.

AB553, s. 18 Section 18. 108.02 (15) (n) of the statutes is amended to read:

AB553,13,17 108.02 (15) (n) If any employment for a government unit, Indian tribe, or nonprofit organization excluded under other paragraphs of this subsection is required by the federal unemployment tax act, the social security act, or any other federal law, to be employment covered by this chapter as a condition for approval of this chapter for full tax credit against the tax imposed by the federal unemployment tax act, such exclusion shall not apply under this chapter.

AB553, s. 19 Section 19. 108.02 (17m) of the statutes is created to read:

AB553,13,21 108.02 (17m) "Indian tribe" has the meaning given in 25 USC 450b (e), and includes any subdivision, subsidiary, or business enterprise that is wholly owned by such an entity.

AB553, s. 20 Section 20. 108.02 (20g) of the statutes is created to read:

AB553,14,2 108.02 (20g) Part-time intermittent care. "Part-time intermittent care", as defined by the department of health and family services under s. 49.45 (10), means skilled nursing service that is provided in the home of a recipient of medical assistance under ch. 49 under a written plan of care that specifies the medical necessity of the care.

AB553, s. 21 Section 21. 108.02 (21c) of the statutes is created to read: