LRB-4586/1
JTK:cjs:rs
2009 - 2010 LEGISLATURE
March 26, 2010 - Introduced by Senator Coggs, cosponsored by Representative
Sinicki, by request of Department of Workforce Development. Referred to
Committee on Labor, Elections and Urban Affairs.
SB649,2,4 1An Act to repeal 108.02 (12) (b), 108.04 (2) (d), 108.04 (16) (c), 108.05 (7) (d) 2.
2b., 108.06 (7) (b) 5., 108.152 (1) (c) and 108.152 (3); to renumber 108.02 (12)
3(bm) 5. and 108.02 (12) (bm) 8. and 9.; to renumber and amend 108.02 (12)
4(bm) 3. and 4., 108.02 (12) (bm) 6. and 7., 108.02 (12) (bm) 10., 108.05 (7) (d) 1.
5b., 108.22 (8) (b) 1. and 108.24 (3); to consolidate, renumber and amend
6108.05 (7) (d) 1. (intro.) and a. and 108.05 (7) (d) 2. (intro.) and a.; to amend
7108.02 (12) (a), 108.02 (12) (bm) (intro.), 108.02 (15) (f) 3., 108.02 (15) (f) 6.,
8108.02 (15) (g) 1., 108.02 (21e) (intro.), 108.04 (1) (g) (intro.), 108.04 (2) (a)
9(intro.), 108.04 (7) (k), 108.04 (7) (o), 108.04 (11) (be) (intro.), 108.04 (16) (b),
10108.04 (16) (d), 108.04 (16) (e), 108.05 (3) (b) 1. a., b. and c., 108.06 (7) (a) 2. and
11(b) 4., 108.06 (7) (d), 108.06 (7) (h) and (j), 108.09 (2) (bm), 108.09 (4s), 108.10
12(4), 108.152 (6) (title), 108.152 (6) (a) (intro.), 108.152 (6) (a) 2., 108.16 (10),
13108.18 (7) (a), 108.18 (7) (b), 108.18 (7) (d), 108.18 (7) (h), 108.19 (1m) and 108.20
14(3); to repeal and recreate 108.02 (12) (bm) 1. and 2. and 108.04 (16) (a); and

1to create 108.02 (15) (km), 108.02 (15s), 108.02 (20m), 108.04 (16) (am), 108.04
2(16) (f), 108.05 (3) (e), 108.16 (6) (L) and (m), 108.16 (6m) (g), 108.18 (7) (i),
3108.22 (8) (b) 1. c. and d. and 108.24 (3) (a) 4. of the statutes; relating to:
4various changes in the unemployment insurance law and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill makes various changes in the unemployment insurance (UI) law.
Significant provisions include:
Benefit changes
Approved training and extended training
Currently, benefits may not be denied to an otherwise eligible claimant because
the claimant is enrolled in a vocational training course or a basic education course
that is a prerequisite to such training ("approved training") under certain conditions.
Current law also permits a claimant who has exhausted all rights to benefits and is
enrolled in an approved training course that meets certain qualifications to
potentially qualify to receive up to 26 weeks of additional benefits while enrolled in
that training ("extended training"). This bill makes several changes to the provisions
governing approved training and extended training. The bill:
1. Provides that a claimant is not subject to certain disqualifications or
requalifying requirements that otherwise apply to claimants who leave or refuse
certain work after leaving certain temporary work, or after leaving on-the-job
training that fails to meet certain federal requirements within 30 days after
beginning that training.
2. Prohibits benefit reductions or disqualifications because a claimant is
enrolled in certain federally funded training.
3. Broadens the types of training that may be considered approved training
(thus precluding benefit denial or reduction during enrollment) to include certain
recently created programs administered by the Department of Workforce
Development (DWD) and certain training under the federal Workforce Investment
Act.
4. Provides that benefits for all claimants who are enrolled in approved training
(rather than only certain benefits as currently provided) are not charged to the
accounts of individual employers (thus potentially affecting employer contribution
(tax) rates) but are instead charged to the unemployment reserve fund's balancing
account (a pooled account funded by all employers who pay contributions to the
fund).
5. Eliminates a distinction between claimants who are totally unemployed and
claimants who are partially unemployed in applying certain general qualifying
requirements, one effect of which is to require DWD to determine whether a claimant
is enrolled in approved training before determining whether a claimant meets

certain other requirements to receive benefits, thereby enabling more prompt
payment of benefits to enrollees.
6. Eliminates a requirement that a claimant must be separated from
employment in a declining occupation or involuntarily separated as a result of a
permanent reduction in the operations of his or her employer in order to receive
extended training benefits.
Disqualification for full-time work
Currently, if a claimant receives wages or certain other amounts treated as
wages from an employer who paid at least 80 percent of the claimant's wages in his
or her base period (period preceding a claim during which benefit rights accrue) for
any week, the claimant is not eligible to receive benefits for that week if the claimant
works for at least 35 hours for that employer in that week and receives pay at not less
than the rate of pay that the claimant received during the calendar quarter in his or
her base period in which the claimant received his or her highest wages, or the
claimant receives certain other payments from that employer for that week that
alone or in combination with any paid wages equal at least the pay the claimant
would have received for 35 hours of work.
This bill provides that a claimant is subject to this disqualifier for any week if
the claimant receives wages or certain other amounts treated as wages from such an
employer for full-time work for that week. The bill defines "full-time work" as work
performed for 32 or more hours per week.
Employee status
Currently, in order to be eligible to claim benefits, an individual must, in
addition to other requirements, be an "employee" as defined in the UI law. Generally,
an "employee" is an individual who performs services for an employer in employment
covered by the UI law, whether or not the individual is paid directly by the employer.
However, an individual is not an "employee" 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 meet at least seven of ten
conditions by contract and in fact concerning the individual's relationship to or
direction or control over his or her business or the services that he or she performs.
The bill changes the test for determining employee status, other than for
loggers or truckers as noted above and for individuals performing services for
governmental or nonprofit employers, so that, instead of meeting at least seven of ten
specified conditions by contract and in fact, an excluded individual must, by contract
and in fact, perform services free from control or direction and must meet at least six
of nine specified conditions. Some of the conditions specified in the bill are the same
as those currently provided while others are changed from those currently provided.
Voluntary termination of work
Currently, if an employee voluntarily terminates his or her work with an
employer, the employee is generally ineligible to receive benefits until four weeks
have elapsed since the end of the week in which the termination occurs and the
employee earns wages after the week in which the termination occurs equal to at
least four times the employee's weekly benefit rate in employment covered by the

unemployment insurance law of any state or the federal government. However, an
employee may terminate his or her work and receive benefits without requalifying
under this provision if the employee terminates his or her work with good cause
attributable to his or her employer. In addition, an employee may voluntarily
terminate his or her work and receive benefits without requalifying under this
provision if: a) the work is part-time work consisting of not more than 30 hours per
week and the employee is otherwise eligible to receive benefits because of the loss of
the employee's full-time work and the loss of the full-time work makes it
economically unfeasible to continue his or her part-time work; or b) the employee
terminates his or her work in one of two or more concurrently held positions at least
one of which consists of more than 30 hours per week, if the employee terminates his
or her work before receiving notice of termination from a position which consists of
more than 30 hours per week.
This bill changes the above exceptions so that an employee may receive benefits
without requalifying if, under a), the work from which the employee terminates is
part-time work; or, under b), the employee terminates work in one position and the
termination occurs prior to receiving notice of termination from another position that
is full-time work. The bill defines "full-time work" as work consisting of 32 or more
hours per week and "part-time work" as work consisting of less than 32 hours per
week.
Benefit reductions due to certain pension payments
Currently, with certain exceptions and limitations, if a claimant receives a
pension, retirement, annuity, or other similar payment based on the previous work
of the claimant for a given week, DWD must reduce the claimant's UI benefits
otherwise payable for that week, but not below zero, by an amount equal to not more
than the amount of the payment received for that week. With certain exceptions, if
a payment is actually or constructively received on other than a periodic basis, DWD
allocates the payment to specific weeks for purposes of the required reduction using
the claimant's most recent full weekly wage rate or another reasonable basis. The
actual amount of the reduction depends upon the facts of the particular situation.
This bill provides that when a claimant actually or constructively receives a
pension, retirement, annuity, or similar payment based on the previous work of the
claimant on other than a periodic basis, DWD must allocate the entire payment to
the week in which it is received if DWD provides due notice of the proposed allocation
to the claimant before the allocation is made. In most cases, the change reduces the
amount of the reduction currently required.
Treatment of bonus and profit-sharing payments
Currently, with certain exceptions, if a claimant earns wages in a given week
in employment covered by the UI law, the first $30 of the wages are disregarded and
the claimant's weekly benefit payment is reduced by 67 percent of the remaining
amount of wages earned. Whether a bonus or profit-sharing payment is earned in
the same week in which it is paid depends upon the particular facts of a given
situation.
This bill provides that for purposes of benefits to which a claimant may be
entitled for partial unemployment, a bonus or profit-sharing payment is always

considered to be earned in the week in which the bonus or payment is paid by the
claimant's employer.
Tax changes
Voluntary contributions after catastrophic loss
Currently, with certain exceptions and limitations, an employer may make
voluntary contribution (tax) payments in any year that may, in some cases, result in
a lower contribution rate than would otherwise have applied to the employer in the
succeeding year. However, no employer may, by means of a voluntary contribution,
reduce the employer's contribution rate to a rate more than one rate lower than the
rate that would have applied to the employer in the applicable statutory rate
schedule had the voluntary contribution not been made. This bill provides that,
notwithstanding this limitation, an employer that suffers physical damage to its
business caused by a catastrophic event for which the employer was not primarily
responsible, and incurs benefit charges to its UI account for layoffs due to that
damage may, by means of a voluntary contribution, increase the employer's reserve
percentage (net reserve of the employer's account, stated as a percentage of the
employer's taxable payroll, that is used to compute the employer's contribution rate)
to no greater than the reserve percentage that would have applied to the employer
had the damage not caused the employer to lay off its employees.
Deadline for making voluntary contributions
Currently, an employer may pay contributions (taxes) before they become due.
If an employer makes a voluntary contribution by November 30 of any year, it is
credited to the employer's account as of June 30 of that year and it may therefore
have the effect of lowering the employer's contribution rate for the succeeding year.
Currently, a voluntary contribution is timely if it is received by DWD no later than
its due date or, if mailed, is either postmarked by that date or is received by DWD
no later than three days after that date.
This bill provides that to be considered timely, a voluntary contribution must
be received by DWD no later than its due date.
Other changes
Coverage of personal care services performed for family members
Currently, individuals providing personal care or companionship services to ill
or disabled individuals are generally covered under the UI law. This bill eliminates
coverage for personal care or companionship services performed by an individual for
an ill or disabled family member of the individual who directly employs the
individual providing the services. Under the bill, "family member" means a spouse,
parent, child, grandparent, or grandchild of an individual, by blood or adoption, or
an individual's step parent, step child, or domestic partner. Under the bill, a
claimant is no longer eligible to claim benefits based upon the performance of these
services and an individual who employs a family member to perform these services
is no longer subject to a state contribution requirement (requirement to pay state
taxes) based upon the performance of these services.

Use of surplus assessment revenues
Currently, when this state obtains a loan from the federal government to
maintain the solvency of the unemployment reserve fund, from which benefits are
paid, most employers must pay an assessment to cover the cost of any interest
payments due on the loan. If the amounts collected from the assessment are more
than is needed to pay the interest due, the amounts are retained in the
administrative account of the fund, and may be used for a variety of purposes,
including administration of the UI program, research relating to the condition of the
fund, and the payment of certain benefits.
This bill provides instead that excess revenues shall be credited to the
balancing account of the fund, which is used to pay benefits that are not chargeable
to any employer's account. The effect is to enhance the balance of the fund, which
decreases the need for future borrowing and assessments to maintain the fund's
solvency.
Assurance requirement for Indian tribes
Currently, Indian tribes and tribal units are covered employers for UI purposes
and their employees are potentially eligible to receive UI benefits. If an employee
of an Indian tribe or tribal unit files a valid benefit claim, the cost of the benefits is
charged to the claimant's employer. In most cases, employers must pay contributions
(taxes) to the unemployment insurance fund to finance the cost of benefit payments.
These contributions are payable regardless of whether benefits are charged to an
employer's account. However, governmental and nonprofit employers and Indian
tribes are permitted to reimburse the fund for the cost of benefits charged to their
accounts after a claimant claims benefits. Currently, if an Indian tribe elects to
finance its benefits on a reimbursement basis, it must provide to DWD assurance of
reimbursement such as a surety bond in an amount specified by law. This bill
eliminates the requirement to provide assurance of reimbursement. If benefit costs
for a claimant are not reimbursed, payments to the claimant are not immediately
affected. The cost of benefits is charged to the fund's balancing account or an account
into which UI interest and penalty revenues are credited. If a delinquency is not
resolved, an Indian tribe's authorization to use reimbursement financing is
terminated and DWD may terminate the tribe's coverage under the UI law.
Unlawful discrimination and retaliation
Currently, it is unlawful for any person to: a) make a deduction from the wages
of an employee to finance an employer's actual or potential UI costs; b) knowingly fail
to furnish to an employee any required UI information; c) attempt to induce an
employee not to claim UI benefits or to waive any other right under the UI law; or
d) maintain a rehiring policy that discriminates against employees who claim
benefits. Violators are guilty of a misdemeanor and are subject to a fine of not less
than $100 nor more than $500 or imprisoned for not more than 90 days or both for
each occurrence.
This bill also makes it unlawful to: a) attempt to induce an employee not to
claim benefits or waive any right under the UI law by threatening to terminate the
employee; b) attempt to induce an employee from participating in a UI audit or
investigation, or testifying in a UI hearing, or c) discriminate against an individual

because of the individual's participation in a UI audit or investigation, or testifying
in a UI hearing or exercising any other right under the UI law. The bill also increases
the maximum fine for all current and proposed offenses to $1,000 for each occurrence.
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