SB649: Bill Text

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.

Recovery of UI liabilities by offset and setoff

Currently, if benefits are erroneously paid to an individual, the issue may be adjudicated administratively, subject to appeal through the court system. DWD may then collect the amount of the overpayment set forth in an administrative decision by deducting that amount from benefits otherwise payable to the individual. DWD may also levy against the available assets of any individual or employer who is determined to be liable to DWD for UI purposes. Currently, with certain exceptions, moneys withdrawn from the unemployment reserve fund may only be used for the payment of benefits.

This bill permits DWD to utilize procedures available under state and federal revenue laws to set off adjudicated UI liabilities against refunds or other payments that may be payable to a liable individual under state law or to offset adjudicated UI liabilities for fraudulent practices against refunds that may be payable to a liable individual under federal tax laws. The bill also permits DWD to pay the administrative expenses of the federal offsets from the unemployment reserve fund. The change initially applies to satisfaction of liabilities outstanding on the day the bill becomes law.

Exclusion of certain tribal employment from coverage

Currently, federal and state law generally provide for UI coverage in employment by Indian tribes. Federal law does not mandate coverage for any of the following types of positions with an Indian tribe: a) members of a legislative body; b) major nontenured policymaking or advisory positions; c) certain part-time policymaking or advisory positions; or d) certain work relief or work training positions.

This bill excludes employment in these positions from coverage under the state UI law unless an employer elects otherwise with DWD's approval. Under the bill, a position as a member of a legislative body is excluded only if the position is elective. Noncoverage means that an employee may not claim benefits based upon this type of employment and the employee's employer is not liable to pay for those benefits.

Penalty for acts of concealment

Current law provides that a claimant who conceals any material fact relating to his or her benefit eligibility or who conceals any of his or her wages earned in or paid or payable for a given week must forfeit a specified amount. The penalty increases for subsequent offenses within a specified period. A claimant who conceals wages is also denied benefits for the week in which wages are concealed.

This bill deletes additional language providing that any claimant who commits an act of concealment is disqualified from receiving benefits for an unspecified period.

Appeals of LIRC decisions

Current law provides that when an employer wishes to appeal a UI decision made by the Labor and Industry Review Commission (LIRC) to circuit court, LIRC and the adverse party must be named as defendants.

This bill clarifies that in addition to any other parties to any particular appeal DWD is always an adverse party for purposes of UI appeals brought by employers to address issues other than benefit claims and DWD must be named as a defendant. This permits DWD to have notice of the appeal and to participate in the court proceedings and avoids any potential dismissal of an employer's appeal for failure to name DWD as a defendant.

Qualification of professional employer organizations

Currently, an employer may transfer its obligations to pay UI contributions or reimbursements to a professional employer organization that meets certain conditions specified by law. Professional employer organizations are separately required to register with the Department of Regulation and Licensing (DRL), pay an annual registration fee, and meet certain financial responsibility requirements.

This bill provides that a professional employer organization does not qualify as such for UI purposes unless it is currently registered with DRL.

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:

SB649, s. 1 Section 1. 108.02 (12) (a) of the statutes is amended to read:

SB649,8,4 108.02 (12) (a) "Employee" means any individual who is or has been performing services for pay for an employing unit, whether or not the individual is paid directly by the employing unit, except as provided in par. (b), (bm), (c), (d), (dm) or (dn).

SB649, s. 2 Section 2. 108.02 (12) (b) of the statutes is repealed.

SB649, s. 3 Section 3. 108.02 (12) (bm) (intro.) of the statutes is amended to read:

SB649,9,3 108.02 (12) (bm) (intro.) During the period beginning on January 1, 2000, with respect to contribution requirements, and during the period beginning on April 2, 2000, with respect to benefit eligibility, par. Paragraph (a) does not apply to an individual performing services for an employing unit other than a government unit or nonprofit organization in a capacity other than as a logger or trucker, if the employing unit satisfies the department that the individual meets 7 or more of the following conditions specified in subds. 1. and 2., by contract and in fact:

SB649, s. 4 Section 4. 108.02 (12) (bm) 1. and 2. of the statutes are repealed and recreated to read:

SB649,9,9 108.02 (12) (bm) 1. The services of the individual are performed free from control or direction by the employing unit over the performance of his or her services. In determining whether services of an individual are performed free from control or direction, the department may consider the following nonexclusive factors:

SB649,9,11 a. Whether the individual is required to comply with instructions concerning how to perform the services.

SB649,9,13 b. Whether the individual receives training from the employing unit with respect to the services performed.

SB649,9,14 c. Whether the individual is required to personally perform the services.

SB649,9,16 d. Whether the services of the individual are required to be performed at times or in a particular order or sequence established by the employing unit.

SB649,9,18 e. Whether the individual is required to make oral or written reports to the employing unit on a regular basis.

SB649,9,19 2. The individual meets 6 or more of the following conditions:

SB649,9,21 a. The individual advertises or otherwise affirmatively holds himself or herself out as being in business.

SB649, s. 5 Section 5. 108.02 (12) (bm) 3. and 4. of the statutes are renumbered 108.02 (12) (bm) 2. b. and c. and amended to read:

SB649,9,25 108.02 (12) (bm) 2. b. The individual maintains a separate business with his or her own office, or performs most of the services in a facility or location chosen by the individual and uses his or her own equipment, or materials and other facilities in performing the services.

SB649,10,5 c. The individual operates under multiple contracts with one or more employing units to perform specific services for specific amounts of money and under which the individual controls the means and methods of performing such services.

SB649, s. 6 Section 6. 108.02 (12) (bm) 5. of the statutes is renumbered 108.02 (12) (bm) 2. d.

SB649, s. 7 Section 7. 108.02 (12) (bm) 6. and 7. of the statutes are renumbered 108.02 (12) (bm) 2. e. and f. and amended to read:

SB649,10,13 108.02 (12) (bm) 2. e. The individual is responsible for the satisfactory completion of the services that he or she contracts to perform and is liable for a failure to satisfactorily complete the services obligated to redo unsatisfactory work for no additional compensation or is subject to a monetary penalty for unsatisfactory work.

SB649,10,17 f. The services performed by the individual receives compensation for services performed under a contract on a commission or per-job or competitive-bid basis and not on any other basis do not directly relate to the employing unit retaining the services.

SB649, s. 8 Section 8. 108.02 (12) (bm) 8. and 9. of the statutes are renumbered 108.02 (12) (bm) 2. g. and h.

SB649, s. 9 Section 9. 108.02 (12) (bm) 10. of the statutes is renumbered 108.02 (12) (bm) 2. i. and amended to read:

SB649,10,25 108.02 (12) (bm) 2. i. The success or failure of the individual's business depends on the relationship of business receipts to expenditures individual is not economically dependent upon a particular employing unit with respect to the services being performed.

SB649, s. 10 Section 10. 108.02 (15) (f) 3. of the statutes is amended to read:

SB649,11,4 108.02 (15) (f) 3. As a member of a legislative body or the judiciary of a state or political subdivision, or as a member of an elective legislative body or the judiciary of an Indian tribe;

SB649, s. 11 Section 11. 108.02 (15) (f) 6. of the statutes is amended to read:

SB649,11,9 108.02 (15) (f) 6. In a position which, under or pursuant to the laws of this state, or of an Indian tribe, is designated as a major nontenured policymaking or advisory position, or is designated as a policymaking or advisory position the performance of the duties of which does not ordinarily require more than 8 hours per week.

SB649, s. 12 Section 12. 108.02 (15) (g) 1. of the statutes is amended to read:

SB649,11,15 108.02 (15) (g) 1. By an individual receiving work relief or work training as part of an unemployment work-relief or work-training program assisted or financed in whole or in part by any federal agency or by an agency of a state or political subdivision thereof or by an Indian tribe, unless otherwise required as a condition for participation by the unit or organization in such program;

SB649, s. 13 Section 13. 108.02 (15) (km) of the statutes is created to read:

SB649,11,19 108.02 (15) (km) "Employment", as applied to work for a given employer other than a government unit or a nonprofit organization, except as the employer elects otherwise with the department's approval, does not include service:

SB649,11,25 1. Provided by an individual to an ill or disabled family member who is the employing unit for such service, if the service is personal care or companionship. For purposes of this subdivision, "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. In this subdivision, "domestic partner" has the meaning given in s. 770.01 (1).

SB649, s. 14 Section 14. 108.02 (15s) of the statutes is created to read:

SB649,12,3 108.02 (15s) Full-time work. "Full-time work" means work performed for 32 or more hours per week.

SB649, s. 15 Section 15. 108.02 (20m) of the statutes is created to read:

SB649,12,6 108.02 (20m) Part-time work. "Part-time work" means work performed for less than 32 hours per week.

SB649, s. 16 Section 16. 108.02 (21e) (intro.) of the statutes is amended to read:

SB649,12,15 108.02 (21e) Professional employer organization. (intro.) "Professional employer organization" means any person who is currently registered as a professional employer organization with the department of regulation and licensing in accordance with ch. 461, who contracts to provide the nontemporary, ongoing employee workforce of more than one client under a written leasing contract, the majority of whose clients are not under the same ownership, management, or control as the person other than through the terms of the contract, and who under contract and in fact:

SB649, s. 17 Section 17. 108.04 (1) (g) (intro.) of the statutes is amended to read:

SB649,12,20 108.04 (1) (g) (intro.) Except as provided in par. (gm) and s. 108.06 (7) (d), the base period wages utilized to compute total benefits payable to an individual under s. 108.06 (1) as a result of the following employment shall not exceed 10 times the individual's weekly benefit rate based solely on that employment under s. 108.05 (1):

SB649, s. 18 Section 18. 108.04 (2) (a) (intro.) of the statutes is amended to read:

SB649,12,24 108.04 (2) (a) (intro.) Except as provided in par. (b) and sub. (16) (am) and (b) and as otherwise expressly provided, a claimant is eligible for benefits as to any given week for which he or she earns no wages only if:

SB649, s. 19 Section 19. 108.04 (2) (d) of the statutes is repealed.

SB649, s. 20 Section 20. 108.04 (7) (k) of the statutes is amended to read:

SB649,13,6 108.04 (7) (k) Paragraph (a) does not apply to an employee who terminates his or her part-time work consisting of not more than 30 hours per week 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.

SB649, s. 21 Section 21. 108.04 (7) (o) of the statutes is amended to read:

SB649,13,12 108.04 (7) (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 consists of more than 30 hours per week is full-time work, 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 is full-time work.

SB649, s. 22 Section 22. 108.04 (11) (be) (intro.) of the statutes is amended to read:

SB649,13,16 108.04 (11) (be) (intro.) A claimant shall forfeit benefits and be disqualified from receiving benefits for acts of concealment described in pars. (a) and (b) as follows:

SB649, s. 23 Section 23. 108.04 (16) (a) of the statutes is repealed and recreated to read:

SB649,13,18 108.04 (16) (a) In this subsection, "approved training" means:

SB649,13,20 1. A course of vocational training or basic education which is a prerequisite to such training in which an individual is enrolled if:

SB649,13,22 a. The course is expected to increase the individual's opportunities to obtain employment;