SB200: Bill Text

LRB-1975/2

JTK&MED:cjs:rs

2013 - 2014 LEGISLATURE

2013 Senate BILL 200

May 24, 2013 - Introduced by Senator Lasee, cosponsored by Representative Knodl. Referred to Committee on Workforce Development, Forestry, Mining, and Revenue.

SB200,3,14 An Act to repeal 108.02 (4m) (g), 108.02 (13) (kL), 108.04 (1) (i), 108.05 (1) (n) to (p), 108.06 (7) and 108.07 (8); to renumber 50.498 (4) and 108.02 (10e) (a) and (b); to renumber and amend 108.02 (10e) (intro.) and 440.12; to consolidate, renumber and amend 16.48 (1) (intro.) and (a) (intro.); to amend 13.63 (1) (b), 13.63 (1) (c), 16.48 (1) (b), 16.48 (3), 19.55 (2) (d), 29.024 (2r) (title), 29.024 (2r) (c), 29.024 (2r) (d) 1., 48.66 (2m) (c), 48.715 (7), 50.498 (title), 50.498 (2), 50.498 (5), 51.032 (title), 51.032 (2), 51.032 (4), 51.032 (5), 71.78 (4) (o), 73.0301 (2) (c) 2., 73.0302 (title), 73.09 (6m), 101.02 (20) (b), 101.02 (20) (c), 101.02 (20) (d), 102.17 (1) (c), 103.005 (10), 103.275 (2) (b) (intro.), 103.275 (7) (b), 103.275 (7) (c), 103.34 (3) (c), 103.34 (10) (title), 103.92 (3), 104.07 (1) and (2), 105.13 (1), 108.02 (4m) (a), 108.02 (13) (a), 108.04 (1) (f), 108.04 (1) (g) (intro.), 108.04 (1) (hm), 108.04 (2) (a) 3. c., 108.04 (8) (a) and (c), 108.05 (1) (q) (intro.), 108.05 (2) (c), 108.05 (3) (a), 108.06 (1), 108.06 (2) (c), 108.06 (2) (cm), 108.06 (3), 108.06 (6) (intro.), 108.10 (intro.), 108.14 (8n) (e), 108.14 (19), 108.141 (7) (a), 108.16 (2) (g) and (h), 108.16 (6m) (a), 108.16 (8) (b) 4., 108.205 (1), 108.21 (1), 108.22 (1) (a), 108.22 (8) (c) 1. a., 108.225 (1) (b), 115.31 (6m), 118.19 (1m) (a), 118.19 (1m) (b), 138.09 (1m) (b) 2. a., 138.09 (3) (am) 2., 138.09 (4) (c), 138.12 (3) (d) 2. a., 138.12 (5) (am) 1. b., 138.12 (5) (am) 3., 138.14 (4) (a) 2. a., 138.14 (9) (d), 146.40 (4d) (b), 146.40 (4d) (d), 146.40 (4d) (e), 169.35 (title), 169.35 (2), 169.35 (3), 170.12 (3m) (b) 1., 217.05 (1m) (b) 1., 217.09 (4), 217.09 (6), 218.0114 (21e) (a), 218.0114 (21g) (b) 1., 218.0116 (1g) (b), 218.02 (2) (a) 2. a., 218.04 (3) (a) 2. a., 218.04 (5) (b), 218.05 (3) (am) 2. a., 218.05 (12) (b), 218.05 (12) (e), 218.11 (2) (am) 3., 218.12 (2) (am) 2., 218.21 (2m) (b), 218.31 (1m) (b), 218.41 (2) (am) 2., 218.51 (3) (am) 2., 224.72 (2) (c) 2. a., 224.725 (2) (b) 1. a., 224.927 (1), 227.53 (1) (a) 3., 252.241 (title), 252.241 (2), 254.115 (title), 254.115 (2), 254.176 (5), 254.20 (7), 256.18 (title), 256.18 (2), 256.18 (5), 299.07 (title), 299.07 (1) (b) 1., 299.08 (1) (b) 2., 341.51 (4g) (b), 342.06 (1) (eg), 343.14 (1), 343.14 (2j), 343.305 (6) (e) 3. b., 343.61 (2) (b), 343.62 (2) (b), 343.69 (1), 440.03 (11m) (c), 452.18, 551.412 (4g) (a) 1., 551.605 (2), 562.05 (8m) (a), 562.05 (8m) (b), 563.285 (title), 563.285 (2) (a), 563.285 (2) (b), 628.095 (4) (b), 628.097 (title), 628.097 (2m), 628.10 (2) (cm), 632.69 (2) (c), 632.69 (2) (d) 2., 632.69 (4) (d), 633.14 (2c) (b), 633.14 (2m) (b), 633.15 (2) (d), 751.155 (title), 751.155 (1), 751.155 (2) and 751.155 (3); to repeal and recreate 108.05 (1) (q) (intro.), 108.05 (1) (r) (intro.) and 108.05 (3) (a); and to create 20.445 (1) (gm), 50.498 (4) (b), 73.0302 (5), 73.0302 (6), 73.09 (8), 102.17 (1) (ct), 103.275 (2) (bt), 103.34 (10) (d), 103.91 (4) (d), 103.92 (8), 104.07 (7), 105.13 (4), 108.02 (10e) (bm), 108.02 (15) (kt), 108.04 (2) (a) 4., 108.04 (2) (g), 108.04 (2) (h), 108.04 (12) (f), 108.04 (15), 108.05 (1) (r), 108.14 (20), 108.14 (21), 108.14 (22), 108.14 (23), 108.14 (24), 108.14 (25), 108.14 (26), 108.16 (3) (c), 108.16 (6) (o), 108.16 (6m) (h), 108.22 (1) (cm), 108.22 (8e), 108.223, 108.227, 108.245, 138.12 (4) (a) 1m., 138.12 (4) (b) 5m., 138.14 (5) (b) 2m., 138.14 (9) (cm), 170.12 (8) (b) 1. bm., 170.12 (8) (b) 4., 217.06 (5m), 217.09 (1t), 218.0116 (1m) (a) 2m., 218.0116 (1m) (d), 218.02 (3) (dm), 218.02 (6) (d), 218.02 (9) (a) 1m., 218.04 (4) (am) 2m., 218.04 (5) (at), 218.05 (4) (c) 2m., 218.05 (11) (bm), 218.05 (12) (at), 218.11 (6m) (c), 218.12 (3m) (c), 218.22 (3m) (c), 218.32 (3m) (c), 218.41 (3m) (b) 3., 218.51 (4m) (b) 3., 224.44, 224.72 (7m) (bm), 224.725 (6) (bm), 224.77 (2m) (e), 224.95 (1) (bm), 252.241 (5), 254.115 (5), 256.18 (4m), 299.07 (3), 341.51 (4m) (c), 343.305 (6) (e) 6., 343.66 (3m), 440.12 (2), 551.406 (6) (a) 1m., 551.412 (4g) (a) 2m., 551.412 (4g) (d), 562.05 (5) (a) 11., 562.05 (8) (f) and 563.285 (1m) of the statutes; relating to: various changes in the unemployment insurance law; license revocations based on delinquency in payment of unemployment insurance contributions; granting rule-making authority; providing a penalty; and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill makes various changes in the unemployment insurance (UI) law. Significant changes include:

Benefit amounts

Currently, weekly UI benefit rates for total unemployment range from $54 for an employee who earns wages (or certain other amounts treated as wages) of at least $1,350 during at least one quarter of the employee's base period (period preceding a claim during which benefit rights accrue) to $363 for an employee who earns wages (or certain other amounts treated as wages) of at least $9,075 during any such quarter. This bill adjusts weekly benefit rates for weeks of unemployment beginning on or after January 5, 2014, to rates ranging from $54 for an employee who earns wages (or certain other amounts treated as wages) of at least $1,350 during at least one quarter of the employee's base period to $370 for an employee who earns wages (or certain other amounts treated as wages) of at least $9,250 during any such quarter. The bill does not affect the benefit rate of any employee who earns wages (or certain other amounts treated as wages) of at least $1,350 during at least one quarter of the employee's base period or any employee who earns wages (or certain other amounts treated as wages) of at least $9,075 during at least one quarter of the employee's base period.

Other benefit changes

Registration and search for work

Currently, with limited exceptions, in order to become and remain eligible to receive UI benefits for any week, a claimant is required, among other things, to register for work and to conduct a reasonable search for suitable work within that week, which must include at least two actions that constitute a reasonable search as prescribed by rule by the Department of Workforce Development (DWD).

This bill requires a claimant, subject to the same exceptions, to provide information or job application materials and to participate in a public employment office workshop or training program or in similar reemployment services that do not require a participation fee, if either is required by DWD for a given week other than the claimant's first week of benefits. The bill allows DWD to use the information or job application materials provided by a claimant to assess the claimant's efforts, skills, and ability to find or obtain work and to develop a list of potential opportunities for a claimant to obtain suitable work. However, the bill provides that a claimant who is subject to the work search requirement need not apply for a specific position on that list in order to satisfy that requirement.

Prohibiting concurrent receipt of UI and SSDI benefits

The bill disqualifies a claimant from receiving UI benefits during any week in which the claimant is actually receiving social security disability insurance (SSDI) benefits and requires a claimant, when the claimant first files for UI benefits and during each subsequent week the claimant files for UI benefits, to inform DWD whether he or she is receiving SSDI benefits.

Failure to accept suitable work or recall to former employer

Currently, with certain exceptions, if an employee fails, without good cause, to accept suitable work when offered or to return to work with a former employer that recalls the employee within 52 weeks after the employee last worked for the employer, the employee is ineligible to receive benefits until four weeks have elapsed since the end of the week in which the failure occurs and the employee earns wages, or certain other amounts treated as wages, 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.

Subject to all of the same exceptions and qualifications, the bill changes the amount of wages an employee must earn to requalify under these provisions to at least six times the employee's weekly benefit rate. The bill eliminates the requirement that, in order to requalify under these provisions, four weeks must have elapsed since the end of the week in which the failure occurs.

Extended training benefits

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. Currently, a claimant may also qualify to receive benefits while participating in an extended training program under certain conditions, under such a program, if a claimant 1) has exhausted all other rights to benefits, 2) is currently enrolled in an approved training program and was so enrolled prior to the end of the claimant's benefit year (period during which benefits are payable) that qualified the claimant for benefits, 3) if not in a current benefit year, has a benefit year that ended no earlier than 52 weeks prior to the week for which the claimant first claims extended training benefits, and 4) is not receiving any similar stipends or other training allowances for nontraining costs, is entitled to extended training benefits of up to 26 times the same benefit rate that applied to the claimant during his or her most recent benefit year if the claimant is being trained for entry into a high-demand occupation. In addition, if the benefit year of such a claimant expires in a week in which extended or other additional federal or state benefits are payable generally, the claimant is also eligible for extended training benefits while enrolled in a training program if the claimant first enrolled in the program within 52 weeks after the end of the claimant's benefit year that qualified the claimant for benefits. This bill deletes extended training benefits.

Treatment of cafeteria plan amounts in benefit calculations

Currently, employers must report wages to DWD and these reports are used to determine the UI benefit eligibility and amounts of benefits payable to UI claimants. The wages reported do not include salary reduction amounts withheld from employees for cafeteria plan benefits (fringe benefits the value of which is excluded from gross income under the federal Internal Revenue Code). However, these amounts are included in the formula that is used to determine the benefit eligibility and amounts payable to claimants. DWD may require employers to report the amounts in their wage reports and employers must maintain records of these amounts.

This bill excludes salary reduction amounts for cafeteria plan benefits in calculating the wages that were paid to a claimant for purposes of determining the claimant's benefit eligibility and amounts. The bill also deletes reporting and record-keeping requirements for these amounts. The effect is to raise the threshold for benefit eligibility and to potentially decrease the amount of benefits that may become payable to certain claimants whose wages include deductions for these amounts.

Failure of claimants to provide requested information

Currently, DWD may require a claimant to answer questions relating to his or her UI benefit eligibility and to provide certain demographic information for auditing purposes. In addition, DWD must require each claimant to provide his or her social security number. A claimant is not eligible to receive benefits for any week in which the claimant fails to comply with a request by DWD for information and for any subsequent week until the claimant provides the requested information or satisfies that DWD that he or she had good cause for failure to provide the information. Generally, if a claimant later complies with a request or satisfies DWD that he or she had good cause for failure to comply, the claimant is eligible to receive benefits beginning with the week in which the failure occurred, if otherwise qualified. With respect to certain specific information, however, if a claimant later provides the requested information but does not have good cause for the initial failure to provide the information, the claimant is eligible only to receive benefits that become payable in the week in which the information is provided. Under this bill, if a claimant later complies with a request, the claimant is eligible to receive benefits beginning with the week in which the failure occurred, regardless of whether the claimant satisfies DWD that he or she had good cause for failure to comply with the request. The change does not apply to a claimant's failure to provide DWD his or her social security number.

Treatment of services performed by prison inmates

Under current law, covered employment under the UI law generally does not include services by inmates of a custodial or penal institution for government units, Indian tribes, or nonprofit organizations. The bill provides that services performed for employers that are not government units, Indian tribes, or nonprofit organizations by inmates of state or federal prisons are also not covered employment under the UI law. As a consequence, wages paid by employers for those services are not subject to UI contribution requirements and those wages are not counted as base period wages for purposes of determining eligibility for UI benefits.

Claimant security credentials

This bill requires each claimant for UI benefits to create security credentials in order to engage in any transactions with DWD, including the filing of an initial or continued claim for benefits. The credentials may consist of a personal identification number, username, and password, or any other means prescribed by DWD. The bill provides that if a claimant's security credentials are used in any transaction with DWD, the individual using the credentials is presumed to be the claimant or the claimant's authorized agent. The presumption may be rebutted by a preponderance of evidence showing that the claimant who created the credentials or the claimant's authorized agent was not the person who used the credentials in a given transaction. The bill provides that if a claimant uses an agent to engage in any transaction with DWD using the claimant's security credentials, the claimant is responsible for the actions of the agent. The bill also provides that if a claimant who creates security credentials or the claimant's authorized agent divulges the credentials to another person, or fails to take adequate measures to protect the credentials from being divulged to an unauthorized person, and DWD pays benefits to an unauthorized person because of the claimant's action or inaction, DWD may recover from the claimant the benefits that were paid to the unauthorized person. In addition, the bill provides that if a claimant who creates security credentials or the claimant's authorized agent divulges the credentials to another person, or fails to take adequate measures to protect the credentials from being divulged to an unauthorized person, DWD is not obligated to pursue recovery of, and is not liable to the claimant for, benefits payable to the claimant that were erroneously paid to another person. Current law contains no similar provisions.

Benefits paid to employees who lose licenses required to perform work

Currently, if an employee is required by law to have a license issued by a governmental agency to perform his or her customary work for an employer, and the employee's employment is suspended or terminated because the license is suspended, revoked, or not renewed due to the employee's fault, the employee is not eligible to receive benefits until five weeks have elapsed since the end of the week in which the suspension or termination occurs or until the license is reinstated or renewed, whichever occurs first. The wages paid by the employer who suspended or terminated the employee are excluded in determining the eligibility of and amount of benefits payable to the employee while the license suspension, revocation, or nonrenewal is in effect. If benefits are paid to an employee using wages that were paid or treated as having been paid during a period when the employee's license was suspended, revoked, or not renewed, the base period wages paid or treated as having been paid by the employer that suspended or terminated the employee are not charged to the employer's account for the period when the license suspension, revocation, or nonrenewal is in effect, but are instead charged to the balancing account of the unemployment reserve fund (pooled account financed by all employers who pay contributions that is used to pay benefits that are not chargeable to any employer's account). This bill provides that if an employee qualifies to receive benefits for any benefit year using base period wages paid or treated as having been paid during a period when wages are excluded from the employee's base period due to a license suspension, revocation, or nonrenewal, DWD must charge the cost of the benefits otherwise chargeable to the employer who suspended or terminated the employee to the balancing account for all weeks in that benefit year.

Tax changes

Interest on delinquent payments

Currently, if an employer does not make a payment required under the UI law to DWD by the due date, the employer must pay interest on the amount owed equal to a variable rate determined by law from the date that the payment became due. Revenues from interest payments are used to administer the UI program. This bill permits DWD to waive or decrease the interest charged to an employer in limited circumstances as prescribed by rule of DWD.

Treatment of limited liability companies consisting of the same members

Currently, for purposes of the UI law, multiple limited liability companies (LLCs) that consist of the same members are treated as a single employer unless, subject to certain provisions, each of those LLCs files a written request with DWD to be treated as a separate employer and DWD approves the request. Under the bill, consistent with the Federal Unemployment Tax Act (FUTA), multiple LLCs that consist of the same members are always treated as separate employers, for purposes of the UI law.

Other changes

License revocations based on UI contribution delinquencies

Current law requires various state agencies and boards (licensing departments) that issue various licenses and other credentials (licenses) to revoke a license or deny an application for a license if the Department of Revenue (DOR) certifies that the license holder or applicant owes DOR delinquent taxes. Current law also allows the Wisconsin Supreme Court to decide whether to revoke or deny an application for a license to practice law if the license holder or applicant is certified by DOR to owe delinquent taxes. This bill creates similar provisions for license holders and applicants that DWD certifies are liable for delinquent UI contributions. UI contributions are taxes employers must pay to DWD for deposit with the federal government, and which are then used to pay the claims of claimants for UI benefits. The bill also includes within the definition of UI contributions other assessments, interest, fees, and penalties that have been imposed upon employers in connection with their UI contribution obligations. The provisions created in the bill apply only to delinquent UI contributions for which the employer has exhausted all legal rights to challenge the employer's liability.

Under the bill, each licensing department must enter into a memorandum of understanding with DWD. Under the memorandum, the licensing department must ask DWD to certify whether a license holder or applicant is liable for delinquent UI contributions. If DWD certifies to a licensing department that a license holder or applicant is liable for delinquent UI contributions, the licensing department must revoke the license or deny the application for a license. A licensing department must mail a notice of revocation or denial to the license holder or applicant, and the notice must inform the applicant or license holder of the right to a review of DWD's certification at a hearing conducted by DWD. The hearing is limited to questions of mistaken identity and prior payment of the delinquent UI contributions. Following the hearing, if DWD does not uphold its certification, DWD must issue the holder or applicant a nondelinquency certificate and the licensing department must reinstate the license or approve the application for a license without requiring any additional application, fee, or test, unless there are other grounds for denial or revocation. If DWD does uphold its certification, DWD must so inform the license holder or applicant and the licensing department. The license holder or applicant may seek judicial review of an adverse determination by DWD at the hearing by filing a petition for review in the Dane County circuit court and may appeal the court's decision. A license holder or applicant whose license has been revoked or denied because of delinquent UI contributions may also, after satisfying that debt, request DWD to issue a nondelinquency certificate, which the license holder or applicant may then present to have the license reinstated, unless there are other grounds for not reinstating the license or for denying the application.

The bill includes the following within the definition of licensing department: the Department of Administration; the Board of Commissioners of Public Lands; the Department of Children and Families; the Government Accountability Board; the Department of Financial Institutions; the Department of Health Services; the Department of Natural Resources; the Department of Public Instruction; the Department of Revenue; the Department of Safety and Professional Services; the Office of the Commissioner of Insurance; and the Department of Transportation. The bill applies to various licenses administered by the aforementioned licensing departments.

The bill allows DWD to deny an application for or revoke various licenses administered by DWD if the license holder or applicant is liable for delinquent UI contributions. Such a license holder or applicant has the same rights to review by DWD and to judicial review as do holders of or applicants for licenses administered by other licensing departments.

The bill also requests the Wisconsin Supreme Court to enter into a similar memorandum of understanding with DWD. If DWD determines that a licensed attorney or an applicant for a license to practice law is liable for delinquent UI contributions, DWD may send the attorney or applicant a notice of that determination. The attorney or applicant has the same rights to a hearing and judicial review as do other license holders or applicants. However, DWD may not send the supreme court a certification of UI contribution delinquency until the attorney or applicant has exercised or exhausted his or her full rights to judicial review. If the determination is upheld following the holder or applicant's exercise or exhaustion of rights to judicial review, DWD may then certify to the supreme court that the attorney or applicant is liable for delinquent UI contributions. The supreme court may then decide whether to suspend, revoke, or deny the attorney's or applicant's license to practice law.

Financial record matching program

Currently, the Departments of Children and Families, Revenue, and Health Services (departments) operate financial records matching programs whereby the departments, for various asset verification or determination purposes, match data possessed by the departments with the records of financial institutions. This bill establishes a similar financial records matching program with DWD to allow DWD to identify the assets of persons who are delinquent in paying debts related to the UI program (UI debtors).

Under the program, financial institutions doing business in this state must enter into agreements with DWD to participate in a financial institution matching option or a state matching option. DWD may pay such a financial institution up to $125 per calendar quarter for participating.

Under the financial institution matching option, at least once every calendar quarter DWD sends information to the financial institution, including names, addresses, and social security numbers, about UI debtors. The financial institution determines whether any UI debtor has an ownership interest in an account at the financial institution and, if so, sends DWD information about the account, such as the type, number, and balance.

Under the state matching option, at least once every calendar quarter the financial institution sends DWD information about accounts maintained at the financial institution, including the name and social security number of each person having an ownership interest in each account. On the basis of that information, DWD determines whether any UI debtor has an ownership interest in an account at the financial institution and, if so, may request further information from the financial institution, including the person's address of record and the account balance.

The bill prohibits DWD from disclosing or retaining information concerning account holders who are not UI debtors; prohibits employees, agents, officers, and directors of financial institutions from disclosing or retaining information concerning UI debtors; and prohibits both DWD and financial institutions from using any information received under the program for any purpose not related to the program. The bill provides penalties for any employee, agent, officer, or director of a financial institution who violates any of the prohibitions. The bill also provides that a financial institution is not liable for disclosing financial information, or for taking any other action, in compliance with the program.