ORDER OF THE WISCONSIN
DEPARTMENT OF WORKFORCE DEVELOPMENT
The Wisconsin Department of Workforce Development ("the Department") adopts the following emergency rule to amend DWD 123.01 and to create DWD 123.04, relating to benefit charges for initial claims related to the public health emergency declared by Executive Order 72.
The Governor approved the scope statement for this rule, SS 144-20, on October 28, 2020. The scope statement was published in register No. 779A1, on November 2, 2020. The notice of preliminary hearing and comment period on the scope statement was published on November 2, 2020, in register No. 779A1. The preliminary hearing on the scope statement was held on November 9, 2020. The Department received no comments at the preliminary hearing. The Department approved the scope statement on November 16, 2020. This rule was approved by the Governor on April 30, 2021.
Analysis Prepared by the Department of Workforce Development
Finding of Emergency
By Executive Order 72, on March 12, 2020, the Governor declared a public health emergency to protect the health and well-being of the state’s residents and directed state agencies to assist as appropriate in the State’s ongoing response to the public health emergency. On March 13, 2020, the President declared a national emergency concerning the COVID-19 pandemic. Due to the pandemic, many businesses have temporarily or permanently closed, resulting in significant business income reduction and layoffs. On April 4, 2020, the President issued a declaration under the Stafford Act that a major disaster exists in Wisconsin, beginning January 30, 2020 and continuing, due to the COVID-19 pandemic.
2019 Wis. Act 185, sec. 50, which created s. 108.07(5)(bm)1., Stats., directed the Department to provide employers charging relief for unemployment benefits for initial claims that are related to the public health emergency declared on March 12, 2020 by Executive Order 72, for benefits payable between March 12, 2020 and December 31, 2020. 2021 Wis. Act. 4, sec. 5, which created s. 108.07(5)(bm)1m., Stats., extended the charging relief from December 31, 2020 to March 13, 2021, and requires the Department to presume that all initial claims for benefits through that date relate to the public health emergency unless the most recent separation from unemployment is due to a labor dispute, voluntary termination of work, discharge for misconduct, or discharge for substantial fault. Under s. 108.07 (5) (bm), Stats., the Department is directed to charge unemployment benefits for initial claims that are related to the public health emergency first declared on March 12, 2020, by Executive Order 72, to the balancing account of the Trust Fund for contribution employers. For reimbursable employers, the Department charges such benefits to the interest and penalty appropriation. 2019 Wis. Act 185 also created s. 108.04 (2) (d), Stats., which requires employees and employers to “indicate whether a claim for regular benefits is related to the public health emergency declared on March 12, 2020, by executive order 72” when the Department requests. The statute does not provide a deadline for employees or employers to submit the information. That paragraph further provides that the Department “may specify the information required to be provided.” The Department’s antiquated computer systems are ill-equipped to handle the changes in charges from the employers’ accounts to the balancing account or interest and penalty appropriation. Each weekly claim to be recharged under s. 108.07 (5) (bm), Stats., requires the Department to change each weekly benefit charge from the employer’s account, after any federal funds have been appropriately applied, to the balancing account or interest and penalty appropriation. The Department is working toward completing this process by June 30, 2021. Under ss. 108.02 (8), 108.02 (22), and 108.18 (4), Stats., “an employer’s contribution rate on the employer’s payroll for a given calendar year shall be based on the reserve percentage of the employer’s account as of the applicable computation date,” s. 108.18 (4), Stats., which is June 30 of each year. Section 108.02 (22), Stats., requires the Department to determine the status of an employer’s account when setting the reserve percentage for contribution purposes as of the computation date. If the recharging of benefits from employer accounts to the balancing account is not completed by June 30, 2021 for contribution employers, those employers’ contribution rates for 2022 could be set higher than they should be under the charging relief enacted by 2019 Wis. Act 185 and 2021 Wis. Act 4. Contribution rates that are incorrectly set higher than they should be could adversely affect employers’ abilities to recover financially from the economic downturn caused by the pandemic. If the recharging of benefits from employer accounts to the interest and penalty appropriation is not completed as soon as possible for reimbursable employers, those employers will continue to receive monthly bills for reimbursements that they should not be required to pay under 2019 Wis. Act 185 and 2021 Wis. Act 4 and that they might not be able to afford to pay due to the economic downturn caused by the pandemic.
In order to meet the June 30, 2021 completion date, the Department needs the requested information from employers to determine whether or not they are entitled to charging relief unless the claims fall within the charging relief presumption. This rule sets a deadline to submit requests for charging relief to ensure that all recharging work is completed by the June 30, 2021 deadline.
A permanent rule is not appropriate because the relief of charging statutes only apply for a limited time.
Explanation of Statutory Authority
The Department has specific and general authority to establish rules interpreting and clarifying provisions of ch. 108, Stats., unemployment insurance and reserves, and general authority for promulgating rules with respect to ch. 108, Stats., under s. 108.14 (2), Stats.
Related Statutes or Rules
To implement the charging relief required under 2019 Wis. Ac 185, the Department promulgated EmR2044, which has an initial expiration date of May 5, 2021. Because EmR2044 was promulgated before the enactment of 2021 Wis. Act 4, which creates the presumption for charging relief for initial claims unless certain exceptions apply, the Department is promulgating this new emergency rule to be consistent with Act 4.
Plain Language Analysis
The emergency rule determines the information that employers must submit, if any, to request charging relief for initial claims that relate to the public health emergency declared on March 12, 2020, by Executive Order 72 between March 15, 2020 and March 13, 2021, to comply with s. 108.07 (5) (bm), Stats.
If a claimant’s most recent employment separation is not due to a labor dispute, voluntary termination of work, discharge for misconduct, or discharge for substantial fault, and the claimant’s initial claim is for a benefit year beginning on or after March 15, 2020 through March 13, 2021, the Department will presume that the claim relates to the public health emergency declared on March 12, 2020, by Executive Order 72. All employers who paid base period wages to the claimant will be relieved of the benefit charges for that claim and employers will not be required to request the relief.
An employer that paid base period wages may request charging relief if the most recent employment separation is due to a voluntary termination of work that would otherwise be charged to the employer and the claimant’s initial claim is for a benefit year beginning on or after March 15, 2020 through March 13, 2021 and if the employer certifies that certain circumstances apply to the initial claim. If the most recent separation is due to a labor dispute, misconduct, substantial fault, or a voluntary termination of work, the unemployment benefits are already not charged to the employer under pre-pandemic law. An employer may meet the requirement by certifying that any of the following conditions exist:
- The employer’s business/operations reduced, suspended, or ceased after experiencing a significant reduction in business due to a Safer at Home order or a government-issued health order that restricts business operations.
- The employer’s business/operations reduced, suspended, or ceased due to other businesses (including suppliers) having reduced, suspended, or ceased operations.