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Battle rages over unemployment benefits

By: Erika Strebel, [email protected]//October 7, 2015//

Battle rages over unemployment benefits

By: Erika Strebel, [email protected]//October 7, 2015//

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An independent body that reviews unemployment-payment rulings has again taken state officials to task over charging claimants with defrauding Wisconsin’s benefits program.

In a decision handed down Monday, the state’s Labor and Industry Review Commission admonished an administrative-law judge for charging a Madison man for concealing wages he had earned while working as a banquet server at various hotels in Madison.

Current state law allows a series of penalties to be imposed on unemployment claimants who are found to have concealed material facts related either to their ability to obtain benefits or to the wages they had earned while working. Specifically, those deemed to have committed the misdeeds can be forced to pay back any money they received from the state, plus an administrative penalty equal to 15 percent of the ill-gotten gains. That surcharge amount, because of legislation recently passed by state lawmakers and Gov. Scott Walker, is scheduled to increase to 40 percent starting next year.

Concealment can also come with criminal charges. A person found guilty can be made to pay a fine of between $100 and $500 and to spend as many as 90 days in prison for each offense.

In the recent case concerning the hotel worker, the Labor and Industry Review Commission — an independent body that can review unemployment decisions made by state administrative judges — found that state officials had misapplied the concealment statute. The commission ruled in particular that the state had failed to show that the worker, a man named Marcus Johnson, had intentionally provided misinformation about his wages when he was filing for partial-unemployment benefits between 2008 and 2014.

Marcus, according to case documents, had faithfully reported his “base wage” during that time but had not known what to do with the commissions that he earned and that caused his total compensation to vary from paycheck to paycheck. To prove concealment under current law, the state must show that misinformation was submitted on purpose rather than by mistake.

The Labor and Industry Review Commission found that that responsibility had been ignored by the administrative-law judge who initially ruled on Johnson’s case.

“The (judge) clearly aligned herself with the department throughout the hearing,” the commission noted, “and placed the burden on the employee to prove that he did not intentionally mislead or defraud the department rather than on the department to prove that he did.”

The Labor and Industry Review Commission and officials in the Department of Workforce Development have been feuding recently over whether the burden of proving that concealment was intentional should fall on claimants or the state. DWD maintains that nothing has changed in its interpretation of the law and that it is committed to fighting fraud in the unemployment-benefit system.

Yet some critics of the DWD have said the agency is merely trying to shore up the state’s unemployment insurance fund, which went nearly $1.7 billion into the red during the recession in 2008. It has only been recently that the fund has started to show signs of renewed strength.

At the end of July, it had a $735.4 million surplus, up from $235.2 million at the end of July 2014. This year’s figure marked the first time since April 2007 that the fund’s balance has been more than $700 million.

Also, according to DWD, employers are now paying less taxes into the fund.

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