Proposed statute change could make it easier for DWD to find benefit fraud

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A proposed change to the state’s unemployment insurance statutes could make it easier for jobless benefit claimants to be charged with fraud.

At a recent meeting, the Unemployment Insurance Advisory Council unanimously approved a draft of a plan to overhaul the state’s unemployment insurance statutes. Although the  proposal is official, the council only serves in an advisory capacity to the state Legislature and an official bill has yet to be introduced or sponsored by a lawmaker.

The proposal includes technical changes made by drafting attorneys at the Legislative Fiscal Bureau. It also contains language that would change the definition of concealment as found in 108.04(11)(g). Although the council approved the change at its Oct. 29 meeting, the language was released for the first time only on Thursday.

Current state law imposes penalties 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 by working.

The proposal approved by the council inserts two new sections into the statute. One creates a list of factors the Department of Workforce Development must consider in deciding whether a claimant intended to mislead the department over benefits.

The factors include whether claimants failed to read or follow instructions and other communications from the DWD, whether they relied on advice provided by someone other than a department employee who authorized to give advice on jobless benefits, and whether they had some sort of limitation or disability.

The section also states that claimants have a “duty of care” to provide accurate, complete responses when prompted by the DWD.

The second section states that the department is not required to “determine or prove” whether claimants acted intentionally when they collected benefits they were not entitled to.

While it appears contradictory, the language will probably make it easier for the DWD to hand down penalties for concealment, said the employment attorney Victor Forberger, who often represents claimants who have been accused of concealment.

“Generally, it’s pretty bad news for claimants and for lawyers hoping that all employees will be able to claim benefits without being trapped by a concealment charge later on,” he said.

While the proposal still says that concealment must be intentional, the proposed second section would prevent the DWD from having to prove that a claimant intended to defraud the department.

Forberger also noted that the proposal gives claimants a “duty of care,” but does not define what standard they will be held to.

The proposed change comes on the heels of legislation that, if passed, would ratchet up the penalties for concealment. One such proposal is Assembly Bill 212, sponsored by .

Under current law, a person who commits concealment must pay back any money received from the state, plus a 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 fined between $100 and $500 and be made to spend as many as 90 days in prison for each offense.

Assembly Bill 212, put forward by state Rep. Samantha Kerkman, R-Salem, and Sen. Rob Cowles, R-Green Bay, would prevent those who defraud the system from claiming unemployment benefits for seven years. The bill passed the Assembly on Nov. 3 but its Senate companion bill has not yet been scheduled for a vote. Kerkman has also introduced a bill, Assembly Bill 533, containing language that, once contained in Walker’s proposed 2015-17 budget but later removed, calls for increases to concealment penalties based on the amount of benefits fraudulently received. Follow @erikastrebel