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As many of you know, Wisconsin unemployment insurance law underwent substantial changes as a result of the 2013-2015 biennial budget bill, passed as 2013 Wisconsin Act 20 (“Act 20”) on June 30, 2013, and 2013 Wisconsin Act 36 (“Act 36”) enacted on July 5, 2013. These changes, which substantially narrow Wisconsin unemployment insurance eligibility requirements for employees seeking benefits, will have dire consequences on many unskilled or impoverished workers who now face daunting obstacles in qualifying for benefits. Indeed, these changes were enacted specifically to reduce unemployment insurance benefits payments made by Wisconsin employers, representing yet another concession to business interests at the expense of the working poor. Since a comprehensive description of the all the changes enacted by both Act 20 and Act 36 would be impractical, this article will briefly address some of the largest changes wrought by both Acts which are in force now and will begin impacting some benefit determinations immediately or in the week of January 5, 2014.

Misconduct

The largest change from Act 20 centers on the concept of “misconduct.” Generally speaking, an employee is ineligible for benefits subject to certain conditions if he or she was terminated for “misconduct.” Previously, a finding of misconduct required the employer to prove that an employee has engaged in “. . . conduct evincing such willful or wanton disregard of an employer’s interested as is found in deliberate violations . . . .” Boynton Cab Co. v. Neubeck & Industrial Comm’n, 237 Wis. 249, 296 N.W. 636 (1941). This concept, which has been interpreted rather consistently since its pronouncement over seventy-years ago, has now been codified by Act 20 but concurrently stripped of some of its discretionary breadth. Specifically, Act 20 now provides explicit examples of misconduct which will disqualify an employee from receiving benefits, thereby limiting the discretion an administrative law judge maintains in performing a case-by-case analysis. These specific examples solidify various scenarios giving rise to a misconduct claim – an employee’s putative violation of an employer’s substance abuse policy; alleged criminal conduct connected with the employment on or off-duty; threats of harassment; absenteeism; falsifying business records; and violations of state, federal or tribal regulations—but serve only to restrict a claimant’s ability to distinguish his or her case and the administrative law judge’s capacity to acknowledge those distinctions.

Substantial Fault

Act 20 also provides a new disqualification standard described as “substantial fault.” Under this new standard, employees are disqualified from receiving Wisconsin unemployment insurance benefits subject to certain conditions if they are terminated for “substantial fault” in connection with their employment. Unlike the Boynton Cab standard which forces an employer to prove an employee’s intent to commit a deliberate violation, “substantial fault” is defined to include “those acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the employer.” This new standard also creates exceptions—one or more minor infractions of rules unless an infraction is repeated after the employer warns the employee; one or more inadvertent errors made by the employee; or any failure by the employee to perform work because of insufficient skill, ability or equipment—but only further serves to strip employees of their arguments to qualify for benefits.

“Voluntary Quit”

Another aspect of Act 20 which further serves to diminish an employee’s ability to qualify for benefits is the elimination of exceptions to the “voluntary quit” rule. Generally speaking, an employee who resigns from employment is not eligible for benefits. Until recently, Wisconsin unemployment insurance law provided numerous exceptions to that general rule, allowing employees some latitude in explaining the reasons for their separation from employment. Act 20 eliminates several of those exceptions and disqualifies an employee from receiving benefits under specific scenarios. A comprehensive description of these specific scenarios is outside the scope of this article, but it is important to highlight the most commonly invoked exceptions:

1) If the employee quit part-time work because the employee lost his or her full-time work and can no longer economically continue the part-time work;

2) If an employee has two or more concurrently held positions, at least one of which is full-time work, and quits one before receiving notice of termination from a position which is full-time work;

3) An employee’s recall to work for a former employer within one (1) year of working for that employer.

Finally, the prior requirement that an employee earn four (4) weeks of wages at subsequent employment following a quit was repealed, meaning that an employee who voluntarily quit work and was initially disqualified from receiving benefits can no longer receive benefits, even if he or she received four weeks of wages from a new position.

Failure To Find Suitable Work/New Work Search Requirements

Until the enactment of Act 36, Wisconsin unemployment insurance laws contained provisions providing that a claimant who refused “suitable work” or refused to return to work for a former employer upon recall lost eligibility for benefits for four weeks and until the employee earned four times his or her weekly benefit in new employment. Act 36 changes this position and penalizes an employee who refuses “suitable work” by denying eligibility for benefits until he or she receives six times his or her weekly benefit rate in new employment. This new provisions applies with respect to benefit determinations or appealed decisions beginning on January 5, 2014, and severely limits an employee’s ability to maintain discretion in determining where he or she chooses to work.
Similarly, Act 20 imposes new requirements on the number of work search actions an employee must complete each week to receive benefits. Previously, a “reasonable” work search was comprised of two (2) actions per week but Act 20 now requires at least four (4) work search actions each week.

Conclusion

Act 20 and Act 36 have unfortunately given employers more leverage to challenge employee eligibility and divested the Division of discretion in assisting employees accessing benefits. These are just some of the changes which might apply to employees who are seeking benefits. There are many more issues and complexities to these laws and their application to employees. If you have questions about your eligibility for benefits, please contact one of the experienced Wisconsin employment attorneys at Hawks Quindel, S.C.

Colin Good

Associate at Hawks Quindel, S.C.
Attorney Colin Good has the expertise and experience necessary to help navigate any obstacles or challenges you may face in the workplace. He has dedicated his practice to seeking fair treatment for workers through the enforcement of local, state, and federal labor and employment laws, and looks forward to assisting you in achieving your goals, whatever they may be.