SB671: Bill Text

LRB-5065/1

MED&MIM:kjf/ahe/cjs

2019 - 2020 LEGISLATURE

2019 Senate BILL 671

January 8, 2020 - Introduced by Committee on Labor and Regulatory Reform, by request of Department of Workforce Development. Referred to Committee on Labor and Regulatory Reform.

SB671,1,7 An Act to repeal 16.48 (1) (b) and 16.48 (2); to renumber and amend 16.48 (1) (a) (intro.) and 16.48 (1) (a) 1., 2., 3., 4., 5. and 6.; to amend 16.48 (3), 71.93 (8) (b) 2., 108.02 (13) (k), 108.05 (3) (a), 108.05 (3) (c) (intro.), 108.065 (1e) (intro.), 108.151 (7) (c), 108.151 (7) (f), 108.155 (2) (a), 108.16 (6w) and 108.22 (10); and to create 16.48 (4), 108.02 (10e) (c), 108.05 (3) (cm), 108.065 (3m), 108.101 (5), 108.151 (7) (i) and 108.16 (6m) (j) of the statutes; relating to: various changes to the unemployment insurance law.

Analysis by the Legislative Reference Bureau

This bill makes various changes in the unemployment insurance (UI) law, which is administered by the Department of Workforce Development. Significant changes include all of the following:

Unemployment insurance financial outlook statement; council report; special committee

Under current law, DWD must submit a statement regarding the unemployment insurance financial outlook to the governor and legislative leadership by April 15 of every odd-numbered year. The report must contain all of the following: 1) financial projections of unemployment insurance operations, including benefit payments, tax collections, borrowing or debt repayments, and any amounts of interest charges and the economic and public policy assumptions upon which the projections are based, and the impact upon the projections of variations from those assumptions; 2) proposed changes to the laws relating to unemployment insurance financing, benefits, and administration and financial projections under the proposed changes; 3) if there are significant cash reserves in the unemployment fund, the justifications for maintaining them; and 4) if program debt is projected at the end of the forecast period, the reasons DWD is not proposing to liquidate the debt.

This bill changes the submittal deadline of the statement to May 31 of every even-numbered year. The bill also requires the statement to contain proposed methods for liquidating any debt, instead of the reasons DWD is not proposing to liquidate any debt.

Under current law, DWD must submit a report of the activities of the Council on Unemployment Insurance to the governor and legislative leadership by May 15 of each odd-numbered year. Current law also requires DWD to submit to each member of the legislature by June 15 of each odd-numbered year an updated statement of unemployment insurance financial outlook.

The bill replaces the two aforementioned requirements with a single requirement for DWD to submit, by January 31 of each even-numbered year, a report of the activities of the Council on Unemployment Insurance and the most recent statement regarding the unemployment insurance financial outlook to the governor and legislative leadership, rather than to every member of the legislature.

Finally, under current law, after the report and statement are submitted to the governor and leadership on May 15 of each odd-numbered year, the governor may convene a special committee to review the financial outlook statement and the activities report. This bill repeals that provision. Under current law, the governor may otherwise convene a committee by executive order.

Benefits for certain employees

Under current law, a claimant for UI benefits is ineligible to receive any benefits for a week in which the claimant performs 32 or more hours of work. This bill requires DWD to disregard an employee's hours worked for an employer in a given week and wages payable to the employee for that week when determining the employee's benefit eligibility if certain conditions apply, including that the employer requires the employee to work during the week as a condition of continued employment with the employer and the employer is unable to pay wages because a government unit or the federal government fails to appropriate funds to the employer.

Effect of criminal convictions

Current law provides that no finding of fact or law, determination, decision, or judgment in any action or administrative or judicial proceeding in law or equity not arising under the UI law made with respect to the rights or liabilities of a party to an action or proceeding under the UI law is binding in an action or proceeding under the UI law.

The bill provides that notwithstanding this provision, a final order or judgment of conviction for a crime entered by a court is binding on the convicted person in an action or proceeding under the UI law that relates to the criminal conviction, and that a person convicted of a crime is precluded from denying the essential allegations of the criminal offense that is the basis for the conviction in an action or proceeding under the UI law.

Reimbursable employer debt assessment

Under current law, DWD must annually determine the total amount due and uncollectible from nonprofit employers that have elected what is known as reimbursement financing (reimbursable employers), and DWD must then charge that amount to an uncollectible reimbursable benefits account in the unemployment reserve fund. Whenever, as of a given year, that account has a negative balance of $5,000 or more, DWD must assess all such nonprofit reimbursable employers to reimburse for the uncollectible amount, except that employers that would otherwise be assessed less than $10 are not assessed, and their portion is instead applied to the amount owed by other employers on a pro rata basis.

Also under current law, pursuant to 2015 Wisconsin Act 334, $2,000,000 was set aside in the unemployment reserve fund to repay reimbursable employers for erroneous payments charged to them that resulted from a false statement or representation (e.g., identity theft).

The bill does the following:

1. Raises the threshold for charging a reimbursable nonprofit employer the assessment to $20 instead of $10.

2. Allows DWD, in lieu of or in addition to assessing nonprofit reimbursable employers as described above, to apply moneys from the $2,000,000 set aside to the uncollectible reimbursable benefits account described above, subject to certain limitations.

Waiver of overpayments

Current law requires the recovery of benefits that were erroneously paid to an individual to be waived if certain conditions apply, including that the erroneous payment was the result of a departmental error. Current law specifies what does and does not constitute a “departmental error” and also provides that if a determination or decision is amended, modified, or reversed by an appeal tribunal (administrative law judge), the Labor and Industry Review Commission, or any court, that action is not to be treated as establishing a departmental error.

This bill specifically provides that, for the purposes of the waiver of recovery of benefits, a “departmental error” does not include an error made by an administrative law judge.

Collection of debt by Department of Revenue

Subject to certain exceptions, current law requires a state agency and the Department of Revenue to enter into a written agreement to have DOR collect certain amounts owed to the state agency. This bill prohibits DOR from entering into an agreement with DWD for the collection of amounts owed to DWD under the UI law.

Fiscal agent election of employer status

Generally, under current law, an individual who receives long-term support services in his or her home through certain government-funded care programs is considered to be an employer under the UI law of a person who provides those services to the individual. Such individuals may use fiscal agents, whose responsibilities include remitting any federal UI taxes or state UI contributions owed by the individual as a result of that employment.

The bill allows a private agency that serves as a fiscal agent or contracts with a fiscal intermediary to serve as a fiscal agent to such an individual receiving long-term support services to elect to instead to be the employer of one or more employees providing those services, subject to certain requirements.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB671,1 Section 1 . 16.48 (1) (a) (intro.) of the statutes is renumbered 16.48 (1) (intro.) and amended to read:

SB671,4,9 16.48 (1) (intro.) No later than April 15 May 31 of each odd-numbered even-numbered year, the secretary of workforce development shall prepare and furnish to the governor, the speaker of the assembly, the minority leader of the assembly, and the majority and minority leaders of the senate, and the council on unemployment insurance, a statement of unemployment insurance financial outlook, which shall contain all of the following, together with the secretary's recommendations and an explanation for such recommendations:

SB671,2 Section 2 . 16.48 (1) (a) 1., 2., 3., 4., 5. and 6. of the statutes are renumbered 16.48 (1) (am), (bm), (c), (d), (e) and (f), and 16.48 (1) (bm), (c) and (f), as renumbered, are amended to read:

SB671,4,14 16.48 (1) (bm) Specific proposed changes, if any, in the laws relating to unemployment insurance financing, benefits, and administration.

SB671,4,15 (c) Projections specified in subd. 1. par. (am) under the proposed laws.

SB671,4,17 (f) If unemployment insurance program debt is projected at the end of the forecast period, the reasons why it is not methods proposed to liquidate the debt.

SB671,3 Section 3. 16.48 (1) (b) of the statutes is repealed.

SB671,4 Section 4 . 16.48 (2) of the statutes is repealed.

SB671,5 Section 5 . 16.48 (3) of the statutes is amended to read:

SB671,5,14 16.48 (3) No Biennially, no later than June 15 January 31 of each odd-numbered even-numbered year, the secretary of workforce development, under the direction of shall submit to the governor, shall submit to each member of the legislature an updated speaker of the assembly, the minority leader of the assembly, the majority and minority leaders of the senate, and the council on unemployment insurance the statement of unemployment insurance financial outlook which shall contain the information specified in prepared under sub. (1) (a), together with the governor's recommendations and an explanation for such recommendations, and a copy of the a report required that summarizes the deliberations of the council and the position of the council regarding any proposed change to the unemployment insurance laws submitted under sub. (1) (b).

SB671,6 Section 6 . 16.48 (4) of the statutes is created to read:

SB671,5,18 16.48 (4) The department shall post the most recent version of the statement prepared under sub. (1) and the most recent version of the report prepared under sub. (3) on the department's Internet site.

SB671,7 Section 7 . 71.93 (8) (b) 2. of the statutes is amended to read:

SB671,5,23 71.93 (8) (b) 2. The department may enter into agreements described under subd. 1. with the courts, the legislature, authorities, as defined in s. 16.41 (4), and local units of government. The department may not enter into an agreement described under subd. 1. to collect amounts owed under ch. 108.

SB671,8 Section 8 . 108.02 (10e) (c) of the statutes is created to read:

SB671,6,2 108.02 (10e) (c) “Departmental error” does not include an error made by an appeal tribunal appointed under s. 108.09 (3).

SB671,9 Section 9. 108.02 (13) (k) of the statutes, as affected by 2019 Wisconsin Act 9, is amended to read:

SB671,6,11 108.02 (13) (k) “Employer" Except as provided in s. 108.065 (3m), “employer” does not include a county department, an aging unit, or, under s. 46.2785, a private agency that serves as a fiscal agent or contracts with a fiscal intermediary to serve as a fiscal agent under s. 46.27 (5) (i), 46.272 (7) (e), or 47.035 as to any individual performing services for a person receiving long-term support services under s. 46.272 (7) (b), 46.275, 46.277, 46.278, 46.2785, 46.286, 46.495, 51.42, or 51.437 or personal assistance services under s. 47.02 (6) (c).

SB671,10 Section 10 . 108.05 (3) (a) of the statutes is amended to read:

SB671,7,2 108.05 (3) (a) Except as provided in pars. (c), (cm), (d) and (dm) and s. 108.062, if an eligible employee earns wages in a given week, the first $30 of the wages shall be disregarded and the employee's applicable weekly benefit payment shall be reduced by 67 percent of the remaining amount, except that no such employee is eligible for benefits if the employee's benefit payment would be less than $5 for any week. For purposes of this paragraph, “wages" includes any salary reduction amounts earned that are not wages and that are deducted from the salary of a claimant by an employer pursuant to a salary reduction agreement under a cafeteria plan, within the meaning of 26 USC 125, and any amount that a claimant would have earned in available work under s. 108.04 (1) (a) which is treated as wages under s. 108.04 (1) (bm), but excludes any amount that a claimant earns for services performed as a volunteer fire fighter, volunteer emergency medical services practitioner, or volunteer emergency medical responder. In applying this paragraph, the department shall disregard discrepancies of less than $2 between wages reported by employees and employers.

SB671,11 Section 11 . 108.05 (3) (c) (intro.) of the statutes is amended to read:

SB671,7,7 108.05 (3) (c) (intro.) Except as provided in par. (cm) and when otherwise authorized in an approved work-share program under s. 108.062, a claimant is ineligible to receive any benefits for a week in which one or more of the following applies to the claimant for 32 or more hours in that week:

SB671,12 Section 12 . 108.05 (3) (cm) of the statutes is created to read:

SB671,7,11 108.05 (3) (cm) The department shall disregard an employee's hours worked for an employer in a week and wages payable to the employee for the week when determining the employee's benefit eligibility if all the following apply:

SB671,7,13 1. The employer requires the employee to work during the week as a condition of continued employment with the employer.

SB671,7,15 2. The employer is unable to pay wages because a government unit or the federal government fails to appropriate funds to the employer.

SB671,7,18 3. The employer is not expected to pay the employee for the services performed or the employer will, until funds are appropriated by a government unit or the federal government, indefinitely delay payment for the services performed.

SB671,13 Section 13 . 108.065 (1e) (intro.) of the statutes is amended to read:

SB671,7,23 108.065 (1e) (intro.) Except as provided in subs. (2) and (3) to (3m), if there is more than one employing unit that has a relationship to an employee, the department shall determine which of the employing units is the employer of the employee by doing the following:

SB671,14 Section 14 . 108.065 (3m) of the statutes is created to read:

SB671,8,9 108.065 (3m) A private agency that serves as a fiscal agent or contracts with a fiscal intermediary to serve as a fiscal agent to recipients of services under ch. 46, 47, or 51 may elect to be the employer of one or more employees providing those services. As a condition of eligibility for election to be the employer of one or more employees providing those services, the private agency shall notify in writing the recipient of any such services of its election, for purposes of the unemployment insurance law, to be the employer of any worker providing such services to the recipient, and must be treated as the employer under 26 USC 3301 to 3311 for purposes of federal unemployment taxes on the worker's services.

SB671,15 Section 15 . 108.101 (5) of the statutes is created to read:

SB671,8,16 108.101 (5) Notwithstanding sub. (4), a final order or judgment of conviction for a crime entered by a court is binding on the convicted person in an action or proceeding under this chapter that relates to the criminal conviction. A person convicted of a crime is precluded from denying the essential allegations of the criminal offense that is the basis for the conviction in an action or proceeding under this chapter.

SB671,16 Section 16. 108.151 (7) (c) of the statutes is amended to read: