Under the bill, the penalty for a first or second such violation remains as specified under current law, the penalty for a third violation is $3,000, and the penalty for a fourth or subsequent violation is $4,000.
Currently, an uninsured employer must pay to DWD an amount that is equal to the greater of the following: 1) twice the amount that the uninsured employer would have paid for worker’s compensation coverage during periods in which the employer was uninsured in the preceding three years or 2) $750 or, if certain conditions apply, $100 per day.
The bill provides that the amounts an uninsured employer must pay to DWD for a determination of a failure to carry worker’s compensation insurance are as follows:
1. For a first or second determination, the amounts specified in current law.
2. For a third determination, the greater of the following: a) three times the amount that the uninsured employer would have paid for worker’s compensation coverage during periods in which the employer was uninsured in the preceding three years or b) $3,000.
3. For a fourth or subsequent determination, the greater of the following: a) four times the amount that the uninsured employer would have paid for worker’s compensation coverage during periods in which the employer was uninsured in the preceding three years or b) $4,000.
False or fraudulent worker’s compensation insurance applications
Current law specifies criminal penalties for various types of insurance fraud, which are punishable as either a Class A misdemeanor or a Class I felony, depending on the value of the claim or benefit. The bill adds to the list of criminally punishable insurance fraud the following: 1) the presentation of false or fraudulent applications for worker’s compensation insurance coverage and 2) the presentation of applications for worker’s compensation insurance coverage that falsely or fraudulently misclassify employees in order to lower premiums.
Also under current law, if an insurer or self-insured employer has evidence that a worker’s compensation claim is false or fraudulent, the insurer or self-insured employer must generally report the claim to DWD. If, on the basis of the investigation, DWD has a reasonable basis to believe that criminal insurance fraud has occurred, DWD must refer the matter to the district attorney for prosecution. DWD may request assistance from DOJ to investigate false or fraudulent activity related to a worker’s compensation claim. If, on the basis of that investigation, DWD has a reasonable basis to believe that theft, forgery, fraud, or any other criminal violation has occurred, DWD must refer the matter to the district attorney or DOJ for prosecution. The bill extends these requirements to insurers that have evidence that an application for worker’s compensation insurance coverage is fraudulent or that an employer has committed fraud by misclassifying employees to lower the employer’s worker’s compensation insurance premiums.
Worker’s compensation; substantial fault
Currently, under the worker’s compensation law, an employer is not liable for temporary disability benefits during an employee’s healing period if the employee is suspended or terminated from employment due to misconduct by the employee connected with the employee’s work. Current law defines “misconduct” by reference to the unemployment insurance (UI) law. The bill changes the definition of “misconduct” under the UI law, which change also applies for purposes of the worker’s compensation law as described above.
Reimbursements for supplemental worker’s compensation benefits
Under current law, worker’s compensation insurers must pay supplemental benefits to certain employees who were permanently disabled by an injury that is compensable under worker’s compensation.
DWD is authorized to collect up to $5,000,000 from insurers that provide worker’s compensation insurance to provide those supplemental benefits. This money must be used exclusively to provide reimbursements to insurers that pay those supplemental benefits and that request reimbursements. The bill creates a new, separate appropriation in the worker’s compensation operations fund, to be used exclusively to provide these reimbursements. The bill does not increase revenue to DWD or collections from insurers.
Unemployment insurance
Unemployment insurance; worker misclassification penalties
Current law requires DWD to assess an administrative penalty against an employer engaged in construction projects or in the painting or drywall finishing of buildings or other structures who knowingly and intentionally provides false information to DWD for the purpose of misclassifying or attempting to misclassify an individual who is an employee of the employer as a nonemployee under the UI law. The penalty under current law is $500 for each employee who is misclassified, not to exceed $7,500 per incident. In addition, current law provides for criminal fines of up to $25,000 for employers who, after having previously been assessed such an administrative penalty, commit another violation. Current law additionally requires DWD to assess an administrative penalty against such an employer who, through coercion, requires an employee to adopt the status of a nonemployee; the penalty amount is $1,000 for each employee so coerced, but not to exceed $10,000 per calendar year. Penalties are deposited into the unemployment program integrity fund.
The bill does the following: 1) removes the $7,500 and $10,000 limitations on the administrative penalties and provides that the penalties double for each act occurring after the date of the first determination of a violation; 2) removes the limitations on the types of employers to whom the prohibitions apply, making them applicable to any type of employer; and 3) specifies that DWD may make referrals for criminal prosecution for alleged criminal misclassification violations regardless of whether an employer has been subject to any other penalty or assessment under the UI law.
Increasing maximum weekly benefits
Under current law, a person who qualifies for UI receives a weekly benefit rate equal to a percentage of that person’s past earnings, but the weekly benefit rate is capped at $370. The bill changes the maximum weekly benefit rate in the following ways:
1. For benefits paid for weeks of unemployment beginning on or after January 4, 2026, but before January 3, 2027, the maximum weekly benefit rate is capped at $497.
2. For benefits paid for weeks of unemployment beginning on or after January 3, 2027, the maximum weekly benefit rate is increased based upon the change in the consumer price index and is then increased on the same basis annually thereafter.
Increasing benefit wage cap
Under current law, a person who qualifies for UI is ineligible to receive any UI benefits for a week if the person receives or will receive wages or certain other earnings totalling more than $500 (wage cap). The bill changes the wage cap in the following ways:
1. For weeks of unemployment beginning on or after January 4, 2026, but before January 3, 2027, the wage cap is increased to $672.
2. For weeks of unemployment beginning on or after January 3, 2027, the wage cap is increased based upon the change in the consumer price index and is then increased on the same basis annually thereafter.
Substantial fault
Under current law, a claimant for UI benefits whose work is terminated by his or her employer for substantial fault by the claimant connected with the claimant’s work is ineligible to receive UI benefits until the claimant satisfies certain requalification criteria. With certain exceptions, current law defines “substantial fault” to include those acts or omissions of a claimant over which the claimant exercised reasonable control and that violate reasonable requirements of the claimant’s employer. The bill eliminates this provision on substantial fault.
Misconduct
Under current law, a claimant for UI benefits whose work is terminated by his or her employer for misconduct by the claimant connected with the claimant’s work is ineligible to receive UI benefits until the claimant satisfies certain requalification criteria, and the claimant’s wages paid by the employer that terminates the claimant for misconduct are excluded for purposes of calculating benefit entitlement. Current law defines “misconduct” using a general, common law standard derived from Boynton Cab Co. v. Neubeck, 237 Wis. 249 (1941), and enumerates several specific types of conduct that also constitute misconduct. Under one of these specific provisions, misconduct includes 1) absenteeism on more than two occasions within the 120-day period before the date of the claimant’s termination, unless otherwise specified by his or her employer in an employment manual of which the claimant has acknowledged receipt with his or her signature, or 2) excessive tardiness by a claimant in violation of a policy of the employer that has been communicated to the claimant. In Department of Workforce Development v. Labor and Industry Review Commission (Beres), 2018 WI 77, the supreme court held that an employer could, under the language described above, institute an attendance policy more restrictive than two occasions within the 120-day period.
Current law also provides that absenteeism or tardiness count as misconduct only if the claimant did not provide to his or her employer both notice and one or more valid reasons for the absenteeism or tardiness. In Bevco Precision Manufacturing v. Labor and Industry Review Commission, 2024 WI App. 54, the court of appeals held that under Beres, this qualifying language did not apply if an employer had adopted its own standard on absenteeism and tardiness, as described above.
The bill does all of the following:
1. Eliminates the language referencing “excessive tardiness.”
2. Reverses the holding in Bevco by providing that a claimant’s notice and reason for an occasion of absenteeism or tardiness are to be analyzed under the common law misconduct standard. Under the bill, therefore, an employer may not establish its own policy for determining the reasonableness of absenteeism or tardiness. The bill does not, however, affect the general ability of an employer to institute a standard for absenteeism and tardiness more restrictive than two occasions within the 120-day period before termination.
3. Clarifies, in another provision defining misconduct, that “tribal government” has the meaning given under state and federal law for what is considered an Indian tribe.
Drug testing
Current state law requires DWD to establish a program to test certain claimants who apply for UI benefits for the presence of controlled substances in a manner that is consistent with federal law. A claimant who tests positive for a controlled substance for which the claimant does not have a prescription is ineligible for UI benefits until certain requalification criteria are satisfied or unless he or she enrolls in a substance abuse treatment program and undergoes a job skills assessment, and a claimant who declines to submit to a test is simply ineligible for benefits until he or she requalifies. The bill eliminates the requirement to establish the drug testing program.
Also under current law, an employer may voluntarily submit to DWD the results of a preemployment test for the presence of controlled substances that was conducted on an individual as a condition of an offer of employment or notify DWD that an individual declined to submit to such a test. If DWD then verifies that submission, the employee may be ineligible for UI benefits until he or she requalifies. However, a claimant who tested positive may maintain eligibility by enrolling in a substance abuse treatment program and undergoing a job skills assessment. The bill eliminates these preemployment drug testing provisions.
Acceptance of suitable work
Under current law, if a claimant for UI benefits fails, without good cause, to accept suitable work when offered, the claimant is ineligible to receive benefits until he or she earns wages after the week in which the failure occurs equal to at least six times the claimant’s weekly UI benefit rate in covered employment. Current law specifies what is considered “suitable work” for purposes of these provisions, with different standards applying depending on whether six weeks have elapsed since the claimant became unemployed. Once six weeks have elapsed since the claimant became unemployed, the claimant is required to accept work that pays lower and involves a lower grade of skill.
The bill modifies these provisions described above so that the claimant is not required to accept less favorable work until 10 weeks have elapsed since the claimant became unemployed.
Quits due to nonsuitable work
Under current law, unless an exception applies, if a claimant for UI benefits quits his or her job, the claimant is generally ineligible to receive UI benefits until he or she qualifies through subsequent employment. Under one such exception, if a claimant quits his or her job and 1) the claimant accepted work that was not suitable work under the UI law or work that the claimant could have refused, and 2) the claimant terminated the work within 30 calendar days after starting the work, the claimant remains eligible to collect UI benefits. Under the bill, this exemption applies if the claimant terminated that work within 10 weeks after starting the work.
Waiting period
Currently, a claimant must wait one week after becoming eligible to receive UI benefits before the claimant may receive benefits for a week of unemployment, except for periods during which the waiting period is suspended. The waiting period does not affect the maximum number of weeks of a claimant’s benefit eligibility.
The bill deletes the one-week waiting period, thus permitting a claimant to receive UI benefits beginning with his or her first week of eligibility.
Work search and registration
Under current law, a claimant for UI benefits is generally required to register for work and to conduct a work search for each week in order to remain eligible. Current law requires DWD to waive these requirements under certain circumstances, for example, if a claimant who is laid off from work reasonably expects to be recalled to work within 12 weeks, will start a new job within four weeks, routinely obtains work through a labor union referral, or is participating in a training or work share program. Under current law, DWD may modify the statutory waivers or establish additional waivers by rule only if doing so is required or specifically allowed by federal law.
The bill removes the waiver requirements from statute and instead allows DWD to establish waivers for the registration for work and work search requirements by rule. DWD may establish a waiver by emergency rule if the secretary of workforce development determines that the waiver is needed only on a temporary basis or that permanent rules are not warranted, and the bill allows the secretary to extend the emergency rule for up to 60 days at a time. Also, the bill specifies that the work search requirement does not apply to a claimant who has been laid off but DWD determines that the claimant has a reasonable expectation to be recalled to work.
Social security disability insurance payments
Under current law, in any week in any month that a claimant is issued a benefit under the federal Social Security Disability Insurance program (SSDI payment), that claimant is ineligible for UI benefits. The bill eliminates that prohibition and instead requires DWD to reduce a claimant’s UI benefit payments by the amount of SSDI payments. The bill requires DWD to allocate a monthly SSDI payment by allocating to each week the fraction of the payment attributable to that week.
Quits due to relocations
Under current law, unless an exception applies, if an individual quits his or her job, the individual is generally ineligible to receive UI benefits until he or she qualifies through subsequent employment.
Under one such exception, if the employee’s spouse is a member of the U.S. armed forces on active duty and is relocated, and the employee quits his or her job in order to relocate with his or her spouse, the employee remains eligible to collect UI benefits. The bill expands this exception so that it applies to an employee who quits employment in order to relocate with a spouse who is required by any employer, not just the U.S. armed forces, to relocate.
Electronic communications
Currently, with certain exceptions, each employer that has employees who are engaged in employment covered by the UI law must file quarterly contribution (tax) and employment and wage reports and make quarterly contribution payments to DWD. An employer of 25 or more employees or an employer agent that files reports on behalf of any employer must file its reports electronically. Current law also requires each employer that makes contributions for any 12-month period ending on June 30 equal to a total of at least $10,000 to make all contribution payments electronically in the following year. Finally, current law allows DWD to provide a secure means of electronic interchange between itself and employing units, claimants, and other persons that, upon request to and with prior approval by DWD, may be used for transmission or receipt of any document specified by DWD that is related to the administration of the UI law in lieu of any other means of submission or receipt.
The bill makes use of these electronic methods mandatory in all cases unless the employer or other person demonstrates good cause for being unable to use the electronic method. The bill specifies what constitutes good cause for purposes of these provisions. The bill also makes various corresponding changes to penalty provisions that apply in the case of nonuse of these required electronic methods. The bill further provides that DWD may permit the use of electronic records and electronic signatures for any document specified by DWD that is related to the administration of the UI law.
Jobs and job training
Wisconsin Fast Forward grants
Under current law, DWD awards grants under what is commonly known as the Wisconsin Fast Forward program, for various workforce training purposes. The bill adds grants for education and training in the use of artificial intelligence to the allowed uses of funds under the program and requires DWD to collaborate with DHS and DPI in administering the program. The bill also requires DWD to allocate moneys under the Wisconsin Fast Forward program as follows:
1. A total of $2,000,000 in GPR funding in fiscal year 2025–26 for green jobs training.
2. A total of $200,000 in GPR funding in each year of the 2025–27 fiscal biennium for grants to help school districts to prepare students for a future that includes artificial intelligence.
3. A total of $1,000,000 in GPR funding in each year of the 2025–27 fiscal biennium to provide grants to support costs of sponsoring teacher apprentices.
4. A total of $500,000 in GPR funding in each year of the 2025–27 fiscal biennium to support training in the health care industry.
Youth to registered apprentice grant program
The bill requires DWD to develop and administer a grant program to award grants to local youth apprenticeship consortia to encourage individuals who are enrolled in youth apprenticeship programs to continue their careers in registered apprenticeship programs. The bill limits grants to no more than $350,000 in any fiscal year.
On-the-job learning grant program
The bill requires DWD to develop and administer a grant program to award grants to employers for costs related to apprenticeship programs, specifically wages for apprentices and costs for mentoring and instruction. Eligible employers are healthcare employers under a pilot program and small or new employers that have never had an apprenticeship program or have not had an apprenticeship program in the particular trade, craft, or business for which the employer seeks the grant in the five years before applying for the grant.
Workforce innovation grant program
The bill requires DWD to establish and operate a program to provide grants to regional organizations to design and implement programs to address their region’s workforce challenges. The bill also provides that in the 2025–26 fiscal year, DWD must allocate $15,000,000 for grants for workforce development in the area of artificial intelligence and $25,000,000 for grants for health care workforce development.
Teacher apprenticeships
DWD is currently operating a teacher apprenticeship pilot program, under which an individual serving as a teacher apprentice earns an associate degree and a bachelor’s degree that satisfy requirements for a license to teach issued by DPI while the individual earns money as a teacher apprentice. The bill requires DWD to, in consultation with DPI, prescribe the conditions under which an individual may serve as a teacher apprentice and to prescribe what an individual must do to demonstrate that the individual has successfully completed a teacher apprenticeship. See Education.
Wisconsin worker advancement program
The bill requires DWD to establish and maintain the Wisconsin worker advancement program to make grants to local organizations for the organizations to provide employment and workforce services.
Discrimination
Civil actions regarding employment discrimination, unfair honesty, and unfair genetic testing
Under current fair employment law, an individual who alleges that an employer has violated employment discrimination, unfair honesty testing, or unfair genetic testing laws may file a complaint with DWD seeking action that will effectuate the purpose of the fair employment law, including reinstating the individual, providing back pay, and paying costs and attorney fees.
The bill allows DWD or an individual who is alleged or was found to have been discriminated against or subjected to unfair honesty or genetic testing to bring an action in circuit court to recover compensatory and punitive damages caused by the act of discrimination, unfair honesty testing, or unfair genetic testing, in addition to or in lieu of filing an administrative complaint. The action in circuit court must be commenced within 300 days after the alleged discrimination, unfair honesty testing, or unfair genetic testing occurred. The bill does not allow such an action for damages to be brought against a local governmental unit or against an employer that employs fewer than 15 individuals.
Under the bill, if the circuit court finds that a defendant has committed employment discrimination, unfair honesty testing, or unfair genetic testing, the circuit court may award back pay and any other relief that could have been awarded in an administrative proceeding. In addition, the circuit court must order the defendant to pay to the individual found to have been discriminated against or found to have received unfair genetic testing or unfair honesty testing compensatory and punitive damages in the amount that the circuit court finds appropriate, except that the total amount of damage awarded for future economic losses and for pain and suffering, emotional distress, mental anguish, loss of enjoyment of life, and other noneconomic losses and punitive damages is subject to the following limitations:
1. If the defendant employs 100 or fewer employees, no more than $50,000.
2. If the defendant employs more than 100 but fewer than 201 employees, no more than $100,000.
3. If the defendant employs more than 200 but fewer than 501 employees, no more than $200,000.
4. If the defendant employs more than 500 employees, no more than $300,000.
The bill requires DWD to annually revise these amounts on the basis of the change in the consumer price index in the previous year, if any positive change has occurred.
Employment discrimination based on conviction record
The bill provides that it is employment discrimination for a prospective employer to request conviction information from a job applicant before the applicant has been selected for an interview.
The bill, however, does not prohibit an employer from notifying job applicants that an individual with a particular conviction record may be disqualified by law or the employer’s policies from employment in particular positions.
Employment discrimination based on gender expression and gender identity
Current law prohibits discrimination in employment on the basis of a person’s sex or sexual orientation. The bill prohibits employers from discriminating against an employee on the basis of the employee’s gender identity or gender expression. Gender expression is defined in the bill as an individual’s actual or perceived gender-related appearance, behavior, or expression, regardless of whether these traits are stereotypically associated with the individual’s assigned sex at birth. Gender identity is defined in the bill an individual’s internal understanding of the individual’s gender, or the individual’s perceived gender identity.
