EmR2044 Rule Text

This rule also determines the treatment of employers in a claimant’s base period who are not the most recent employer of a claimant whose initial claim is related to the public health emergency declared on March 12, 2020, by Executive Order 72. The Department will apply the employer charging provisions of 2019 Wisconsin Act 185 to all base period employers for the claim.

Summary of, and comparison with, existing or proposed federal statutes and regulations

Federal law requires that state unemployment compensation laws conform to and comply with federal requirements. 20 C.F.R. § 601.5.

Under the federal Families First Coronavirus Response Act, Public Law 116-127, specifically Division D, the Emergency Unemployment Insurance Stabilization and Access Act of 2020 (EUISAA), a state may receive a share of $500 million of federal funding for administering the state’s unemployment insurance program if the “State has demonstrated steps it has taken or will take to … non-charg[e] employers directly impacted by COVID–19 due to an illness in the workplace or direction from a public health official to isolate or quarantine workers.” 42 U.S.C. § 1103 (h) (3) (B). Wisconsin’s share of the $500 million is about $9.457 million.

Comparison with rules in adjacent states

Illinois does not charge employers for unemployment benefits “for a week of unemployment that begins on or after March 15, 2020, and before December 31, 2020, and is directly or indirectly attributable to COVID-19….” 820 ILCS 405/1502.4(A).

By Executive Order 2020-76, Michigan charges benefits to the unemployment insurance non-chargeable account, unless the employer was determined to have misclassified workers.

Iowa is currently not charging unemployment benefits related to COVID-19 to employer accounts.

By Emergency Executive Order 20-05, Minnesota will “not use unemployment benefits paid as

a result of the COVID-19 pandemic in computing the future unemployment tax rate of a taxpaying employer.”

Summary of factual data and analytical methodologies

The Department reviewed Wisconsin statutes, administrative rules, and recent changes to federal law to determine the information that employers must submit to receive charging relief. The Department determined that February 19, 2021 is the appropriate deadline for employers to submit the documentation because that date is more than a month after the last day that the Department would notify employers that a timely initial claim that qualifies for charging relief was filed. Employers may still request relief for late initial claims because the deadline is 30 days after the Department notifies the employer of the initial claim. The recharging of claims under section 108.07 (5) (bm), Stats., will be manual and is expected to take many months to complete. The Department must complete the recharging of claims by June 30, 2021 so that employer contribution rates will be correctly set for 2022. The February 19, 2021 deadline for employers to submit the information is necessary to ensure that all required work to change the charging of the claims is completed by June 30, 2021.

In particular, the Department reviewed Wisconsin statutes and the possible effects of charging benefits under section 108.07 (5) (bm), Stats., to determine the treatment of employers in a claimant’s base period who are not the most recent employer of a claimant whose initial claim is related to the public health emergency declared on March 12, 2020, by Executive Order 72. The Department determined that the employer non-charging provisions of 2019 Wisconsin Act 185 apply to all employers in a claimant’s base period because section 108.07 (5) (bm) does not permit only some employers in a base period to receive charging relief.

Analysis and supporting documents used to determine effect on small business or in preparation of an economic impact analysis

Under 2019 Wisconsin Act 185, s. 50, 100% of the unemployment insurance benefits for initial claims related to the public health emergency declared on March 12, 2020 by Executive Order 72 will be charged to the balancing account of the Trust Fund for employers subject to contribution financing. Fifty percent of the unemployment insurance benefits for initial claims related to the public health emergency declared on March 12, 2020 by Executive Order 72 will be charged to the interest and penalty appropriation for employers subject to reimbursement financing; the other 50% will be paid by the federal government. The charging relief for employers under state law is effective for state unemployment insurance benefits paid for the period of March 15, 2020 through December 26, 2020. However, charges for the first week of unemployment and for benefits paid under work share plans will be charged to the federal government during that period.

Section 108.04 (2) (d), which was created by Act 185, requires claimants and employers to indicate whether a claim for regular benefits is related to the public health emergency declared on March 12, 2020, by Executive Order 72. This is necessary for the Department to properly apply section 108.07 (5) (bm), Stats., which, as described above, provides for the charging of certain benefits to the balancing account or interest and penalty appropriation. Further, under section 108.07 (5) (bm) 2. b., Stats., employers will not receive relief from benefit charges unless they timely and adequately provide the information necessary for the Department to determine how to charge the claim. Because the claim charging provisions of section 108.07 (5) (bm), Stats., will involve manual processes, the Department needs enough time to complete the work before the June 30, 2021 computation date, which will determine contribution rates for 2022.

Fiscal Estimate and Economic Impact Analysis

The Fiscal Estimate and Economic Impact Analysis is attached.

Effect on small business

This emergency rule is expected to have a positive economic impact on employers subject to contribution financing, which may include small businesses, if those employers are required to submit information to the Department to request charging relief, do so by the deadline set by this emergency rule, and receive charging relief as a result.

Agency contact person

Questions related to this rule may be directed to:

Janell Knutson, Director, Bureau of Legal Affairs

Division of Unemployment Insurance

Department of Workforce Development

P.O. Box 8942

Madison, WI 53708

Telephone: [phone]

E-Mail: [e-mail]

Place where comments are to be submitted and deadline for submission

Mark Kunkel, Rules and Records Coordinator

Department of Workforce Development

P.O. Box 7946

Madison, WI 53707

E-Mail: [e-mail]

Comments will be accepted until a date to be determined.

  Section 1. DWD 123.01 is amended to read:

  DWD 123.01 Purpose. Pursuant to ss. 108.04 (13), 108.09 (1), and 108.14 (2), Stats., in order to determine benefit claims, the department requires employers to provide information about claimants' employment separations, dates of work, wages and other payments, and other issues that may be disqualifying. This chapter specifies the benefit reports that must be filed by employers and the filing requirements for those reports. This chapter also interprets ss. 108.04 (2) (d) and 108.07 (5) (bm), Stats., consistently with 42 USC 1103 (h) (3) (B) for determining the information that employers must submit to request charging relief for initial claims filed while Executive Order 72 was in effect and after it expired, the deadline by which employers must submit the information to the department, and the treatment of employers in a claimant’s base period who are not the most recent employer of a claimant whose initial claim is related to the public health emergency declared on March 12, 2020, by Executive Order 72.

  Section 2. DWD 123.04 is created to read:

  DWD 123.04 Requests for Charging Relief. (1) Under s. 108.07 (5) (bm), Stats., the department shall presume that an initial claim for benefit years beginning on or after March 15, 2020 through May 16, 2020 relates to the public health emergency declared on March 12, 2020, by Executive Order 72 unless the claimant’s most recent separation from employment is due to a labor dispute, quit, discharge for misconduct, or discharge for substantial fault. An employer is not required to submit a request for charging relief under s. 108.07 (5) (bm), Stats. for initial claims described in this subsection.

  (2) An employer may submit a request for charging relief under s. 108.07 (5) (bm), Stats., to the department if any of the following apply:

  (a) The employer paid base period wages to a claimant whose most recent separation from employment is due to a labor dispute, quit, discharge for misconduct, or discharge for substantial fault, and whose initial claim is for benefit years beginning on or after March 15, 2020 through May 16, 2020.

  (b) The claimant’s initial claim is for benefit years beginning on or after May 17, 2020 through December 26, 2020.

  (3) An employer may receive charging relief under s. 108.07 (5) (bm), Stats., for benefits for initial claims described in sub. (2) if it provides all information that the department requires on a form that the department specifies.

  Note:  The required department form for requesting charging relief is UCB-18823-E, available online at https://dwd.wisconsin.gov/uitax/relief-of-charging.htm.

  (4) An employer seeking charging relief under s. 108.07 (5) (bm), Stats., for benefits for initial claims described in sub. (2) may receive charging relief if it certifies that any of the following circumstances apply to the initial claim:

  (a) The employer’s business/operations reduced, suspended, or ceased after experiencing a significant reduction of income due to a Safer at Home order or a government-issued health order that restricts business operations.

  (b) The employer’s business/operations reduced, suspended, or ceased due to other businesses (including suppliers) having reduced, suspended, or ceased operations.

  (c) The federal Paycheck Protection Program loan amount was used to pay employees, but the business did not yet reopen.

  (d) The employer provides other information showing that the initial claim relates to the public health emergency declared on March 12, 2020 by Executive Order 72.

  (5) Under s. 108.04 (2) (d), Stats., an employer that is required to submit a request for that relief under this section in order to receive relief under s. 108.07 (5) (bm), Stats., must submit the request for relief so that the department receives it by latter of February 19, 2021 or 30 days after the department sent a notification to the employer of an initial claim for benefit years beginning on or after March 15, 2020 through December 26, 2020.

  (6) If the department determines that an initial claim relates to the public health emergency declared on March 12, 2020, by Executive Order 72 and that s. 108.07 (5) (bm) 1., Stats., applies to the claim, the department shall apply the provisions of s. 108.07 (5) (bm) 3., Stats., to all the employers that paid base period wages to the claimant for that claim.

  Section 3. Effective date. This rule shall take effect on December 7, 2020, or upon publication in the official state newspaper as provided in s. 227.24 (1) (c), Stats., whichever is later.

  Dated this ___ day of November, 2020.

  WISCONSIN DEPARTMENT OF WORKFORCE DEVELOPMENT

By:   __________________________________________________________

  Robert Cherry, Deputy Secretary