ORDER OF THE WISCONSIN
DEPARTMENT OF WORKFORCE DEVELOPMENT
EMERGENCY RULE
The Wisconsin Department of Workforce Development adopts the following emergency rule to amend DWD 102.01 and to create DWD 102.04, relating to employer contribution rates for 2022.
The Governor approved the scope statement for this rule, SS 046-21, on May 14, 2021. The scope statement was published in register No. 785A3, on May 17, 2021. The notice of public hearing and comment period on the scope statement was published on May 24, 2021 in register No. 785B. The public hearing on the scope statement was held on May 27, 2021. The scope statement was approved by the Department on May 28, 2021. This rule was approved by the Governor on June 10, 2021. Analysis Prepared by the Department of Workforce Development
Finding of Emergency
By Executive Order 72, the Governor declared a public health emergency to protect the health and well-being of the state’s residents and directed state agencies to assist as appropriate in the State’s ongoing response to the public health emergency. On March 13, 2020, the President declared a national emergency concerning the COVID-19 pandemic. Due to the pandemic, many businesses temporarily or permanently closed, resulting in significant business income reduction and layoffs.
Under 2019 Wisconsin Act 185 and 2021 Wisconsin Act 4, which created and then amended s. 108.07 (5) (bm), the Department of Workforce Development is directed to charge unemployment benefits for initial claims that are related to the public health emergency declared by Executive Order 72 to the balancing account of the Trust Fund for contribution employers. This treatment of claims charging applies to weeks of benefits payable beginning the week of March 15, 2020 through March 13, 2021. The Department's antiquated computer systems are ill-equipped to handle the changes in charges from the employers’ accounts to the balancing account. Each weekly claim to be charged to the balancing account under s. 108.07 (5) (bm), Stats., requires the Department to change the benefit charges from the employer’s account to the balancing account of the Trust Fund after any federal funds have been appropriately applied. Given the high volume of claims filed during the pandemic, the work to complete the charging changes will not be completed by June 30, 2021. Under sections 108.02(8), 108.02(22), and 108.18(4), Stats., “an employer’s contribution rate on the employer’s payroll for a given calendar year shall be based on the reserve percentage of the employer’s account as of the applicable computation date,” s. 108.18(4), Stats., which is June 30 of each year. Section 108.02(22), Stats., requires the Department to determine the status of an employer's account when setting the reserve percentage for contribution purposes as of the computation date. Because the Department is not able to complete the benefit charging changes required by 2019 Wisconsin Act 185 and 2021 Wisconsin Act 4 by June 30, employers’ contribution rates for 2022 may be based, in part, on benefit charges that should have been charged to the balancing account instead of the employers’ accounts. If contribution rates are set before recharging is completed, the result for most employers subject to contribution financing would be higher contribution rates for 2022 than they should be. An emergency rule is needed to prevent employers from being subject to 2022 rates that are higher than they should be under 2019 Wisconsin Act 185 and 2021 Wisconsin Act 4. Without a rule, employers may not see the benefit of charging relief under Acts 185 and 4 until rates are set for 2023 after recharging is completed. The Department does not contemplate promulgating a permanent rule because the recharging will be accomplished to set appropriate rates that only apply for a limited time. This emergency rule will meet the policy goals of 2019 Wisconsin Act 185 and 2021 Wisconsin Act 4 to address the public health emergency and protect the welfare of the economy through charging relief for contribution employers. Statutes Interpreted
Statutory Authority
Explanation of Statutory Authority
The Department has specific and general authority to establish rules interpreting and clarifying provisions of ch. 108, Stats., unemployment insurance and reserves, and general authority for promulgating rules with respect to ch. 108, Stats., under s. 108.14 (2), Stats. Related Statutes or Rules
The Department previously promulgated emergency rule EmR2018, relating to employer contribution rates for 2021. Plain Language Analysis
This rule provides that the Department, in calculating an employer’s net reserve as of the June 30, 2021 computation date, shall disregard all benefit charges and benefit adjustments for the period of March 15, 2020 through March 13, 2021.
The Department will, in effect, assume that all benefit charges and adjustments were related to the public health emergency declared by Executive Order 72. This assumption applies only for the purposes of setting the contribution rates for 2022. This rule will ensure that employers’ contribution rates for 2022 are calculated based on reserve fund balances as of June 30, 2021 without taking charges related to the public health emergency into account so that the policy goals of 2019 Wisconsin Act 185 and 2021 Wisconsin Act 4 are met. This rule will only affect calculation of contribution rates for 2022. Contribution rates for 2023 will be calculated in 2022 after all recharging is complete. Summary of, and comparison with, existing or proposed federal statutes and regulations
Federal law requires that state laws conform to and comply with federal requirements. 20 CFR 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 USC 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.
