Chapter 108

108.02(26)(a) (a) “Wages” means every form of remuneration payable, directly or indirectly, for a given period, or payable within a given period if this basis is permitted or prescribed by the department, by an employing unit to an individual for personal services.

108.02(26)(b) (b) “Wages” includes:

108.02(26)(b)1. 1. Any payment in kind or other similar advantage received from an individual’s employing unit for personal services, except as provided in par. (c).

108.02(26)(b)2. 2. The value of an employee achievement award that is compensation for services.

108.02(26)(b)3. 3. The value of tips that are received while performing services which constitute employment, and that are included in a written statement furnished to an employer under 26 USC 6053 (a).

108.02(26)(b)4. 4. Any payment under a deferred compensation and salary reduction arrangement which is treated as wages under 26 USC 3306 (r).

108.02(26)(b)5. 5. Any payment made by a corporation electing to be taxed as a partnership under subchapter S of chapter 1 of the federal internal revenue code, 26 USC 1361 to 1379, to an officer, which is reasonable compensation for services performed for the corporation, or the reasonable value of services performed by an officer for such a corporation, if the officer receives no payment for the services or less than the reasonable value of the services, except:

108.02(26)(b)5.a. a. A distribution of earnings and profits which is in excess of any such payment;

108.02(26)(b)5.b. b. A loan to an officer evidenced by a promissory note signed by the officer prior to the payment of the loan proceeds and recorded in the records of such a corporation as a loan to the officer;

108.02(26)(b)5.c. c. A repayment of a loan or payment of interest on a loan made by an officer to such a corporation and recorded in the records of the corporation as a liability of the corporation;

108.02(26)(b)5.d. d. A reimbursement by such a corporation of reasonable corporate expenses incurred by an officer which is documented by a written expense voucher and recorded in the records of the corporation as corporate expenses; or

108.02(26)(b)5.e. e. A reasonable lease or rental payment to an officer who owns property which is leased or rented to such a corporation.

108.02(26)(c) (c) “Wages” does not include:

108.02(26)(c)1. 1. The amount of any payment, including any amount paid by an employer for insurance or annuities or into an account to provide for such payment, made to or on behalf of an employee or any of his or her dependents under a plan or system established by an employer which makes provision for its employees generally, or for its employees generally and their dependents, or for a class or classes of its employees, or for a class or classes of its employees and their dependents, on account of:

108.02(26)(c)1.a. a. Sickness or accident disability, except that in the case of payments made to an employee or any of his or her dependents, “wages” excludes only payments which are received under ch. 102 or under any federal law which provides for payments on account of a work-related injury or illness analogous to those provided under ch. 102 as a result of employment for an employer;

108.02(26)(c)1.b. b. Medical or hospitalization expenses in connection with sickness or accident disability; or

108.02(26)(c)1.c. c. Death.

108.02(26)(c)2. 2. Any payment for sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employer to or on behalf of an employee after the expiration of 6 months following the last month in which the employee worked for the employer.

108.02(26)(c)3. 3. Any payment made to or on behalf of an employee or his or her beneficiary under a cafeteria plan, within the meaning of 26 USC 125, if the payment would not be treated as wages without regard to that plan and if 26 USC 125 would not treat the payment as constructively received.

108.02(26)(c)4. 4. Except as provided in par. (b) 4., any payment made to, or on behalf of, an employee or his or her beneficiary:

108.02(26)(c)4.a. a. From or to a trust described in 26 USC 401 (a) which is exempt from taxation under 26 USC 501 (a) at the time of the payment unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust;

108.02(26)(c)4.b. b. Under or to an annuity plan which, at the time of the payment, is a plan described in 26 USC 403 (a);

108.02(26)(c)4.c. c. Under a simplified employee pension, as defined in 26 USC 408 (k) (1), other than any contributions described in 26 USC 408 (k) (6);

108.02(26)(c)4.d. d. Under or to an annuity contract described in 26 USC 403 (b), other than a payment for the purchase of such a contract which is made by reason of a salary reduction agreement, whether evidenced by a written instrument or otherwise;

108.02(26)(c)4.e. e. Under or to an exempt governmental deferred compensation plan, as defined in 26 USC 3121 (v) (3); or

108.02(26)(c)4.f. f. To supplement pension benefits under a plan or trust described in subd. 4. a. to e. to take into account some portion or all of the increase in the cost of living, as determined by the U.S. secretary of labor, since retirement but only if the payment is under a plan which is treated as a welfare plan under 29 USC 1002 (2) (B) (ii).

108.02(26)(c)5. 5. The payment by an employer, without deduction from the remuneration of an employee, of the tax imposed on the employee under 26 USC 3101 with respect to remuneration paid to the employee for domestic service in a private home of the employer or for agricultural labor.

108.02(26)(c)6. 6. Remuneration paid in any medium other than cash to an employee for service not in the course of the employer’s trade or business.

108.02(26)(c)7. 7. Remuneration paid to or on behalf of an employee if and to the extent that at the time of the payment it is reasonable to believe that a corresponding deduction is allowable under 26 USC 217, determined without regard to 26 USC 274 (n).

108.02(26)(c)8. 8. Any payment or series of payments by an employer to an employee or any of his or her dependents which is paid:

108.02(26)(c)8.a. a. Upon or after the termination of an employee’s employment relationship because of the employee’s death or retirement for disability; and

108.02(26)(c)8.b. b. Under a plan established by the employer which makes provision for its employees generally or a class or classes of its employees, or for such employees or class or classes of employees and their dependents, other than a payment or series of payments which would have been paid if the employee’s employment relationship had not been so terminated.

108.02(26)(c)10. 10. Any payment made or benefit furnished to or for the benefit of an employee if, at the time of the payment or furnishing, it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under 26 USC 127 or 129.

108.02(26)(c)11. 11. The value of any meals or lodging furnished by or on behalf of an employer if, at the time of the furnishing, it is reasonable to believe that the employee will be able to exclude such items from income under 26 USC 119.

108.02(26)(c)12. 12. Any payment made by an employer to a survivor or the estate of a former employee after the year in which the employee died.

108.02(26)(c)13. 13. Any benefit provided to or on behalf of an employee if at the time the benefit is provided it is reasonable to believe that the employee will be able to exclude the benefit from income under 26 USC 117 or 132.

108.02(26)(c)15. 15. Remuneration for services performed in a fishing rights-related activity of an Indian tribe by a member of that tribe for another member of that tribe or for a qualified Indian entity, as provided in 26 USC 7873.

108.02(26)(c)16. 16. Any contribution made by an employer into or payment made from a supplemental unemployment benefit plan for employees, if the contribution or payment is not considered “wages” under 26 USC 3306 (b), regardless of whether the plan is part of an employer profit-sharing plan.

108.02(26m) (26m) Waiting period. “Waiting period” means any period of time under s. 108.04 (3) for which no benefits are payable to a claimant as a condition precedent to receipt of benefits.

108.02(27) (27) Week. “Week” means calendar week, starting Sunday and ending Saturday; but, where an employee starts a working shift on a given Saturday, all of the employee’s hours and pay for that shift shall be counted in the calendar week which includes that Saturday.

108.02(28) (28) Weekly benefit rate. An employee’s “weekly benefit rate” from a given employer means the amount computed in accordance with s. 108.05.

108.02(29) (29) Working day. “Working day” has the meaning given in s. 227.01 (14).

108.02 History History: 1971 c. 53; 1971 c. 213 s. 5; 1973 c. 247; 1975 c. 223, 343; 1975 c. 373 s. 40; 1977 c. 29, 133; 1979 c. 52, 221; 1981 c. 36, 353; 1983 a. 8 ss. 4 to 12, 54; 1983 a. 168; 1983 a. 189 ss. 158 to 161, 329 (25), (28); 1983 a. 384, 477, 538; 1985 a. 17, 29, 332; 1987 a. 38 ss. 6 to 22, 134; 1987 a. 255; 1989 a. 31; 1989 a. 56 ss. 151, 259; 1989 a. 77, 303; 1991 a. 89; 1993 a. 112, 213, 373, 492; 1995 a. 27 ss. 3777, 9130 (4); 1995 a. 118, 225; 1997 a. 3, 27, 39; 1999 a. 15, 82, 83; 2001 a. 35, 103, 105; 2003 a. 197; 2005 a. 25, 86, 149, 441; 2007 a. 20 s. 9121 (6) (a); 2007 a. 59; 2009 a. 180, 287; 2011 a. 32, 123; 2013 a. 20, 36, 104, 151; 2013 a. 173 s. 33; 2015 a. 55; 2015 a. 195 s. 83; 2015 a. 258, 295, 334; 2017 a. 157; 2017 a. 365 ss. 50, 111; 2019 a. 9; 2021 a. 231; 2021 a. 238 ss. 44, 45; 2021 a. 239; s. 13.92 (2) (i); s. 35.17 correction in (15) (j) 5.

108.02 Annotation An employee can at the same time be an employer, responsible for unemployment compensation contributions. Price County Telephone Co. v. Lord, 47 Wis. 2d 704, 177 N.W.2d 904 (1970).

108.02 Annotation Under sub. (3) [now sub. (12)], the person must first be found to be an employee under sub. (3) (a) [now sub. (12) (a)]; the second step is to determine whether an exemption applies. Transport Oil, Inc. v. Cummings, 54 Wis. 2d 256, 195 N.W.2d 649 (1972).

108.02 Annotation Since CETA is a federally funded program designed to provide work to unemployed and underemployed persons, it qualifies as a work-relief or work-training program under sub. (5) (g) 1. [now sub. (15) (g) 1.], and unemployment compensation benefits were properly denied to CETA employees. Bliss v. DILHR, 101 Wis. 2d 245, 304 N.W.2d 783 (Ct. App. 1981).

108.02 Annotation Owner-operators of semitractors who leased services to a trucking company were considered employees of the trucking company. Stafford Trucking, Inc. v. DILHR, 102 Wis. 2d 256, 306 N.W.2d 79 (Ct. App. 1981).

108.02 Annotation Corporate owner-operators of trucks were both employers and employees under this section. Wisconsin Cheese Service, Inc. v. DILHR, 108 Wis. 2d 482, 322 N.W.2d 495 (Ct. App. 1982).

108.02 Annotation Truck owner-operators who leased trucks to a trucking company were not company employees. Star Line Trucking Corp. v. DILHR, 109 Wis. 2d 266, 325 N.W.2d 872 (1982).

108.02 Annotation Coverage under sub. (3) (a) [now sub. (12) (a)] is broad, almost presumptive. Princess House, Inc. v. DILHR, 111 Wis. 2d 46, 330 N.W.2d 169 (1983).

108.02 Annotation Graduate students preparing dissertations were “regularly attending classes” under sub. (5) (i) 1. [now sub. (15) (i) 1.] even though they attended no class meetings. Bachrach v. DILHR, 114 Wis. 2d 131, 336 N.W.2d 698 (Ct. App. 1983).

108.02 Annotation “Wages” includes salaries and benefits received while taking compensatory time off. DOT v. LIRC, 122 Wis. 2d 358, 361 N.W.2d 722 (Ct. App. 1984).

108.02 Annotation When a contractor, in fulfilling a contract with a principal, employs an individual for whom the contractor is subject to the compensation or reimbursement requirements of this chapter, the individual is the employee of the contractor and not of the principal. Robert Hansen Trucking, Inc. v. LIRC, 126 Wis. 2d 323, 377 N.W.2d 151 (1985).

108.02 Annotation Profit-sharing distributions are includable under the definition of “wages.” La Crosse Footwear, Inc. v. LIRC, 147 Wis. 2d 419, 434 N.W.2d 392 (Ct. App. 1988).

108.02 Annotation As the refund of dues to union stewards was not remuneration for services, it did not constitute “wages” under sub. (26) and was not assessable to the union for contribution purposes. Drivers Local No. 695 v. LIRC, 154 Wis. 2d 75, 452 N.W.2d 368 (1990).

108.02 Annotation The direct seller exclusion under sub. (15) (k) 16. is not restricted to persons who actually make sales to consumers in the home, but includes distributors who sell to dealers engaged in the sale of products for resale in the home whose compensation is directly related to the amount of sales made. National Safety Associates, Inc. v. LIRC, 199 Wis. 2d 106, 543 N.W.2d 584 (Ct. App. 1995), 95-1053.

108.02 Annotation An employment contract under sub. (22m) need not be in writing. Ashleson v. LIRC, 216 Wis. 2d 23, 573 N.W.2d 554 (Ct. App. 1997), 97-1346.

108.02 Annotation The test of whether work is localized under sub. (15) (b) and (d) focuses not on where the majority of the work is performed, but on whether the work performed outside of the state is incidental to the work performed within the state. Gilbert v. LIRC, 2008 WI App 173, 315 Wis. 2d 726, 762 N.W.2d 671, 06-2694.

108.02 Annotation The test for determining whether an individual is an employee within the meaning of sub. (12) (bm) follows a two-step analysis. The Department of Workforce Development carries the burden of proof on this question. If the department demonstrates that the individual performed services for pay, the individual is presumed to be an employee for purposes of unemployment compensation and the burden shifts to the employer to prove that the individual is exempt under sub. (12) (bm). Gilbert v. LIRC, 2008 WI App 173, 315 Wis. 2d 726, 762 N.W.2d 671, 06-2694.

108.02 Annotation For purposes of the religious purposes exemption under sub. (15) (h) 2., focusing on the stated motivations and the nonprofit organization’s activities allows a reviewing body to conduct an objective, neutral review that is highly fact-sensitive without examining religious doctrine or tenets. The first step is not demanding, as it is based on the organization’s own words and statements, including its mission statement. If the organization states that it has a religious motive, then the reviewing body must accept that assertion and move on to the next consideration, which is whether the activities of the nonprofit organization are primarily religious. Catholic Charities Bureau, Inc. v. LIRC, 2023 WI App 12, 406 Wis. 2d 586, 987 N.W.2d 778, 20-2007.

108.02 Annotation Affirmed. 2024 WI 13, 411 Wis. 2d 1, 3 N.W.3d 666, 20-2007.

108.02 Annotation Discussing the factors under sub. (12) (bm) 2. that determine whether an individual qualifies as an employee for unemployment insurance taxation purposes. In this case, individuals who performed package delivery services for the plaintiff qualified as employees because the plaintiff only satisfied its burden as to five of the nine factors. Amazon Logistics, Inc. v. LIRC, 2023 WI App 26, 407 Wis. 2d 807, 992 N.W.2d 168, 22-0013.

108.02 Annotation Under sub. (15) (h) 2., the religious purposes exemption, the reviewing body is to consider the purpose of the nonprofit organization, not the church’s purpose in operating the organization. Catholic Charities Bureau, Inc. v. LIRC, 2024 WI 13, 411 Wis. 2d 1, 3 N.W.3d 666, 20-2007.

108.02 Annotation In determining whether an organization is “operated primarily for religious purposes” within the meaning of sub. (15) (h) 2., a court must examine both the motivations and the activities of the organization. Accepting an organization’s assertions of religious motivation does not end the inquiry, as the court also must examine the organization’s activities to determine whether the activities are “primarily” religious in nature. Catholic Charities Bureau, Inc. v. LIRC, 2024 WI 13, 411 Wis. 2d 1, 3 N.W.3d 666, 20-2007.

108.02 Annotation Institutions of higher education, including VTAE [technical college] districts, are included within the unemployment compensation act by reason of 26 USC 3309 (a) and (d). 61 Atty. Gen. 18.

108.02 Annotation Strict compliance with all criteria in sub. (12m) and s. 108.065 is required before a company will qualify as an employee service company and the employer for unemployment compensation purposes. 80 Atty. Gen. 154.

108.02 Annotation Sub. (15) (k) 14. does not conflict with federal law or violate the equal protection clause of the 14th Amendment to the U.S. Constitution. Zambrano v. Reinert, 291 F.3d 964 (2002).

108.025 108.025 Coverage of certain corporate officers and limited liability company members.

108.025(1) (1) In this section, “principal officer” means:

108.025(1)(a) (a) An individual named as a principal officer in a corporation’s most recent annual report or, if that information is not current, an individual holding an office described in the corporation’s most recent annual report as a principal officer; or

108.025(1)(b) (b) An individual who is a member of a limited liability company that is treated as a corporation under this chapter as of the date of an election under this section.

108.025(2) (2) If an employer is organized as a corporation or limited liability company that is treated as a corporation under this chapter, the employer has no annual payroll for the calendar year preceding an election or has an annual payroll of less than the amount specified in s. 108.18 (9) which establishes separate solvency contribution rates for the calendar year preceding an election, and the employer files a notice of election, in the manner prescribed by the department, to exclude the service of all of its principal officers who have a direct or indirect substantial ownership interest in the corporation or limited liability company, employment does not include the service of those officers.

108.025(3) (3) An election of an employer under this section does not apply in any calendar year if the annual payroll of the employer for the preceding calendar year equaled or exceeded the amount specified in s. 108.18 (9) which establishes separate solvency contribution rates.

108.025(4) (4) An employer which files an election under this section may reelect coverage of its principal officers under this section by filing a notice of reelection with the department. An employer which reelects coverage of its principal officers is not eligible to file a notice of election of noncoverage under this section.

108.025(5) (5) To be effective for any calendar year, a notice of election or reelection must be received by the department no later than March 31 except that in the case of an employing unit which becomes an employer during a calendar year, notice of election must be received by the department no later than the date on which the initial contributions of the employer become payable under s. 108.17 (1m), and except that if the due date for a notice of election or reelection falls on a Saturday, Sunday or legal holiday under state or federal law, the due date is the next following day which is not a Saturday, Sunday or legal holiday under state or federal law. If a notice of election or reelection is mailed, it is timely if it is either postmarked by the due date or received by the department no later than 3 days after that date. An election is effective for each calendar year until the employer files a timely notice of reelection.

108.025(6) (6) A principal officer has a direct or indirect substantial ownership interest in a corporation or limited liability company that is treated as a corporation under this section if 25 percent or more of the ownership interest, however designated or evidenced, in the corporation or limited liability company is owned or controlled, directly or indirectly, by the officer.

108.025 History History: 1991 a. 89; 2003 a. 197; 2021 a. 258.

108.03 108.03 Payment of benefits.

108.03(1) (1) Benefits shall be paid to each unemployed and eligible employee from his or her employer’s account, under the conditions and in the amounts stated in, or approved by the department pursuant to, this chapter, and at such times, at such places, and in such manner as the department may from time to time approve or prescribe.

108.03(2) (2) The benefit liability of each employer’s account shall begin to accrue under s. 108.07 in the first week completed on or after the first day of that calendar year within which the employer’s contributions first began to accrue under this chapter.

108.03 History History: 1971 c. 53; 1975 c. 343; 1985 a. 17; 1987 a. 38 ss. 23, 136; 1993 a. 492; 1999 a. 83.

108.04 108.04 Eligibility for benefits.

108.04(1) (1) General disqualifications and limitations.

108.04(1)(a) (a) Except as provided in s. 108.062 (10), if an employee is with due notice called on by his or her current employing unit to report for work actually available within a given week and is unavailable for, or unable to perform:

108.04(1)(a)1. 1. Sixteen or less hours of the work available for the week, the employee’s eligibility for benefits for that week shall be reduced under par. (bm).

108.04(1)(a)2. 2. More than 16 hours of the work available for the week, the employee is ineligible for benefits for that week.

108.04(1)(b) (b) Except as provided in s. 108.062 (10), if an employee is absent from work for 16 hours or less in the first week of his or her leave of absence or in the week in which his or her employment is suspended or terminated due to the employee’s unavailability for work with the employer or inability to perform suitable work otherwise available with the employer, the employee’s eligibility for benefits for that week shall be determined under par. (bm).

108.04(1)(bm) (bm) For purposes of pars. (a) 1. and (b), the department shall treat the amount that the employee would have earned as wages for a given week in available work as wages earned by the employee and shall apply the method specified in s. 108.05 (3) (a) to compute the benefits payable to the employee. The department shall estimate wages that an employee would have earned if it is not possible to compute the exact amount of wages that would have been earned by the employee.

108.04(1)(f) (f) If an employee is required by law to have a license issued by a governmental agency to perform his or her customary work for an employer, and the employee’s employment is suspended or terminated because the employee’s license has been suspended, revoked or not renewed due to the employee’s fault, the employee is not eligible to receive benefits until 5 weeks have elapsed since the end of the week in which the suspension or termination occurs or until the license is reinstated or renewed, whichever occurs first. The wages paid by the employer with which an employee’s employment is suspended or terminated shall be excluded from the employee’s base period wages under s. 108.06 (1) for purposes of benefit entitlement while the suspension, revocation or nonrenewal of the license is in effect. This paragraph does not preclude an employee from establishing a benefit year using the wages excluded under this paragraph if the employee qualifies to establish a benefit year under s. 108.06 (2) (a). The department shall charge to the fund’s balancing account any benefits paid during a benefit year otherwise chargeable to the account of an employer that is subject to the contribution requirements of ss. 108.17 and 108.18 from which base period wages are excluded under this paragraph if an employee qualifies to receive benefits for any week in that benefit year using wages that were excluded under this paragraph.