The 2013-2015 biennial budget bill, recently enacted as 2013 Wisconsin Act 20, included many significant changes to Wisconsin’s unemployment insurance (“UI”) law. Although some of these changes took effect immediately after the effective date of the Act 20 (such as increasing work search requirements from 2 to 4 contacts per week) most will first apply to unemployment determinations issued or appealed on or after Jan. 5, 2014. Several of the changes of most interest to employers are described below.
“Substantial Fault” and “Misconduct” Disqualification Standards
The legislature adopted a “substantial fault” standard which expands the situations in which employees can be disqualified from eligibility for UI benefits. Under the new law (which replaces the little used and cumbersome provisions disqualifying employees from benefits if they are terminated for “excessive tardiness” or “excessive absences”) employees can be disqualified from eligibility if they are terminated for “substantial fault” even if their actions do not rise to the level of “misconduct.” The Act provides:
Substantial fault includes those acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the employee’s employer but does not include any of the following:
1. One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction.
2. One or more inadvertent errors made by the employee.
3. Any failure of the employee to perform work because of insufficient skill, ability, or equipment.
The Act also revised the “misconduct” standard for benefit disqualification:
For purposes of this subsection, “misconduct” means one or more actions or conduct evincing such willful or wanton disregard of an employer’s interests as is found in deliberate violations or disregard of standards of behavior which an employer has a right to expect of his or her employees, or in carelessness or negligence of such degree or recurrence as to manifest culpability, wrongful intent, or evil design of equal severity to such disregard, or to show an intentional and substantial disregard of an employer’s interests, or of an employee’s duties and obligations to his or her employer. In addition, “misconduct” includes:
(a) A violation by an employee of an employer’s reasonable written policy concerning the use of alcohol beverages, or use of a controlled substance or a controlled substance analog, if the employee:
1. Had knowledge of the alcohol beverage or controlled substance policy; and
2. Admitted to the use of alcohol beverages or a controlled substance or controlled substance analog or refused to take a test or tested positive for the use of alcohol beverages or a controlled substance or controlled substance analog in a test used by the employer in accordance with a testing methodology approved by the department.
(b) Theft of an employer’s property or services with intent to deprive the employer of the property or services permanently, theft of currency of any value, felonious conduct connected with an employee’s employment with his or her employer, or intentional or negligent conduct by an employee that causes substantial damage to his or her employer’s property.
(c) Conviction of an employee of a crime or other offense subject to civil forfeiture, while on or off duty, if the conviction makes it impossible for the employee to perform the duties that the employee performs for his or her employer.
(d) One or more threats or acts of harassment, assault, or other physical violence instigated by an employee at the workplace of his or her employer.
(e) Absenteeism by an employee on more than 2 occasions within the 120-day period before the date of the employee’s termination, unless otherwise specified by his or her employer in an employment manual of which the employee has acknowledged receipt with his or her signature, or excessive tardiness by an employee in violation of a policy of the employer that has been communicated to the employee, if the employee does not provide to his or her employer both notice and one or more valid reasons for the absenteeism or tardiness.
(f) Unless directed by an employee’s employer, falsifying business records of the employer.
(g) Unless directed by the employer, a willful and deliberate violation of a written and uniformly applied standard or regulation of the federal government or a state or tribal government by an employee of an employer that is licensed or certified by a governmental agency, which standard or regulation has been communicated by the employer to the employee and which violation would cause the employer to be sanctioned or to have its license or certification suspended by the agency.
“Voluntary Quit” Exceptions
Generally, an employee is not entitled to receive unemployment benefits if they voluntarily quit their job. A “quit exception” makes individuals eligible for UI even if they voluntarily leave their job. Act 20 reduces the number of “quit exceptions” from eighteen to eight. The exceptions identified below are those that will remain applicable after January 5, 2014:
(am) The suspension or termination of the claimant’s work was in lieu of a suspension or termination by the employer of another employee’s work.
(b) The employee terminated his or her work with good cause attributable to the employing unit. In this paragraph, “good cause” includes, but is not limited to, a request, suggestion or directive by the employing unit that the employee violate federal or Wisconsin law, or sexual harassment, as defined in s. 111.32(13), by an employing unit or employing unit’s agent or a co-worker, of which the employer knew or should have known but failed to take timely and appropriate corrective action.
(c) The employee terminated his or her work but had no reasonable alternative because the employee was unable to do his or her work, or that the employee terminated his or her work because of the verified illness or disability of a member of his or her immediate family and the verified illness or disability reasonably necessitates the care of the family member for a period of time that is longer than the employer is willing to grant leave; but if the department determines that the employee is unable to work or unavailable for work, the employee is ineligible to receive benefits while such inability or unavailability continues.
(cm) The employee is hired to work a particular shift and the department determines that the employee terminated his or her work as the result of a requirement by his or her employing unit to transfer his or her working hours to a shift occurring at a time that would result in a lack of child care for his or her minor children, provided that the employee is able to work and available for full-time work during the same shift that the employee worked in the employee’s most recent work with that employing unit.
(e) An employee that accepts work which the employee could have failed to accept with “good cause” under Wis. Stat. §108.04(7)(b) and terminated such work with the same good cause may only terminate such work within 30 days after starting the work in order to be entitled to UI benefits (instead of the 10 week period formerly provided for in this section);
(L) An employee who quits work to accept certain types of employment or other work covered by UI laws of any state or the federal government will no longer be required to have earned wages in the subsequent work, repealing the former 4-week earning requirement;
(q) The employee, while serving as a member of the U.S. armed forces, was engaged concurrently in other work and terminated that work as a result of the employee’s honorable discharge or discharge under honorable conditions from active duty as a member of the U.S. armed forces for a reason that would qualify the employee to receive unemployment compensation under 5 USC 8521.
(t) The employee quits work because his or her spouse changes their place of employment such that a commute is impractical and the employee quit to follow the spouse will be permitted to collect UI benefits where the employee’s spouse is a member of the U.S. armed forces on active duty, the employee’s spouse was required by the U.S. armed forces to relocate making it is impractical for the employee to commute, and the employee terminated his or her work to accompany the spouse to the new work station.
Act 20 also requires that the department create and periodically update a handbook for the purpose of providing employers with:
1. Information about the function and purpose of unemployment insurance under this chapter.
2. A description of the rights and responsibilities of employers under this chapter, including the rights and responsibilities associated with hearings to determine whether claimants are eligible for benefits under this chapter.
3. A description of the circumstances under which workers are generally eligible and ineligible for benefits under this chapter.
4. Disclaimers explaining that the contents of the handbook may not be relied upon as legally enforceable and that adherence to the content does not guarantee a particular result for a decision under this chapter.
5. A line to allow an individual employed by an employer to sign to acknowledge that the individual is aware of the contents of the handbook.
Affidavits Admissible as Evidence at Hearing
Act 20 further requires that the department develop and make available to employers and claimants a “standard affidavit form” that may be used by parties as admissible evidence in a hearing under this chapter “if the authentication is sufficient and the information set forth by the affiant is admissible.” However a party’s use of such an affidavit will not “eliminate the right of an opposing party to cross examine the affiant concerning the facts asserted in the affidavit.
Act 20 makes a number of other important changes, including changes to the contribution rates and default provisions in the UI statute. If you need additional information regarding the details of the UI changes, feel free to contact Dave McClurg at (414) 223-6956.