STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


MICHAEL D WICKMAN, Employe

NEW BERLIN GRADING INC, Employer

UNEMPLOYMENT COMPENSATION DECISION
Hearing No. 95604172WK


On June 3, 1995, the Department of Industry, Labor and Human Relations issued an initial determination which held that the employe received sick pay from his union during the second quarter of 1994 which could not be used for the purpose of establishing base period wages. As a result, the employe was unable to establish a benefit year. The initial determination further held that an overpayment existed which the employe was required to repay. The employe filed a timely appeal of the initial determination and a hearing was held before an administrative law judge. On August 7, 1995, the administrative law judge issued a decision which affirmed the initial determination in its entirety. The employe filed a timely petition for commission review of the adverse appeal tribunal decision.

On November 8, 1995, the commission ordered that additional testimony be taken before an administrative law judge, acting as a deputy for the commission, with respect to the question of whether the employer failed to provide the department with correct and complete information about the employe's benefit claim. The employe and employer were provided written notification that such hearing would be held on December 5, 1995. The employer, however, did not appear at the hearing.

Based on the applicable law, records and evidence in this case, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employe's last day of work for the employer was August 2, 1993. He initiated a claim for benefits on November 30, 1994 (week 49).

On or about December 2, 1994, the department sent the employer a UCB-701 Computation of Unemployment Compensation Benefits form. The UCB-701 lists the employes who have established claims along with their potential benefit entitlement. The form specifically shows each employe's quarterly gross wages based upon the quarterly wage reports submitted by the employer. The Handbook for Employers instructs all employers to review the UCB-701 when it is received and to advise the local office if there is any error in the wages shown or if the employer wants to raise an eligibility issue. See Handbook for Employers, page 32. The employer did not contact the department after receiving the UCB-701.

The employe's base period consists of the third quarter of 1993 through the second quarter of 1994. Information provided to the department indicated that the employe earned wages from the employer in the third quarter of 1993 and first quarter of 1994. Based upon these reported wages, the employe received benefits in weeks 49 of 1994 through week 16 of 1995 in the total amount of $5,507.00.

On May 9, 1995 (week 19), the employer notified the department that the employe's first quarter 1994 earnings were not wages, but were actually sick pay paid by the employe's union. As a result of the employer's notification, the department investigated the issue and concluded that the employe was unable to establish a benefit year and that the benefits which he already received were paid in error.

The initial issue to be decided is whether the employe was able to establish a benefit year within the meaning of section 108.04 (4), Stats.

In order to establish a benefit year a claimant must have base period wages equal to at least 7 times his weekly benefit rate outside of the quarter in which the claimant has his highest base period wages. Section 108.04 (4)(a), Stats. The employe's base period consists of the third quarter of 1993 through the second quarter of 1994. The employe earned wages from the employer in the third quarter of 1993. Thereafter he received sick pay from his union, but earned no wages.

Section 108.02 (4m), Stats., provides in relevant part:

108.02 Definitions. (4m) BASE PERIOD WAGES. "Base period wages" means: (a) All payments for wage-earning service made to an employe during his or her base period as a result of employment for an employer;

(b) All sick pay which is paid directly by an employer to an employe at the employe's usual rate of pay during his or her base period as a result of employment for an employer;

It is undisputed that the employe's sick pay was paid by his union rather than by the employer and, further, that it was not paid at the employe's usual rate of pay. Consequently, the employe's sick pay may not be considered part of his base period wages under section 108.02 (4m)(b), Stats. Because without the union sick pay the employe had no wages outside of the third quarter of 1993 and, since section 108.04 (4), Stats. requires that base period wages be earned in more than one quarter, the employe was unable to establish a benefit year.

The employe was paid benefits in weeks 49 of 1994 through 16 of 1995 in the amount of $5,507.00. However, because the employe could not establish a benefit year, those benefits were paid in error. Therefore, a second issue presented in this case is whether an overpayment should be established.

While, under normal circumstances, an individual is required to reimburse the Unemployment Reserve Fund for benefits which are erroneously paid, section 108.04 (13) of the statutes sets out specific departures from this general rule. Section 108.04 (13) provides in pertinent part:

Section 108.04 Eligibility for benefits. (13) NOTIFICATION AS TO INELIGIBILITY. (c) If an employer, after notice of a benefit claim, fails to file an objection to the claim under s. 108.09 (1), any benefits allowable under any resulting benefit computation shall, unless the department applies a provision of this chapter to disqualify the claimant, be promptly paid. Except as otherwise provided in this paragraph, any eligibility question in objection to the claim raised by the employer after benefit payments to the claimant are commenced does not affect benefits paid prior to the end of the week in which a determination is issued as to the eligibility question unless the benefits are erroneously paid without fault on the part of the employer. If benefits are erroneously paid because the employer and employe are at fault, the department shall charge the employer for benefits and proceed to create an overpayment under s. 108.22(a). . . .

(f) If benefits are erroneously paid because the employer fails to file a report required by this chapter, fails to provide correct and complete information on the report, fails to object to the benefit claim under s. 108.09(1) or aids and abets the claimant in an act of concealment as provided in sub. (11), the employer is at fault. If benefits are erroneously paid because an employe commits an act of concealment as provided in sub. (11) or fails to provide correct and complete information to the department, the employe is at fault.

Section 108.09 of the statutes, which is referenced above, provides in relevant part:

Section 108.09. Settlement of benefit claims. (1) FILING. Claims for benefits shall be filed pursuant to department rules. Each employer that is notified of a benefit claim shall promptly inform the department in writing as to any eligibility question in objection to such claim together with the reasons for the objection. The department may also obtain information from the employer concerning the employe's eligibility, employment or wages.

The department characterizes the situation in which an employer is tardy in raising an eligibility issue as a "late denial." Benefits Manual, Vol. 3, Part VII, Chapter 14, Page 6, August 1994. In keeping with the above-cited statute, in the case of a late denial no overpayment is created and the benefits erroneously paid as a result thereof remain charged to the employer's account. Manual, at 14-15. The same result occurs where an employer fails to submit an accurate quarterly wage report to the department. Manual, at 7.

The reason the employe received benefits in this case was not due to his fault, as there is no reason to believe that he provided other than complete and accurate information to the department. Rather, benefits were paid to the employe because the employer failed to provide the department with an accurate statement of quarterly wages for the employe and/or failed to notify the department that the employe's quarterly gross wages as reported in the UCB-701 were incorrect. The commission remanded this matter to give the employer an opportunity to explain its failure to provide the department with an accurate statement of the employe's quarterly wages or to respond to the UCB-701 prior to May 9, 1995, but the employer opted not to appear at the hearing. Lacking any explanation for the employer's actions, the commission concludes that the employer's decision to wait until after the employe had received 21 weeks of benefits before notifying the department of the eligibility issue amounted to a late denial and constituted "fault" on the part of the employer.

The commission therefore finds that, as of week 49 of 1994, when the employe initiated his benefit claim, he was unable to establish a benefit year within the meaning of section 108.04 (4), Stats.

The commission further finds that the employe was paid benefits in the amount of $5,507.00 from week 49 of 1994 through week 16 of 1995, for which he was not eligible and that, pursuant to section 108.04(13)(c), Stats., these benefits will remain charged to the employer's account. However, the benefits paid to the employe prior to the end of the week in which the initial determination was issued (week 22 of 1995) are not affected by the determination that the employe could not establish a benefit year, pursuant to section 108.04(13)(c), Stats. Consequently, no overpayment may be assessed.

DECISION

The decision of the administrative law judge is affirmed in part and reversed in part. Accordingly, as of week 49 of 1994 the employe is not eligible to start a benefit year. However, the employe is not required to repay the sum of $5,507.00 to the Unemployment Reserve Fund. The overpaid benefits will remain charged to the employer's account.

Dated and mailed: January 19, 1996
wickman.rev : 164 : 1  BR 319.1

Pamela I. Anderson, Chairman

Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

NOTE: The commission's partial reversal of the appeal tribunal decision did not involve an assessment of the credibility of the witnesses in this case, but is as a matter of law. Consequently, no credibility conference with the administrative law judge was required.


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