LYNN M STALLMAN, Employee

STAY N PLAY DAYCARE & PRESCHOOL, Employer

An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

The employee worked a little over two years as a preschool teacher for the employer, a child and daycare provider. Her last day of work was December 27, 2001 (week 52), as of when she voluntarily terminated her employment. She had given notice of quitting on or about December 10, 2001 (week 50).

The issue to be decided in this case is whether the employee's quitting was for any reason which would allow the immediate payment of unemployment benefits.

The employee had two or three payroll checks from the employer bounce prior to November of 2001. The employer made those checks good and paid for the overdraft charges the employee had because of the checks not being good.

The employee was paid every two weeks. The usual payday was Tuesday. During the week of November 12, 2001 (week 46), there was a federal holiday on Monday. The employer receives W-2 money and the federal holiday affected the receipt of that money. The employer stated that nothing was processed until Tuesday, or in this specific instance, November 13, 2001, or payday. Workers were issued paychecks on Tuesday, November 13, 2001 (week 46) that were dated November 14, 2001 (week 46), and were instructed not to deposit them until November 14. The employee deposited her check into her own bank account on November 13. The employee ended up having a problem with the check and had numerous overdraft charges. When she became aware of the check she spoke to the employer's owner and director. The employee also asked about the overdraft charges, and the director told her to let her know the amount of the charges. The employee was written another check for the amount of her paycheck. When the director was made aware of the amount of the overdraft charges, she also became aware that the employee had deposited the check on November 13. The director then considered that it was the employee's fault there was a problem with the check and did not pay the overdraft charges.

It was the employee's position that her quitting was with good cause attributable to the employer because of the problems with her paychecks. The commission agrees.

The commission has long held that a pattern by an employer of issuing checks without sufficient funds to cover those checks amounts to good cause attributable to the employer for quitting, within the meaning of Wis. Stat. § 108.04(7)(b). See Randal L. Arndt v. K & D Transportation Services Inc. (LIRC October 5, 2000); Bonnie L. Gaworski v. William H. Myers (LIRC February 17, 1999); Harycki v. Wiedmeyer Service Center, Inc. (LIRC August 26, 1991). The commission notes that in the present case, as in Arndt, the employee had problems with a paycheck issued after she quit. In the instant case, the employee was to be paid on December 25, 2001, but got the check on December 27, 2001, instead. The employee made repeated calls to the employer's bank to see if there was money in the account to cover the payroll check, but there was not. The employee called a few times on December 27, 28, 29 and into January. On January 4, 2002, the employee had a heart attack, and thereafter her husband deposited the employee's paycheck. Ultimately the check did clear. However, the employee was never given her final paycheck that was to have been paid on January 8, 2002. In Arndt, the commission noted that even though the fourth bounced check occurred after the employee quit, it still supported a pattern of the employer issuing checks with insufficient funds.

The ALJ based her decision on the fact that the employee cashed her check on her regular payday, the day she had been given the check. The ALJ noted specifically that the employee had been told to hold the check for one day before cashing it.

The commission agrees with the general principle that a one-day delay in payday, with an explanation, does not amount to good cause attributable to the employer for quitting. However, the commission believes that the one-day delay in payday, in combination with the series of bounced checks, did give the employee good cause attributable to the employer for quitting. As noted by the ALJ, a worker can reasonably expect to be paid in a timely manner.

Further, it is not clear from the exhibits that the check would have been good even if the employee had waited to cash it. (Exhibit 3 is a photocopy of the front and back of the paycheck. The back of the check bears a routing mark from the employee's bank (Bremer Bank of Menomonie, Wisconsin) on November 13, 2001, and again on November 27, 2001. The check bears a November 15, 2002 mark from a large regional bank (Firstar.) The drawee bank on which the employer's check was written is a third bank (S & C Bank of Stanley or Chippewa, Wisconsin.) It is thus very likely that the check was not actually presented to the employer's bank until November 14 or thereafter. The check should have been good on that date, according to the employer's witness.

The amount of the employee's payroll check was $520.50 and she incurred overdraft charges of $276. Further, it is possible that some merchants the employee wrote checks to might report the employee to a credit bureau. Finally, it seems likely that the employer was aware that the check might bounce, because when the employee mentioned that her check bounced, the employer originally offered to pay the employee's bank fees. It seems likely that, if the employer indeed had sufficient funds to pay all its checks, it would have expressed some surprise that the check bounced, and would have suggested that the matter be looked into or the bank be questioned. The fact that the employer immediately offered to pay the charge does suggest that it was aware that the check might not be good. At any rate, the commission believes that given the series of bounced checks and the one-day delay in payday, the employee's quitting was with good cause attributable to the employer.

The commission therefore finds that, in week 52 of 2001, the employee voluntarily terminated her work with good cause attributable to the employer, within the meaning of Wis. Stat. § 108.04(7)(b).

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits if she is otherwise qualified. There is no overpayment of benefits.

Dated and mailed August 2, 2002
stallly . urr : 145 : 2   VL 1005.01 VL 1059.07

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

The commission did not discuss witness credibility and demeanor with the ALJ who held the hearing. The commission did not disagree with the facts found by the ALJ, and in fact the parties agreed about all the most pertinent facts. The parties agreed that the employee had problems with paychecks bouncing in the past, and that she was given a check on payday, November 13, but told not to cash the check until the next day. The parties also agree that the paycheck bounced and that the employee incurred significant charges as a result. The commission reverses the ALJ's decision because it reaches a different legal conclusion based on the facts found by the ALJ.

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uploaded 2002/08/09