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

CHARLENE M VANDER MEULEN, Employee

ACCRATECH INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 02002328WR


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:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked about four months as the sales manager for the employer, a manufacturer of products related to providing an uninterruptible power supply.

In 2001, an area manufacturer of uninterruptible power supply equipment ceased business operations at its area facility. A total of ten former key workers for that concern, including the employee, purchased some of the patents and formed a corporation for the purpose of continuing that business operation. To assist it in starting operations the new company anticipated receiving small business funding from a state agency. While waiting for that funding, the owners, including the employee, drew on existing funds for income. However, because of a delay in their loan approval, in November 2001 the ten owners decided to stop drawing salaries with the intent of paying themselves the arrearage when the business loan was approved. They continued working full time for their corporation.

In January 2002 the owners/board members realized that the loan proceeds would be needed to continue business operations. At that point, the owners, including the employee, decided to apply for unemployment benefits on the theory that because their corporation was not paying them a salary, they were unemployed. The employee worked at least 40 hours in week 3 of 2002.

Wis. Stat. § 108.05(3)(c) provides that an employee is ineligible for benefits in any week in which the employee "works a total of 40 or more hours for one or more employing units."

The employee asserted that she should be eligible for benefits because she was not being paid despite the fact that she was performing services for the employer for 40 hours a week during the weeks at issue. The commission agrees. The employee was not being paid for her services and agreed, as part owner and member of the employer's board, to forego her pay. The employee was donating her services. Wis. Stat. § 108.05(3)(c) contemplates that services be for pay. Given the employee's status as a board member, and her participation in and agreement with the decision to forego wages during the weeks at issue, the commission does not believe the employee had a viable wage claim against the employer.

However, other provisions of ch. 108 may operate to deny benefits in weeks at issue. The only issue noticed for hearing was the 40-hour a week provision of Wis. Stat. § 108.05(3)(c). Accordingly, the commission remands this matter for investigation and determination of the employee's eligibility for benefits during the weeks at issue under other potentially applicable provisions of ch. 108, including but not limited to, the general availability provision of Wis. Stat. § 108.04(2)(a)1., the suspension of employment provision of Wis. Stat. § 108.04(1)(b)1., and the voluntary leave provision of Wis. Stat. § 108.04(1)(b)2.

The commission therefore finds that beginning in week 3 of 2002, the employee did not work at least 40 hours a week for one or more employing units within the meaning of Wis. Stat. § 108.05(3)(c).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 3 of 2002, if she is otherwise qualified. This matter is remanded to the department for investigation and determination of the employee's eligibility for benefits in the weeks at issue consistent with this decision.

Dated and mailed December 6, 2002
vandech . urr : 132 : 1  UW 975

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

/s/ Laurie R. McCallum, Commissioner

 

NOTE: The commission did not discuss witness credibility and demeanor with the ALJ. The employee's testimony was not disputed.

 

cc: Attorney James P. Gerlach


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uploaded 2002/12/23