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

DIANNE M DRAKE, Employee

HUMANA INSURANCE CO, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 02404779GB


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 for the named employer until August 9, 2002 (week 32). She received vacation pay for some period, and also received a severance package. She filed an initial claim for unemployment insurance benefits on October 16, 2002. She answered affirmatively the question whether she had received "vacation pay or dismissal pay." She did so because she had, in fact, received vacation pay.

When the employee was in the process of filing her initial claim, she spoke to a claims taker named "Richard." She explained that she had received a severance package from the named employer, and asked how she was to handle her claim. She also told Richard that she would be receiving a biweekly check from the employer through the end of May. Richard asked her, "Why did you wait?" The claimant responded, "Humana didn't give us any direction." Richard instructed her to file her claim, and told her he would be sending a fact-finding notice, on which she could detail her reasons for failing to file a claim in the same week in which the employment relationship was terminated.

The employee received and completed a fact-finding notice. She explained on that department form, in part: "I did receive a severance package which I reported to Richard at your office."

On October 17, 2002 (week 42) the department sent the employer a UCB-16, Separation Report, upon which the employer was to raise potential eligibility issues, such as the employee's receipt of dismissal pay, and return the form to the department. The employer is to return the UCB-16 within 7 days if there are any eligibility issues. The employer did not return the form to the department.

The employee received one check for benefits deemed due in weeks 33 through 43 of 2002, and then three additional checks for weeks 44, 45 and 46 of 2002. Those checks were all paid on October 28, 2002 (week 44). Thereafter, the department issued the determination at issue, and no additional benefit checks were paid.

The issue is whether the overpayment of benefits to the claimant was because of department error or was partially because of the claimant's or employer's actions, and whether the department is required to waive recovery of any portion of that overpayment.

Generally, a claimant who receives unemployment compensation benefits in error is required to repay those benefits to the department. However, Wis. Stat. § 108.22(8) provides

(c) 1. The department shall waive recovery of benefits that were erroneously paid if:

a. The overpayment was the result of a departmental error and was not the fault of any employer under s. 108.04(13)(f); and

b. The overpayment did not result from the fault of an employee as provided in s. 108.04(13)(f), or because of a claimant's false statement or misrepresentation.

Wisconsin Statute § 108.04(13)(f) provides, in relevant part:

(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.

Wisconsin Statute § 108.09(1) provides, in relevant part:

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.

In this case, the employee alerted the department verbally and in writing that she was receiving monies from the employer following the separation. The employee reported receiving "vacation or dismissal pay" on her initial claim because, as she indicated in the foregoing, she knew she had received vacation pay. She testified credibly, however, that her employer had consistently referred to the monies she would be receiving after termination as "severance" and not "dismissal" pay. She did not believe that the two terms were interchangeable, so she answered "No" on her weekly claim forms. The commission concludes that the employee was not at fault in causing the overpayment at issue.

The department should have investigated the employee's receipt of severance pay given her statements to Richard and on the fact-finding notice. The department's failure to conduct such investigation constituted error.

Wisconsin Administrative Code § DWD 123.01 provides that there are 2 required types of benefit reports under Wis. Stat. § 108.04(13): UC-23 and UC-203. Accordingly, the employer did not fail to file a report required under ch. 108 as provided in Wis. Stat. § 108.04(13)(f). However, by failing to return the UCB-16, the employer failed to promptly inform the department of an eligibility question in objection to the employee's claim. As of week 43 of 2002, the week the UCB-16 was due, the employer was also at fault in the employee's erroneous receipt of unemployment insurance benefits. The employee was not paid benefits until week 44 of 2003, and therefore the employer was partially at fault for the erroneous payment of benefits.

The commission therefore finds that the employee was paid benefits in the amount of $4,536.00, for weeks 33 though 46 for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1), and that the entire overpayment must be repaid to the department because, although the overpayment was the result of department error, and not the result of any fault by the employee, the employer was also at fault in the overpayment of benefits, within the meaning of Wis. Stat. § 108.22(8)(a) and (c).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits in week 33 of 2002 through week 22 of 2003. She is required to repay the sum of $4,536.00 to the Unemployment Reserve Fund.

Dated and mailed July 29, 2003
drakedi . urr : 132 : 1 :  BR 335.04

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner


NOTE: The commission did not consult with the ALJ who presided at the hearing regarding her impressions of witness credibility and demeanor. The commission's reversal is not based on a differing impression of witness credibility or demeanor. Although the ALJ erroneously set forth the legal standard for waiver, and misapplied and misinterpreted the waiver provision, such errors did not cause the overpayment in this case.

cc: Gregory Frigo


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