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

LYNETTE K KOLLER, Employee

UNISOURCE WORLDWIDE INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 03002344LX


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 five years as an office associate for the employer, a distributor of paper products. Her last actual day of work was December 20, 2002, and she was paid her regular salary through December 31, 2002, when she was laid off. The employee subsequently filed unemployment benefit claims for weeks 6 and 7 of 2003, the calendar weeks ending February 8 and February 15, respectively. She was paid benefits of $247.00 weekly for those weeks.

The issue to be resolved is whether the employee received vacation or termination pay allocated to the above weeks. Wis. Stat. § 108.05(5) provides as follows:

"(5) TERMINATION PAY. An employee's dismissal or termination pay shall, for purposes of eligibility for benefits for partial unemployment under sub. (3), be treated as wages for a given week only if it has by the close of that week become definitely allocated and payable to the employee for that week, and the employee has had due notice thereof, and only if such pay, until fully assigned, is allocated:

(a) At not less than the employee's approximate full weekly wage rate; or

(b) Pursuant to any other reasonable basis of allocation, including any basis commonly used in computing the termination pay of employees." (1)

The employee signed a severance agreement on December 14, 2002. That agreement stated that the employer would be "reporting both your severance pay and your vacation pay to the appropriate unemployment agency as pay for the number of weeks which they were based on and as being allocated to the weeks immediately following your last day of work." The agreement did not refer to specific weeks or dollar amounts. Thereafter, the employer sent notice to the Unemployment Insurance Division that specifically allocated the partial week of vacation pay to week 1 of 2003, the full week of vacation pay to week 2 of 2002, and severance pay to weeks 3 through 7 of 2003. The employer sent out a lump sum payment for the severance pay on January 10, and a lump sum payment for the vacation pay on January 21, 2003.

The employer clearly indicated that the employee's vacation and termination pay would be allocated beginning with the week following her last day of work. The employee's last day of work was December 20, 2002 (week 51). Therefore, the allocation began in week 52 of 2002. If the employer meant for the allocation to commence the week after the last week for which the employee was paid, it should have so stated in the agreement. The agreement did not indicate that the vacation pay would be allocated first. There was no way for the employee to determine from the agreement that the employer would allocate the partial week of vacation first and the full week later. The employer simply did not give the employee the detailed information that it provided the department. The commission finds the pay should be allocated in the order it appears in the agreement and that the full week of vacation pay should be allocated before the partial week of vacation pay.

Accordingly, the employee received termination pay in the amount of $407.60 in weeks 52 of 2002 through week 4 of 2003. The employee received vacation pay in the amount of $407.60 in week 5 of 2003.

The commission finds that in week 6 of 2003 the employee received vacation pay in the amount of $163.04, that was definitely allocated, payable or fully assigned to that week and the employee received due notice of that assignment or allocation within the meaning of Wis. Stat. § 108.05(4).

The commission further finds that in week 7 of 2003, the employee did not receive termination or vacation pay that was definitely allocated, payable or fully assigned to that week, within the meaning of Wis. Stat. § 108.05(4) and (5).

The commission further finds that the employee was paid benefits in the amount of $90.00 for week 6 of 2003, for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The final issue to be decided is whether recovery of overpaid benefits must be waived. Wis. Stat. § 108.22(8)(c), provides that the department shall waive the recovery of overpaid benefits if the overpayment was the result of departmental error, and the overpayment did not result from the fault of the employee. Under Wis. Stat. § 108.02(10e)(a) and (b), department error is defined as an error made by the department in computing or paying benefits which results from a mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, or from misinformation provided to a claimant by the department, on which the claimant relied.

The overpayment in this case resulted because the department was not aware that the employee was receiving vacation or termination pay. The overpayment was not due to department error as defined in Wis. Stat. § 108.02(10e)(a) and (b).

The commission further finds that waiver of benefit recovery is not required under Wis. Stat. § 108.22(8)(c), because the overpayment was not the result of a department error. See Wis. Stat. § 108.22(8)(c)2.

DECISION

The decision of the administrative law judge is affirmed in part and reversed in part. Accordingly, the employee is eligible for $157.00 in benefits for week 6 of 2003, and $247.00 in benefits for week 7 of 2003. She is required to repay the sum of $90.00 to the Unemployment Reserve Fund.

Dated and mailed October 3, 2003
kollely . urr : 132 : 1 : UW 910

/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 of the ALJ's decision was not based on the credibility of the witnesses.

cc: Unisource (Brooklynn Park, MN)


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Footnotes:

(1)( Back ) Pursuant to Wis. Stat. § 108.05(4), vacation pay is treated the same as termination pay. 

 


uploaded 2003/10/03