In the matter of the unemployment benefit claim of

FRANCIS J. BOLZENTHAL, Employee

Involving the account of

HERALD TIMES REPORTER, THOMSON 
NEWSPAPERS (WISCONSIN), INC., Employer

On February 16, 1990, the Department of Industry, Labor and Human Relations (the Department) issued an Initial Determination holding that the employe performed services for the employer that were not covered under the Wisconsin unemployment compensation law. As a result, the Initial Determination denied benefits and assessed an overpayment of $1,464.00. The employe filed a timely appeal and a hearing was held before an Appeal Tribunal. The Appeal Tribunal also held that the employe's services for the employer were not covered and, on April 26, 1990, issued an Appeal Tribunal Decision affirming the Initial Determination. The Department, pursuant to see. 108.09 (6)(a), Stats., petitioned the Commission for review of the Appeal Tribunal Decision. On August 1, 1990, the Commission ordered that additional testimony be taken before an Administrative Law Judge, acting as a deputy for the Commission, with respect to whether the employer failed to provide correct and complete information about the employe's benefit claim. The hearing was held on September 19, 1990, and a synopsis of the hearing testimony was transmitted to the Commission sometime thereafter.

Based on the applicable laws, records and evidence in this case, the Commission makes the following:

The employe delivered newspapers from door to door for the employer, Herald Times Reporter, from December 28, 1988, to February 26, 1989. The employe then began to work for Bay Shipbuilding Corporation from February 27, 1989, until he was laid off on November 28, 1989 (week 48). The employe filed an initial claim for benefits on form UCB-157 (Exhibit 1) on December 4, 1989 (week 49). He listed the Herald Times Reporter as an employer and described the type of work he did as "delivery driver". He subsequently received benefits in the amount of $183.00 for each week from week 49 of 1989 to week 4 of 1990, for a total of $1,464.00.

On December 6, 1989, the Department sent the employer a separation notice on form UCB-16 (Exhibit 2). The form stated that the employe had indicated he quit his job with the employer. The form also stated that if the employer disagreed with the reason given by the employe for the separation, or if the employer questioned the employe's eligibility for a reason other than the nature of the separation, the employer should mark the appropriate box. One of the boxes set out in the form is for "excluded employment." The employer marked only the box marked "quit." In addition, the employer added the statement that the employe found a full-time job and no longer needed to work part-time for it. The employer returned the form on December 12, 1989 (week 50). Because the employe had requalified for benefits despite quitting the employer (given the intervening employment at Bay Shipbuilding Corporation), his benefits were not affected by the separation notice returned by the employer.

Sometime later, the Department began to investigate the nature of the employe's job with the employer. According to a UCB-157 statement given by the employe on February 8, 1990 (Exhibit 5), the employe told the Department that he delivered newspapers from house to house in rural areas for the employer. He also testified to that effect during the first hearing held on April 16, 1990.

The first issue is whether the employe's services were in "excluded employment" within the meaning of sec. 108.02 (15)(k)4, Stats. If the employe's services were in excluded employment, the next issue is whether the employe was improperly paid benefits, resulting in an overpayment. Finally, the third issue is whether the employe should be required to repay the overpayment under sec. 108.22 (8)(a), Stats., or whether the employe may retain the benefits under sec. 108.04 (13)(c), Stats.

The Commission first considers whether the employe was engaged in excluded employment with the employer. Section 108.02 (15)(k)4, Stats., excludes selling or distributing newspapers from house to house from the definition of employment. The Commission agrees that the Appeal Tribunal correctly concluded that the employe's services for the employer were not "covered employment" within the meaning of the statutes. As a result, the wages that the employe earned from the employer should not be included in his base period wages. See sec. 108.02 (4m), Stats. With those wages excluded, the employe lacked sufficient wages outside the high quarter of his base period to qualify for benefits under sec. 108.04 (4)(a), Stats. The Appeal Tribunal also correctly concluded that the employe was improperly paid benefits in the amount of $1,464.00.

Under normal circumstances if benefits have been erroneously paid to an individual, that individual must reimburse the Unemployment Reserve Fund in the amount of the overpayment under see. 108.22 (8)(a), Stats. However, sec. 108.04 (13), Stats., sets out specific departures from that general rule. In this case, sec. 108.04 (13)(c) and (f), Stats., is relevant and provides as follows:

"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 see. 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 (8)(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." (Emphasis added).

The reason the employe received benefits was not his fault. He provided accurate and adequate information to the Department both in his initial claim for benefits and his statement on form UCB-157.  Benefits were paid to the employe in this case because the employer failed to raise the excluded employment issued in the separation notice on form UCB-16. The importance of indicating excluded employment in a separation notice is discussed in the Handbook for Employers distributed by the Department. See Handbook, pages 8 and 20. Failure to raise the issue constitutes fault on the part of the employer. See sec. 108.04 (13)(f), Stats. Under the circumstances, the Commission concludes that benefits paid to the employe before the issuance of the Initial Determination of February 16, 1990 (week 7) need not be repaid under see. 108.04(13)(c), Stats. (1)

The Commission therefore finds that as of week 49 of 1989, when the employe attempted to initiate his benefit claim, his services for the employer were not covered by the Wisconsin unemployment compensation law within the meaning of sec. 108.02(15)(k), Stats. The Commission further finds that the employe was paid benefits in the amount of $183.00 per week for each week from week 49 of 1989 through week 4 of 1990, amounting to a total of $1,464.00 for which the employe was not eligible. However, the benefits paid to the employe prior to the end of the week in which the Initial Determination was issued (week 7), are not affected by the determination that the employe was engaged in excluded employment, pursuant to sec. 108.04 (13)(c), Stats. Consequently, no overpayment may be assessed.

The Appeal Tribunal Decision is modified to conform with the foregoing and, as modified, is affirmed. Accordingly, the employe's services for the employer were not covered by the Wisconsin unemployment compensation law. The initial benefit computation (Form UCB-700) is set aside. If benefit payments become payable based on other employment, a new computation will be issued as to those benefit rights. However, the employe is not required to repay the sum of $1,464.00 to the Department.

Dated and mailed November 30, 1990
101 - CD1001  BR 319.1

/s/ Kevin C. Potter, Chairman

/s/ Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

The Commission's decision to modify the Appeal Tribunal Decision did not involve an assessment of the credibility of the witnesses in this case. Rather, the Commission differs with Appeal Tribunal as to the interpretation and application of sec. 108.04 (13)(c), Stats., when applying that section to essentially the same set of facts as found by the Appeal Tribunal. Consequently, a credibility conference with the Appeal Tribunal who issued the April 26, 1990, decision was unnecessary. Transamerica Ins. Co. v. ILHR Dept., 54 Wis. 2d 272, 283-84 (1972).

cc: 
Glenn Kelley
Director, Bureau of Legal Affairs

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(1)( Back ) The Commission's finding that the employer was at fault in not raising the excluded employment issue is consistent with the Initial Determination which charges benefits paid through week 7 of 1990 to the employer's account under sec. 108.04 (13)(e), Stats. That part of the Initial Determination was not appealed by the employer.

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