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

DOLORES I KROMENACKER, Employee

ADVENTURE ACADEMY INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 03401580GB


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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the employee is eligible for benefits as of week 11 of 2003, if otherwise qualified.

Dated and mailed March 4, 2004
kromede . usd : 145 : 1   VL 1059  VL 1059.201

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner



MEMORANDUM OPINION

In its petition for commission review the employer asserts that the reduction in the employee's pay was not significant enough to qualify as good cause attributable to the employer for quitting. The employer asserts that the employee was offered a reduction in salary, but that her wages would not be reduced to the level that they would be substantially less favorable than those prevailing for similar work in the labor market. The commission has held that a decrease in pay, even if the wage offered is still prevailing, can amount to good cause attributable to the employer for quitting. The commission takes a number of factors into consideration when determining whether good cause exists. See Anthony v. The Good Guy's Pub, UI Dec. Hearing No. 90-402092 (LIRC Feb. 14, 1991).

In this case, for example, the reduction in salary and the demotion were the result of financial circumstances and not as the result of some action on the part of the employee. For instance, the employer did not demote the employee because she failed to perform all the duties of a director. The pay decrease was significant. The employer unilaterally decreased the employee's salary and demoted her. The employer asserts that Wis. Stat. § 108.04(7)(f), which indicates that if a worker is transferred to a job paying less than two thirds of his prior wage rate the worker will be eligible for benefits after a short waiting period, applies in this case. However, in Cornwell Personnel Associates v. LIRC, 175 Wis.2d 537 (Ct. App. 1993), the court of appeals rejected such an argument stating:

"Section 108.04(7)(f), is worded such that it applies only in cases where the employee is transferred to work paying less than two-thirds of his or her immediately preceding wage rate. However, we find no indication that where an employee is transferred to work paying more than two-thirds of the previous wage rate, sec. 108.04(7)(f) necessarily precludes a finding of good cause. On the contrary, we conclude that good cause can exist where an employee is transferred to a job above the two-thirds threshold."

Cornwell Personnel Associates at 549.

The commission has found that a worker had good cause attributable to the employer for quitting, even when the decrease in pay is much less than one third, depending upon the circumstances of the case. Casalena v. Gateway Plastics Inc. UI Dec. Hearing No. 02005855WK, (LIRC May 21, 2003).

The employer argues that as Wis. Stat. § 108.04(7)(f) allows benefits when the wage decrease is greater than two thirds. Because the employee's reduction was only about twenty percent, the employer argues this provision would not apply to her. However, the commission has interpreted this to mean that when the employer reduces a worker's salary by more than two-thirds, the reduction is so significant that the employee is allowed benefits regardless of whether the employer had a good reason for the reduction or if the reduction was occasioned by some fault on the part of the employee.

cc: 
Attorney Michele M. Biwer
Attorney Michael J. Kirschling


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uploaded 2003/03/08