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

KATHY M FLEMING, Employee

WAL MART ASSOCIATES INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 03005241MD


On September 23, 2003, an administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. No timely petition for review was filed.

On February 3, 2004, the Department of Workforce Development submitted a written request that the commission reopen this matter on the ground of mistake. After reviewing the record adduced at the hearing, the appeal tribunal decision, and the department's written arguments, and pursuant to authority granted in Wis. Stat. § 108.09(6), the commission, on its own motion, sets aside the appeal tribunal decision issued on September 23, 2003, on the ground of mistake. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked over three years as a fork lift driver, for the employer, a retail store. Her last day of work was May 19, 2003 (week 21) when she was discharged from that employment.

The employee initiated a claim for unemployment benefits on May 20, 2003. She indicated that she had not been laid off but had been discharged from employment. When she telephoned her claim for benefits for week 21 of 2003, she reported that she had earned $300.00 in wages working that final week for the employer.

The employee did not dispute the allegation that she was discharged from her employment for misconduct connected with that employment.

The commission therefore finds that in week 21 of 2003, the employee was discharged for misconduct connected with her work for the employer within the meaning of Wis. Stat. § 108.04(5).

The employee appealed that portion of the initial determination that found she was overpaid benefits and required to repay those benefits to the department. The parties agreed that departmental records could be reviewed by the ALJ prior to making a decision in this matter. By virtue of a post-hearing communication with the parties, and after receiving no objections, the ALJ also took jurisdiction of the issue of prior concession under Wis. Stat. § 108.04(13)(c).

Departmental records indicate that on May 21, 2003, the day after the claimant filed for unemployment benefits, the employer was sent a UCB-16, Separation Notice. That form advises employers that they will be contacted by an adjudicator "to obtain detailed information about the discharge." (emphasis in original) and to be prepared to "Report any and all other eligibility issues that apply to this claim." Employers are further instructed to return the form within 7 days (here, May 28) only if "there is another eligibility issue(s) to report." That report was not returned.

On May 29, 2003 (week 22), an adjudicator contacted an employer agent by telephone and recorded the agent as stating that the employee was "Laid off due to lack of work. Clmt (claimant) agrees."

On May 20, 2003 (week 22), the claimant was issued her first benefit check in the amount of $148.00.

On May 31, 2003 (week 22), the department mailed a Form UCB-23, Wage Verification/Eligibility Report, to the employer requesting that it confirm the amount of wages reported by the employee; and instructions to "Check below if any eligibility issue applies to this claim." (emphasis in original). One of the boxes available to be checked is "was DISCHARGED." The form had a June 9, 2003 due date. It was not returned until after close of business on June 9.

On June 2 and 9, 2003, the department mailed the employee's benefit checks totaling $658.00 for weeks 22 and 23.

On June 10, 2003 (week 24) the department processed the response from the employer's agent which included a copy of Form UCB-23 with an attached letter. The employer made no entries on Form UCB-23, no boxes were checked and no other information was entered. The form was not signed. The attached letter identified itself as a response to the UCB-23 and stated "we request a determination on the claimant's eligibility . . . . The claimant was discharged."

On June 19, 2003, a claim investigator telephoned the same employer agent who had informed the department on May 29 that the claimant was laid off due to lack of work and left a message requesting specific information regarding the discharge and gave a deadline of June 23 at 10:00 a.m. The agent did not return the call.

On June 23, 2003, the claims specialist contacted the employee, took her statement as to the reason for the discharge and, based solely on the employee's statement, issued a determination finding discharge for misconduct which denied benefits and assessed an overpayment of the benefits previously paid in the amount of $806.00.

The issue to be decided is whether the employee has been overpaid benefits that must be repaid to the department.

Wisconsin Statute § 108.04(13)(a) and (b) provides that the department must apply the provisions of ch. 108 even if the employer does not question the employee's eligibility and can pay benefits based on the information available. Wis. Stat. § 108.04(13)(c) and (f) provides:

(c) If an employer, after notice of a benefit claim, fails to file an objection to the claim under s. 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 the employee are at fault, the department shall charge the employer for the benefits and proceed to create an overpayment under s. 108.22(8)(a). If benefits are erroneously paid without fault on the part of the employer, regardless of whether the employee is at fault, the department shall charge the benefits as provided in par. (d), unless par. (e) applies, and proceed to create an overpayment under s. 108.22(8)(a). If benefits are erroneously paid because an employer is at fault and the department recovers the benefits erroneously paid under s. 108.22(8), the recovery does not affect benefit charges made under this paragraph.

(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 employee commits an act of concealment as provided in sub. (11) or fails to provide correct and complete information to the department, the employee is at fault.

Paragraph (c) states that if there is a late denial by the employer, due to the employer's fault, the late denial "does not affect benefits paid" except as otherwise provided in paragraph (c). Paragraph (c) provides that if there is employer fault then the employer is charged. If there is employee fault an overpayment is created. Paragraph (c) further provides that if there is no employer fault then the employer is not charged and an overpayment is created whether the employee is or is not at fault. Paragraph (c) does not create an overpayment if the employer is at fault and the employee is not at fault.

In Bolzenthal v. Herald Times Reporter, Thomson Newspapers (Wisconsin) Inc., UI Dec. Hearing No. 90400718MN (LIRC Nov. 30, 1990), the commission interpreted the phrase "does not affect benefits paid" as meaning that no overpayment is created if the employer is at fault but the employee is not at fault. The "except for otherwise provided" language refers to when there is also employee fault, in which case benefits paid prior to the late denial are affected. The commission used the same rationale and reached the same conclusion in Rathsack v. The Queen Bee, UI Dec. Hearing No. 95401613AP (LIRC Apr. 11, 1996).

The department argues that the employee was at fault in this case because she knew she had been discharged for misconduct, but did not provide this information in her initial interview. The commission disagrees. The employee testified that she did tell the claims specialist the reason for her discharge but was cut off and told that the employer stated she had been laid off. The notation by the claims specialist that the employer's representative said the employee was laid off supports her claim. The record does not support the department's assertion that the employee failed to alert the department of the reason for her separation.

The commission agrees with the department that it has not been established that the department erred in initially paying benefits. The commission further agrees with the department that the employer was at fault for the erroneous payment of benefits in this case as defined in Wis. Stat. § 108.04(13)(f). The employer initially provided inaccurate verbal information when contacted by a claims specialist regarding the reason for the employee's separation. The employer was further at fault when it failed to timely return, and raise an eligibility issue on, the UCB-16 and UCB-23 reports.

The commission finds that the employee was erroneously paid benefits in the amount of $806.00 for weeks 21 through 23 of 2003, due to the employer's fault as defined in Wis. Stat. § 108.04(13)(f).

The commission further finds that the aforementioned benefits remain paid to the employee and need not be repaid by the employee to the department, and that the employer remains charged for such erroneously paid benefits pursuant to Wis. Stat. § 108.04(13)(c).

DECISION

The decision of the administrative law judge is set aside and the commission decision substituted therefore. Accordingly, the employee is ineligible for benefits beginning in week 21 of 2003, and until seven weeks elapse since the end of the week of discharge and the employee has earned wages in covered employment performed after the week of discharge equal to at least 14 times her weekly benefit rate which would have been paid had the discharge not occurred. The monetary computation is hereby set aside. The employee's benefit year does not begin on May 18, 2003. There is no overpayment established in this case. The employer remains charged for the erroneously paid benefits.

For purposes of computing benefit entitlement: Base period wages from work for the employer prior to the discharge shall be excluded from any computation of maximum benefit amount for this or any later claim. If the employee was also paid base period wages from work by other covered employers, the excluded wages shall be used to determine benefit eligibility. However, any benefits other wise chargeable to a contribution employer's account shall be charged to the fund's balancing account.

Dated and mailed March 9, 2004
flemika . urr : 132 : 1 : BR 319.1  BR 335 

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner


MEMORANDUM OPINION

The commission set aside the ALJ's decision on the ground of mistake as the ALJ misstated and misapplied the overpayment recovery waiver provision. The ALJ stated that current law provides that recovery of overpaid benefits can be waived if the overpayment was the result of departmental error, regardless of whether the employer was at fault. 1993 Wisconsin Act 373 created the overpayment recovery waiver provision. Wis. Stat. § 108.22(8)(c) was originally worded as follows:

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

a. The overpayment was the result of a departmental error, whether or not an employer is also at fault 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.

(Emphasis added.)

1999 Wisconsin Act 15 amended the wording of Wis. Stat. § 108.22(8)(c). The waiver provision now 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.

(Emphasis added.)

The 1999 amendment clearly states that waiver of the recovery of benefits can only occur if the erroneous payment of benefits was due solely to department error. Waiver of the recovery of benefits cannot occur if the employer was at fault, regardless of whether the department was also at fault.

cc: 
Wal-Mart Distribution Center (Tomah, Wisconsin)
Gregory A. Frigo


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