LAVERNE HAWKINS, Employee

EXTENDICARE HOMES INC, Employer
c/o UC EXPRESS

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, except that it makes the following modifications:

The second paragraph of the FINDINGS OF FACT and CONCLUSIONS OF LAW section is deleted and the following substituted:

The issue to be resolved is whether the employee voluntarily terminated her work with the employer and, if so, whether such termination fell within any of the exceptions which would allow the immediate payment of benefits.

On January 29, 2002 (week 5), the employee requested a reduction in her work schedule from 8 days to 6 days over a two-week period; and, on May 20, 2002 (week 21), she requested a reduction from 6 days to 5 days.

The fourth, fifth, and sixth paragraphs of the FINDINGS OF FACT and CONCLUSIONS OF LAW section are deleted and the following substituted:

The employee quit her employment effective January 29, 2002. The employee was eligible for, and had re-qualified for, benefits at the time she filed her initial claim on March 18, 2002.

The employee quit her employment effective May 20, 2002. The employee was ineligible for benefits after this quit, and until she satisfied applicable re-qualification requirements.

An overpayment of $478 resulted from this period of ineligibility. Waiver of this overpayment is not required by operation of Wis. Stat.
§ 108.22(8), because the overpayment did not result from department error, and the employee was at fault for failing to report her reduction in hours to the department.

The decision of the administrative law judge, as modified, is affirmed. Accordingly, the employee was eligible for benefits beginning in week 12 of 2002, if otherwise qualified. The employee was ineligible for benefits beginning in week 21 of 2002, and remained ineligible until four weeks elapsed since the end of the week of quitting and she earned wages in covered employment performed after the week of quitting equaling at least four times her weekly benefit rate which would have been paid had the quitting not occurred. The employee re-qualified for benefits as of week 27 of 2002. The employee is required to repay the sum of $478 to the Unemployment Reserve Fund for the period of ineligibility.

Dated and mailed April 16, 2004
hawkila . umd : 115 : 3  BR 339 VL 1039.09  BR 319.1

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

Robert Glaser, Commissioner

Wisconsin Statutes § 108.04(7m) states as follows:

(7m) VOLUNTARY REDUCTION IN HOURS OF EMPLOYMENT. An employee whose employer grants the employee's voluntary request to reduce indefinitely the number of hours of employment usually worked by the employee voluntarily terminates his or her employment within the meaning of sub. (7). The wages earned by the employee from that employer for any week in which the reduction requested by the employee is in effect may not be used to meet the requalification requirement provided in sub. (7)(a) applicable to that termination if the employer has notified the employee in writing, prior to the time that the request is granted, of the effect of this subsection. The department shall charge to the fund's balancing account benefits paid to such an employee that are otherwise chargeable to the account of an employer that grants an employee's request under this subsection, for each week in which this subsection applies, if the employer is subject to the contribution requirements of ss. 108.17 and 108.18.

The purpose of this statute is to prevent an employee from re-qualifying for unemployment insurance eligibility, and receiving partial benefits, when the partial-benefit entitlement is due to the employee's choice to work reduced hours for the on-going employer. See, Lipscomb v. St. Johns Home of Milwaukee, UI Hearing No. 98606449MW (LIRC March 30, 1999).

By operation of Wis. Stat. § 108.04(7m), the employee's voluntary reduction in her hours in January and in May of 2002 were quits. In the absence of the notice requirement in this statutory provision, the employee would have been ineligible for partial benefits after January of 2002 because she could not have used her earnings from the employer for purposes of re-qualifying.

However, the statute's prohibition on the use of earnings from the employer to re-qualify for benefits applies only "if the employer has notified the employee in writing, prior to the time that the request [for a reduction in hours] is granted, of the effect of this subsection." The employer did not show at the hearing that such notice was provided to the employee in January or in May of 2002 or at any other time. As a result, the employee's earnings from the employer could be used by her to re-qualify for benefits. See, McQuillan v. Looker, UI Hearing No. 03005059MD (LIRC Feb. 27, 2004).

It appears from the file in this matter that the employee had re-qualified for partial benefits before she filed her initial claim on March 18, 2002. However, the employee quit again in May of 2002, and continued to claim and receive benefits to which she was not entitled during the subsequent re-qualification period. It does not appear from the file that either the employee or the employer provided notice to the department of this second voluntary reduction in her hours of work at that time. As a result, the department had no reason to investigate her eligibility for benefits in May of 2002. Apparently, in week 25 of 2003, the employer challenged the employee's eligibility for partial benefits for the first time.

The administrative law judge, relying on the fact that the week in issue was week 25 of 2003, concluded that there had been no voluntary reduction in the employee's hours in week 25 of 2003, and therefore she continued to be eligible for partial benefits. However, there was never an allegation that the employee had voluntarily reduced her hours of work in week 25 of 2003.

The evidence shows that the employee was eligible for the benefits she received except during the re-qualification period following the quit in May of 2002. The question then arises as to whether an overpayment should be assessed for the benefits paid to the employee during this re-qualification period.

Wisconsin Statutes § 108.04(13)(c) states as follows, as relevant here:

. . . 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).

Here, the employer was at fault for failing to raise an eligibility issue until week 25 of 2003 even though it was aware that the employee was claiming and collecting benefits during the re-qualification period after the employee's quitting in May of 2002. The employee was also at fault because she failed to report her voluntary reduction in hours in May of 2002 to the department. As a result, waiver of the overpayment is not required by Wis. Stat. § 108.22(8), i.e., the overpayment did not result from department error, and the employee was at fault for failing to report her reduction in hours to the department.

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uploaded 2004/04/19