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

SHAWN W ROEGLIN, Employee

TECHNOLOGY ENTERPRISE COMPUTING WORKS LLC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 05600856WK


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 for the employer, a corporation owning a computing business, for almost 24 years. His last day of work was March 31, 2004.

The employee's position with the employer was eliminated due to a restructuring of its workforce. The employee attended a series of meetings prior to his last day of work and received information concerning benefits to be paid after work had ceased. Among the benefits conferred on the employee was receipt of his regular salary, paid biweekly, for the 52 week period next following his last day of work. The employee's gross salary figure, reduced to a weekly number and rounded to the closest whole dollar, was $2,235. The employee initiated a claim for unemployment insurance in week 18 of 2004, the week ending May 1. While completing the initial claim, he disclosed his receipt of the pay. He was not advised that he was required to report the sum weekly, due to the fact that any outstanding balance payable to the employee upon his accepting work with a different employing unit would immediately be paid to him in a lump sum. Accordingly, the employee did not report his compensation as dismissal pay. He received full weekly unemployment insurance payments as a result.

The first issue to be decided is whether the employee received dismissal or termination pay that should be treated as wages for benefit purposes for the weeks in which the employee claimed benefits.

"(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."

The employee contended that the information received from the employer prior to separation characterized the continuation of his salary for a one-year period as a general benefit, and not as wages. However, the documentation distributed to acquaint workers with separation benefits construed the pay as coming from a "severance plan." It is beyond dispute that the employee was advised he was entitled to the pay based on his involuntary separation from work and his length of service prior to the separation. Overall the employee knew, or should have known as of the first week claimed that he was receiving pay based on his dismissal from the employer and that the amount of the weekly payments was equal to his weekly salary while employed. Consequently the employee's severance pay was definitely allocated and payable to the employee, with due notice for the weeks at issue. The compensation received was therefore wages for benefit purposes.

The commission therefore finds that the employee received dismissal or termination pay in the amount of $2,235 for weeks 18 through 43 of 2004 that was definitely allocated, payable or fully assigned to those weeks and the employee received due notice of that assignment or allocation, within the meaning of Wis. Stat. § 108.05(5).

The final issue to be resolved is whether the employee is entitled to a waiver of the overpayment requirement.

The employee testified that he disclosed the severance pay to a department worker. He testified that he answered her questions honestly and told the department worker this was a benefit payout. He testified that she asked whether he would receive all the money the employer owed him as a lump sum if he found another job. The employee testified he was under the impression that the department did not consider this to be severance pay and did not report it. The department did not present the testimony of a witness to challenge the employee's testimony in this regard. However, the commission notes that Wis. Stat. § 108.05(5) mentions allocation to specific weeks and a department worker may well have concluded that since the employee could have received the payments as a lump sum at the end of his employment or could have received any money that had not been paid at any time, and would receive the balance if he found another job, the employer did not allocate the payments. The commission did not consider his testimony in this regard to be patently incredible. In addition, the commission did not consider his testimony to be hearsay because pursuant to Wis. Stat. § 908.01(3), it was not offered for the truth of the matter asserted. Rather, the employee offered the statements to explain that he acted in reliance upon statements made by the department worker.

Wis. Stat. § 108.22(8)(c), provides that the department shall waive the overpayment if the "overpayment was the result of a departmental error and was not the fault of any employer under § 108.04(13)(f)." The department in its petition alleges that the ALJ failed to consider whether employer fault was responsible, at least in part, for the overpayment. The department asserts that the employer was mailed a UCB-16 Separation Notice on May 1, 2004. The form was a required report due by May 8, 2004. The department asserts that the employer failed to return the form. The department requests that the decision be remanded to determine whether there is employer fault and whether the overpayment can be waived. The commission further notes that it can be the case that if the employer is at fault for the erroneously paid benefits, even if there is no department error, there is no overpayment established. The commission does not have evidence in the record to make this determination and agrees with the department that the matter should be remanded for this determination.

DECISION

The decision of the administrative law judge is affirmed in part and reversed in part. Accordingly, the employee is ineligible for unemployment benefits in weeks 18 through 43 of 2004. Further, this matter is remanded to the department for a hearing and appeal tribunal decision as to whether the overpayment is the result of department error, whether there is employer fault, and whether the overpayment should be established or waived.

Dated and mailed August 12, 2005
roeglsh . urr : 145 : 1 UW 910  BR 335.03

/s/ James T. Flynn, Chairman

David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

MEMORANDUM OPINION

The commission did not discuss witness credibility and demeanor with the ALJ who held the hearing. The commission affirmed the ALJ's decision in part. However, the commission concludes that there was insufficient evidence in the record to determine that the overpayment could be waived and remands this case for additional evidence and decision by an ALJ.

cc: Gregory A. Frigo


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