MICHAEL T. MUNS, Employee

SERVICE PAINTING CORPORATION, Employer

An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter, dismissing the employee's request for hearing because it was late. The employee filed a timely petition for Commission review. On November 3, 2005, the Commission affirmed the decision of the ALJ, agreeing that the employee's request for hearing was late and that it could not be accepted because the lateness was not for a reason beyond the employee's control, within the meaning of Wis. Stat. § 108.09(4)(c). Thereafter, the employee requested the Commission to reconsider its decision, by letter received at the Commission on November 11, 2005.

Under the provisions of Wis. Stat. § 108.09(6)(b), the Commission may, within 28 days from the date of its decision, on its own motion, for reasons it deems sufficient, set aside its prior decision and may affirm, reverse or modify the ALJ's decision, or remand to the department for further proceedings.

The commission has again considered the petition and the employee's request for reconsideration. Based on its reconsideration, the Commission hereby sets aside its prior decision (dated November 3, 2005), and issues the following:

The employee initiated a claim for unemployment benefits in week 34 of 2004, the calendar week ending August 21st. He indicated in his claim that he had been laid off. The employer did not return a form contesting the claim at the time, and the employee began receiving weekly benefits. He continued to be paid benefits through week 46 of 2004, in the total amount of $4277. The employer questioned the claim on or about July 20, 2005. A department adjudicator investigated the claim, taking statements from the employee and from the employer's representatives.

The adjudicator issued an Initial Determination on August 5, 2005. That determination held that the employee voluntarily terminated (quit) his employment with the employer in week 33 of 2004 (the week ending August 14), within the meaning of Wis. Stat. § 108.04(7)(a). It further held that the employee was ineligible for benefits beginning with week 33 of 2004 and until he obtained requalifying work and wages, as set forth in the determination. The determination further held that the employee had been overpaid the $4277 in benefits that he had already received and that recovery of the overpaid benefits could not be waived. The Initial Determination stated on the first page:

"This decision results in an overpayment of $4277 which the claimant must repay. Repayment instructions will be mailed to the claimant after this decision is final.

"The department will withhold benefits due for future weeks of unemployment to offset overpayment of UI and other special benefit programs that are due this state, another state, or the federal government."

On the second page of the Initial Determination, the following statements appear:

"Recovery of the erroneously paid benefits established by this decision is not waived because they were not the result of a departmental error.

"This overpayment amount includes benefits which were transferred to the clerk of courts pursuant to a court order for child support.

Pursuant to section 108.04(13)(e), benefits paid through 8/6/05 will be charged to the above employer's U.C. reserve account.

Pursuant to section 108.04(13)(e), the employer's U.C. reserve account will not be credited with the amount of overpaid benefits, even if repayment is received by the department."

The last day for timely requesting a hearing from the Initial Determination was August 19, 2005. (Wis. Stat. § 108.09(2r)). The employee filed his request for hearing on September 16, 2005. In his appeal, he stated, "I assumed that Service Painting Inc. was responsible for this payment. The determination...clearly states that above employer (SPI) is charged in this matter.....Had I understood it I would have faxed an appeal the very next day." Based on the statements in the Initial Determination and the employee's statement that he misunderstood that he would have to repay the overpayment, the ALJ and the Commission held that the Initial Determination was clear in requiring repayment of the overpayment, and that the employee had not shown a reason beyond his control for the late request for hearing.

In his request for reconsideration, the employee stated that he was led to believe that the overpayment was the responsibility of SPI, because of the statement in the Determination that the employer's account would be charged. He further contended that he would have appealed timely if he had believed that he would be held responsible for the benefits he had been paid, after nearly a year had elapsed from the time he started the claim.

On further consideration, the Commission agrees with the employee's contention that the late request for hearing was for a reason beyond his control. The context in which the Initial Determination was issued, coming roughly one year after the start of the benefit claim, with no prior contest from the employer, in combination with the statement in the Determination that the employer's account would be charged with the benefits, could reasonably have led the employee to believe that the benefits would remain paid without a requirement that he repay them. While he might have inquired of the department in order to clarify any doubts, he did promptly file for a hearing upon learning that he was expected to repay the benefits he had received.

In situations such as are involved in this claim, where an employer files an objection to a claim long after first presented with the opportunity to do so on the department's form UCB-16, the law (Wis. Stat. § 108.04(13) and the provisions thereunder), state that the employer is "at fault" if it fails to file a report contesting the claim, and that eligibility questions in objection to a 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. However, under those same provisions, it is also necessary to determine whether the employee was "at fault." 108.04(13)(c) provides, "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..." 108.04(13)(f) provides that an employee is at fault if he commits an act of concealment or fails to provide correct and complete information to the department.

Because the Initial Determination concluded that the employee was required to repay the benefits already paid, it must have been based on a finding that the employee was "at fault." But the Initial Determination nowhere states how the employee was determined to have either committed an act of concealment or failed to provide correct and complete information to the department. That being the case, the Commission concludes that, under the circumstances, the employee may well have understood from the Determination that the benefits would remain paid and not have to be repaid, and that the employer, having very belatedly contested the claim, would bear responsibility for the overpaid benefits.

The Commission therefore sets aside its decision dated November 3, 2005, under authority of Wis. Stat. § 108.09(6)(b). And, after further consideration:

The Commission finds that the employee's request for hearing was not timely, within the meaning of Wis. Stat. § 108.09(2r), but that the employee's appeal was filed late for a reason that was beyond his control, within the meaning of Wis. Stat. § 108.09(4)(c).

The decision of the administrative law judge is reversed. Accordingly, this matter is remanded to the department for a hearing on the issue of whether the employee voluntarily terminated his employment with Service Painting Company on or around week 33 of 2004. The appeal tribunal shall also take testimony to enable it to determine whether the employee committed an act of concealment or failed to provide correct and complete information to the department when he filed his claim, within the meaning of Wis. Stat. § 108.04(13)(f), so that it may rule on whether the employee was "at fault" and required to repay the overpayment, in the event the appeal tribunal concludes that the separation from employment was a quit rather than a layoff.

Dated and mailed November 29, 2005
munsmi . urr : 180 :  PC 711

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

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