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

DOUGLAS R SCHULTZ, Employee

STEEL DESIGN INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 06200981RH


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 nine days as a welder/fabricator for the employer, a steel fabrication business. He last performed work for this employer on Thursday, April 6, 2006 (week 14).

The employee earned $11.00 per hour with this employer, with no fringe benefits. He quit to take a job with another employing unit (Rynders Development). The new job offered a pay rate of $12.00 per hour, and included benefits. He worked only 71/4 hours at Rynders Development before that employment relationship ended. He did not earn four times his weekly benefit rate of $303.00 (or $1,212.00) in that subsequent employment before applying for unemployment insurance benefits.

Prior to beginning work with this employer, the employee last worked for a trucking company, Halvor Lines, Incorporated. He was an over-the-road driver for Halvor Lines. That employment relationship ended on February 12, 2006 (week 7). He began work for the named employer on Monday, March 26, 2006 (week 13). As an over-the-road truck driver with Halvor Lines, the employee was paid approximately 41 cents per mile.

Department records indicate the employee earned the following wages at Halvor Lines:

1st quarter of 2005 $4,682.80
2nd quarter of 2005 $7,579.40
3rd quarter of 2005 $2,115.60
4th quarter of 2005 $7,376.40

The employee's total wages as a truck driver in 2005, therefore, were $21,754.20. The employee supplemented his income in 2005 by working for a second employer, Lakeland Area Bus Service, when not working as an over-the-road driver. He earned $3,007.50 in that work in the 3rd quarter of 2005, and $200.00 in the 4th quarter of 2005. If these totals are included in his earnings, he earned $24,961.70 in 2005.

In the employee's job with the named employer, he earned $440.00 per week for a 40-hour week. Multiplied by 50 weeks per year (assuming two weeks unpaid vacation), he would earn $22,000.00 annually. If he were paid for all 52 weeks per year, he would work 2,080 hours, and earn $22,880.00.

The issue to be decided is whether the employee's quitting was for any reason that would permit the immediate payment of unemployment insurance benefits.

Wisconsin Statutes § 108.04(7)(a), provides that an employee who voluntarily terminates employment is ineligible for benefits unless the quitting falls within a statutory exception. Wis. Stat. § 108.04(7)(e) provides an exception to this quit disqualification if the employee accepted work which could have been refused with good cause under Wis. Stat. § 108.04(8) and then terminated such employment with the same good cause within the first ten weeks after starting work.

Wisconsin Statutes § 108.04(8)(d] states as follows, as relevant here:

An employee shall have good cause...regardless of the reason articulated by the employee for the failure [to accept suitable work when offered], if the department determines that the failure involved work at a lower grade of skill or significantly lower rate of pay than applied to the employee on one or more recent jobs, and that the employee had not yet had a reasonable opportunity, in view of labor market conditions and the employee's degree of skill, but not to exceed 6 weeks after the employee became unemployed, to seek a new job substantially in line with the employee's prior job skill and rate of pay.

In this case the employee's work for the named employer paid him more per year than his previous work as a truck driver. The employee did not suffer a decrease in pay from his previous position. Nor can the commission find that the employee's work as a welder constituted a lower grade of skill.

Wisconsin Statutes § 108.04(9) provides that a claimant shall not be denied benefits for refusing to accept new work if the wages, hours (including arrangement and number), or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality. If the condition in question is found in less than 25 percent of the similar work in the labor market, then the condition is "non-prevailing." In this case the employee was paid $11.00 per hour. The point at which the wage for work as a welder is considered "substantially less favorable" is $10.83.

The employee quit his employment to accept more favorable work. The employee must earn four times his weekly benefit rate before he is eligible for benefits pursuant to Wis. Stat. § 108.04(7)(L). The employee had not requalified at the time of the hearing.

The commission therefore finds that in week 14 of 2006, the employee voluntarily terminated his employment within the meaning of Wis. Stat. § 108.04(7)(a) and not for any reason constituting an exception to that section.

The commission further finds that the employee was paid benefits in the amount of $2685.00 for weeks 15 through 23 of 2005, for which the employee was not eligible and to which the employee was not entitled, within the meaning of Wis. Stat. § 108.03(1).

The final issue to be decided is whether recovery of overpaid benefits must be waived. Wis. Stat. § 108.22(8)(c), provides that the department shall waive the recovery of overpaid benefits if the overpayment was the result of departmental error, and the overpayment did not result from the fault of the employee. Under Wis. Stat. § 108.02(10e)(a) and (b), departmental error is defined as an error made by the department in computing or paying benefits which results from a mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, by commission or omission, or from misinformation provided to a claimant by the department, on which the claimant relied.

The ALJ found the employee quit within 10 weeks and for the same good cause he would have had for refusing the work. In doing so the ALJ combined the employee's wages in 2005 with two separate employing units and compared hose wages to the wages the employee would have earned in a year for the employer. The ALJ found that the 9% to 12% reduction in wages would have entitled the employee to refuse the work in his canvassing period. The commission finds that the ALJ misapplied the law causing the employee to be paid benefits to which he was not entitled.

The statute allows the decision maker to compare rates of pay from one or more recent jobs to the quit position. Where as here the employee was paid by different methods, per mile and per hour, the commission believes it was reasonable for the ALJ to compare what the employee made in a year for a prior employer with what the employee would have made if he worked a year for the named employer. However, there is no reasonable basis for combining an employee's wages with two or more employing units to determine if the employee could have refused work. Further, even if the commission accepted the ALJ's method, the resulting decrease in wages was only 9% to 12%. The commission and department have consistently stated that to be considered a "significantly" lower rate a pay there must be a decrease of 20% or more. See e.g., Watt v. Seek Inc., UI Dec. Hearing No. 99402272GB (LIRC Feb. 10, 2000); Mariano Gonzalez v. LIRC and Westwood Aluminum Castings, Inc., Case 96-CV-007277 (Wis. Cir. Ct., Milwaukee Co., May 29, 1997).

The commission further finds that waiver of benefit recovery is required under Wis. Stat. § 108.22(8)(c), because the overpayment did not result from the fault of the employee as provided in Wis. Stat. § 108.04(13)(f), and the overpayment was the result of a departmental error. See Wis. Stat. § 108.22(8)(c)2.

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 14 of 2006, and until four weeks elapse since the end of the week of quitting and the employee has earned wages in covered employment equaling at least 4 times the weekly benefit rate which would have been paid had the quitting not occurred. The employee is not required to repay the sum of $2685.00 to the Unemployment Reserve Fund.

Dated and mailed August 9, 2006
schuldo . urr : 132 : 8 : SW 806  VL 1034

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

 

NOTE: The commission did not consult with the ALJ regarding her demeanor impressions of the witnesses. The commission's reversal is not based on the credibility of the witnesses.


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