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

LOIS J JONES, Employee

WE ENERGIES, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 06003422MD


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.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, as of week 33 of 2006, the claimant is not eligible to start a benefit year.

Dated and mailed December 1, 2006
joneslo . usd : 132 : 8  BR 305  UW 910

/s/ James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

MEMORANDUM OPINION

The claimant has petitioned for review of the appeal tribunal decision that found she did not have combined base period wages in covered employment to meet the minimum benefit rate of $51.00. The claimant states in her petition that she agrees that she did not have base period wages. The claimant states that her appeal is based upon the fact that the employer did not report the weekly wages and that it informed workers that the severance pay would be allocated in weeks and reported to the state in that manner. However, there is nothing in the record to establish that the severance pay was not in fact allocated as set forth in the employer's information to the claimant. The fact that it is allocated to a week does not make it wages for determining base period wages. For base period wages purposes, the question is when the severance pay was paid to the employee. It is typical for an employer paying severance to a worker to do so in one lump sum and then allocate the payment over weeks based on a worker's weekly earnings. That is what occurred in this case. The allocation of such severance pay would be considered when calculating the employee's benefit entitlement in a week. That is, termination pay allocated to a week is treated as wages for purposes of eligibility for benefits for partial unemployment under Wis. Stat. § 108.05(3).

The claimant seems to believe that the employer has been nefarious in how it has handled the allocation of severance pay. However the employer did what employers typically do which is to pay a lump sum severance amount and then allocate the severance to future weeks. The employer acknowledged at the hearing that it engages in such allocation so that an employee cannot collect UI benefits. The law allows an employer to engage in such allocation. Of course, there may be the case that the amount of severance allocated to a week would not render a claimant totally ineligible for benefits. Given the amount of severance pay allocated to each week, the employee would have been ineligible for benefits for any week for which the severance pay was allocated. Thus, if the employee had initiated a benefit claim in January of 2005, she would have been ineligible for benefits based on the amount of severance pay allocated to weeks in 2005.  (1)   In summary, severance pay allocated to a week is treated as wages in the week allocated when calculating an employee's weekly benefit entitlement. Severance pay is base period wages when it is actually paid to the employee, not in the week to which the employer allocates that pay.

cc: WE Engergies



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Footnotes:

(1)( Back ) Under Wis. Stat. § 108.05(3)(a), Stats., an employee's benefit entitlement for a week of partial unemployment is determined by disregarding the first $30 of wages earned and reducing the weekly benefit by 67% of the remaining amount. The employee's weekly severance pay was $1,384.80. Therefore, her benefit entitlement would be reduced by 67% of $1,354.80 or $908. That amount exceeds the maximum weekly benefit rate for 2005.

 


uploaded 2006/12/04