SARAH J CORONA, Employee

KENOSHA PUBLIC SCHOOL, Employer

and

RACINE UNIFIED SCHOOL DISTRICT, Employer

On July 29, 2006, a determination was issued to the employee and the Kenosha Public School (Kenosha), finding that the employee worked for an educational institution, in an instructional, research or principal administrative capacity during an academic year and had reasonable assurance of performing such services for any educational institution in the next academic year. As a result, for weeks 25 through 35 of 2006, base period wages paid by this employer could not be used to pay benefits or to meet the qualifying requirements of Wis. Stat. § 108.04(4).

On July 29, 2006, another determination was issued to the employee and the Racine Unified School District (Racine), finding that the employee worked for an educational institution, in an instructional, research or principal administrative capacity during an academic year and had reasonable assurance of performing such services for any educational institution in the next academic year. As a result, for weeks 25 through 35 of 2006, base period wages paid by this employer could not be used to pay benefits or to meet the qualifying requirements of Wis. Stat. § 108.04(4).

The employee timely appealed both determinations. Hearing number 06605019RC was assigned to the hearing involving Kenosha, while hearing number 06605020RC was assigned to the hearing involving Racine. The hearings were scheduled and conducted separately by the same Administrative Law Judge (ALJ) on September 14, 2006. On September 22, 2006, separate decisions were issued for each hearing number.

1. With respect to Kenosha, hearing number 06605019RC, the ALJ found that the employee performed services in an instructional, research, or principal administrative capacity, for an educational institution during an academic year or term, but that as of week 25 of 2006, the employee did not have reasonable assurance of performing such services again in the next academic year or term, within the meaning of Wis. Stat. § 108.04(17)(a).

2. With respect to Racine, hearing number 06605020RC, the ALJ found that the employee performed services in an instructional, research, or principal administrative capacity, for an educational institution during an academic year or term, and that as of week 25 of 2006, the employee had reasonable assurance of performing such services again in the next academic year or term, within the meaning of Wis. Stat. § 108.04(17)(a).

On October 13, 2006, the Department of Workforce Development petitioned the Labor and Industry Review Commission (Commission) for review of the appeal tribunal decisions. In addition to asserting that each decision was erroneous, the petition argued that since the hearing records were separate, the hearing record for each was insufficient upon which to make a decision pursuant to Wis. Stat. § 108.04(17)(a).

On December 29, 2006, the Commission ordered the taking of additional evidence before an administrative law judge acting on behalf the commission. The primary purpose was to allow consolidation of the hearing records. The hearings were to be scheduled together, with copies of each synopsis and received exhibits sent to the parties for review prior to the hearing. The parties were to be given an opportunity (1) to add additional material evidence, including the employee's base period services, and (2) for cross-examination.

On February 5, 2006, ALJ Waite completed the ordered hearings, consolidating the records in these matters and taking additional evidence. The matter was then returned to the Commission and the Commission makes the following:

In the 2004/2005 academic year, the employee taught kindergarten full-time for Kenosha. Upon completion of the 2004/2005 academic year, Kenosha offered the employee employment in the 2005/2006 academic year as a substitute teacher. The employee's last day of employment with Kenosha was June 6, 2005.

In the 2005/2006 academic year, the employee performed services as a substitute teacher for Racine. Her last day of work in that academic year was June 8, 2006 (week 23).

On May 22, 2006, prior to the end of the 2005/2006 academic year, Racine provided the employee with notice her assignment with it as a substitute teacher for the employer was renewed effective September 1, 2006, the tentative start date of the 2006/2007 academic year.

On July 19, 2006 (week 29), the employee signed a contract with Racine as a full-time kindergarten teacher for it in the 2006/2007 academic year. The employee's first day of work was August 23, 2006 (week 34).

Departmental records reflect that on June 19, 2006 (week 25), the employee reopened a claim for unemployment insurance benefits. The employee's base period, upon which her unemployment insurance benefits were computed, was the second quarter of 2004 through the first quarter of 2005, March 28, 2004, through March 26, 2005. The employee earned base period wages with Racine in the second quarter of 2004. She earned base period wages with Kenosha in the third and fourth quarters of 2004 and in the first quarter of 2005.

Departmental records further reflect that on August 9, 2006 unemployment insurance benefits totaling $266.00 were paid to the employee for week 24 of 2006; benefits of $73.00 were offset for that same week. On October 10, 2006, $2.00 in additional benefits were paid to the employee for week 24 of 2006. On October 11, 2006, weekly benefits of $339.00 were paid to the employee for weeks 25 through 32 of 2006. On October 12, 2006, benefits of $339.00 were paid to the employee for week 33 of 2006. Although the employee filed a weekly claim for unemployment insurance benefits in week 34 of 2006, she was not paid benefits based upon a separate disqualification issue.

The issue before the commission is the employee's eligibility for unemployment insurance benefits from Kenosha and Racine for the period between the 2005/2006 and the 2006/2007 school years (weeks 24 through 34).

Wisconsin Stat. § 108.04(17)(a) provides, in relevant part and with emphasis added, ⁽¹⁾

(17) EDUCATIONAL EMPLOYEES. (a) A school year employee of an educational institution who performs services in an instructional, research or principal administrative capacity is ineligible for benefits based on such services for any week of unemployment, which occurs:

1. During the period between 2 successive academic years or terms, if the school year employee performed such services for an educational institution in the first such year or term and if there is reasonable assurance that he or she will perform such services for any educational institution in the 2nd such year or term.

Wis. Stat. § 108.02(22m) provides that a

"'School year employee' means an employee of an educational institution or an educational service agency, or an employee of a government unit, Indian tribe, or nonprofit organization which provides services to or on behalf of an educational institution, who performs services under an employment contract which does not require performance of services on a year-round basis."  
 

Reasonable Assurance as applied to Kenosha

The ALJ found that the fact that the employee did not return to perform services for Kenosha in the 2005/2006 school year supported the no reasonable assurance finding. Such an approach requires the definition of school year employee found at Wis. Stat. § 108.02(22m) and the introductory clause of Wis. Stat. § 108.04(17)(a), ⁽²⁾ to be interpreted as specific to the named educational institution ⁽³⁾ and essentially ignores the intent of the reasonable assurance provisions and the practical implementation of the reasonable assurance provisions.

In particular, the focus of the reasonable assurance statutory provisions is centered on the type of employment instead of work for a specific employer. It requires a suspension of benefits when the claimant's work meets the criteria set forth in Wis. Stat. § 108.04(17). The statute has a federal basis ⁽⁴⁾ and in analyzing the statutory history in Wisconsin of Wis. Stat. § 108.04(17)(a), the Wisconsin Supreme Court explained that the provision was originally designed to 

prevent subsidized summer vacations for those teachers who are employed during one academic year and who are reasonably assured of resuming their employment the following year. Leissring v. DILHR, 115 Wis. 2d 475 (1983).

To effectuate this goal,

[i]n all unemployment compensation weeks to which the disqualification applies, the affected claimant is disqualified from receiving any benefits based on any base-period school employment, whether or not the school employer providing "reasonable assurance" during such claimant's benefit-year is also a base period employer of such claimant. In weeks to which the "reasonable assurance" disqualification applies, a claimant is not thereby disqualified from receiving benefits based on non-school employment to which the claimant may otherwise be entitled. See Comment #3, Stacey J. Becker, et. al. v. Milwaukee Public Schools, UI Dec. Hearing No. 88604031MWG, (LIRC May 9, 1990).

Similarly, in Leon Bunker v. LIRC, Loyal Public School, Peshtigo School Dist. 197 Wis. 2d 606, 541 N.W.2d 168 (Ct. App. 1995), the court explained that the employment for which a worker receives reasonable assurance need not be from the same employing unit as long as the work is reasonably similar. The reasonably similar requirement applies to substitute teachers as well as full-time and part-time teachers. DILHR v. LIRC and Smithson, 155 Wis. 2d. 256 (Ct. App. 1990). If multiple employing units are involved, a "finding of reasonable assurance requires comparing the employee's composite preceding school year employment with all of the assurance of work for the next year." Jodie L. Fetzer v. West Bend Joint School Dist., UI Dec. Hearing No. 93605520WB (LIRC Feb. 17, 1994). ⁽⁵⁾

In Kelly v. Westby Area Schools, Kickapoo Area School District, Richland School District and Viroqua Area School District, UI Dec. Hearing Nos. 04003695LX, 04003696LX, 04003697LX and 04003698LX (LIRC February 25, 2005), the commission referenced the composite approach in attempting to resolve the reasonable assurance issues involved in an employment situation involving multiple school districts. In that case, the commission analyzed whether reasonable assurance existed with each district individually and then, if there was no reasonable assurance with any one employing unit, it compared composite or total employment opportunity after the break with that before the break and in the base period. Id.  In Kelly, the commission concluded that the employee's opportunity for work had decreased both from the prior academic year and from her base period employment. It found that the school district with which the employee had reasonable assurance constituted less than 10% of the work she performed in the prior academic year.

In this case, Kenosha and Racine are in the employee's base period upon which the employee's entitlement to unemployment benefits will be computed. ⁽⁶⁾  As such, a determination must be issued for both Kenosha and Racine in order to compute the employee's eligibility based upon her school year wages with those employing units for the summer break between the 2005/2006 and the 2006/2007 academic years.

In the 2005/2006 academic year, the employee performed services as a substitute teacher for Racine. She did not work for Kenosha in the 2005/2006 academic year and it did not provide her with reasonable assurance of any services in the 2006/2007 academic year. Racine did provide her with reasonable assurance of substitute teaching for the 2006/2007 academic year as of week 23; however, "such services" has also been interpreted as the services that initially qualified the employee for benefits, specifically, the base period services. See Wanish v. LIRC, 163 Wis. 2d 901 (Ct. App. 1991). ⁽⁷⁾

Wis. Admin. Code § DWD 132.04 provides guidance as to what is reasonably similar; the standard set forth in Wis. Admin. Code § DWD 132.04(2) is to treat the terms and conditions of the work ⁽⁸⁾ as reasonably similar if:

(a) The gross weekly wage is more than 80% of the gross weekly wage earned in the academic year or term which preceded the weeks of unemployment;

(b) The number of hours per week is more than 80% of the average number of hours worked per week in the academic year or term which preceded the weeks of unemployment; and

(c) The employment involves substantially the same skill level and knowledge as the employment in the academic year or term which preceded the weeks of unemployment.

Again, the employee's base period services with Kenosha were as a full-time teacher, therefore the Racine reasonable assurance of substitute, "on-call" teaching was not reasonably similar to constitute "such services" and, therefore, she did not have overall or total reasonable assurance. However, on July 19, 2006 (week 29), when the employee signed a contract with Racine to be a full-time kindergarten teacher for the 2006/2007 academic year, she had overall/total reasonable assurance of "such services," the services which contributed to her base period wages, and which involved working as a full-time kindergarten teacher for Kenosha.
 

Reasonable Assurance as applied to Racine

A similar analysis applies to Racine; the employee performed services as a substitute teacher for Racine in the 2005/2006 academic year and while Racine did provide her with reasonable assurance of substitute teaching for the 2006/2007 academic year, which was similar to her 2005/2006 services, that work was not similar to her base period services and lacked overall/total reasonable assurance. See Wanish. Yet, once the employee signed the contract with Racine to be a full-time teacher for the 2006/2007 academic year, on July 19, 2006 (week 29), she had overall/total reasonable assurance of "such services."

The commission believes this approach is a reasonable construction effectuating the purpose of Wisconsin Unemployment Act, namely to "ameliorate the economic hardship and social costs of unemployment" when read with the reasonable assurance provisions found at Wis. Stat. § 108.04(17). See Wanish at 908, citing Leissring v. DILHR, 115 Wis. 2d 475, 484, 340 N.W. 2d 533, 537 (1983). 
 

Effect of the Reasonable Assurance Findings on Eligibility

Both the Wisconsin Statutes and Federal Provisions providing a basis for the reasonable assurance denials are essentially silent as to the implementation of such findings. In particular, Wis. Stat. § 108.04(17)(j) provides,

A school year employee who did not establish a benefit year prior to becoming ineligible to receive benefits under pars. (a) to (i) may establish a benefit year on or after that date if the school year employee qualifies to establish a benefit year under s. 108.06 (2) (a), but the wages paid the school year employee for any week during which pars. (a) to (i) apply shall be excluded from the school year employee's base period wages under sub. (4) (a) and ss. 108.05 (1) and 108.06 (1) for any week during which pars. (a) to (i) apply. A school year employee who established a benefit year prior to becoming ineligible to receive benefits under pars. (a) to (i) may receive benefits based on employment with other employers during the benefit year only if he or she has base period wages from such employment sufficient to qualify for benefits under sub. (4) (a) and ss. 108.05 (1) and 108.06 (1) for any week during which pars. (a) to (i) apply.

Wis. Stat. § 108.06(1) references the reasonable assurance provisions, in relevant part, as follows:

...Except as provided in sub. (6) and ss.108.141 and 108.142, if a claimant's base period wages are reduced or canceled under s. 108.04(5) or (18), or suspended under s. 108.04(1)(f), (10)(a), or (17), the claimant may not receive total benefits based on employment in a base period greater than 26 times the claimant's weekly benefit rate under s. 108.05(1) or 40% of the base period wages not reduced, canceled or suspended which were paid or payable to the claimant, whichever is lower.

In order to ensure that the implementation of the Commission's reasonable assurance decisions comports with the Commission's intent in such decisions, the commission now addresses the effect of the reasonable assurance findings in this matter.

In particular, it appears that the base period wages in school year employment from Racine may be handled in two ways:

1. the employee's base period wages shall include the school year employment wages from both Kenosha and Racine, as originally computed when her benefit claim was first filed, or

2. the employee's monetary computation shall be recomputed after excluding the school year employment wages from Racine but not Kenosha.

Essentially this highlights the issue of whether a portion of the claimant's school year employment shall be removed from her monetary computation when there is reasonable assurance with one school in the base period but that limited reasonable assurance before and after the break is not sufficient to constitute overall/total reasonable assurance when compared to the base period employment.

The commission has determined that in cases involving a lack of overall/total reasonable assurance that all school year employment shall remain in the base period and be included in determining monetary entitlement. In particular, and as mentioned earlier, the focus of the reasonable assurance provisions is upon the type of services performed and was not created as a "per employer" denial. ⁽⁹⁾

Moreover, Wis. Admin. Code provision § DWD 132.04(3) provides, as follows:

EFFECT ON ELIGIBILITY. (a) If the employment for which the claimant receives assurance is not reasonably similar under sub. (2), the claimant is eligible for benefits based on services provided to or on behalf of an educational institution between academic years or terms or during established and customary vacation periods or holiday recesses under s. 108.04 (17) (a), (b), and (c), Stats., if otherwise qualified.

(b) If the employment for which the claimant receives assurance is reasonably similar under sub. (2), the claimant is not eligible for benefits based on services to or on behalf of an educational institution between academic years or terms or during established and customary vacation periods or holiday recesses under s. 108.04 (17) (a), (b), and (c), Stats.

The above language in subsection (a) does not distinguish between the types of services provided in the base period, it merely states that the claimant is eligible. In Unemployment Insurance Program Letter (UIPL) 34-80, dated June 5, 1980, the procedure was explained, with emphasis, as follows:

A State is responsible for identifying wages as earned in employment with an educational institution and for identifying wages earned in non-school employment.

A determination of the amount of benefits payable between terms when there are both school and non-school wage credits is accomplished through an adjusted monetary determination recomputing the individual's benefit rights based solely on the non-school employment and earnings in the claimant's base period. All of the monetary eligibility criteria under the State's law must be considered in the recomputation, including weeks of work and qualifying wage requirements. The result may be a valid claim, a reduced weekly benefit amount and maximum entitlement, no change in the weekly benefit amount or maximum entitlement, or an increased weekly benefit amount and maximum entitlement, depending on the claimant's situation and the provisions of the State law. . .

...In effect, there will be two sets of WBAs [week benefit amounts] and MBAs [maximum benefit amounts] - one to be applied during periods when there is no between-terms denial and one to be applied during between-terms denial periods. . .

The above instructions and procedures are also applicable to a determination of the amount of benefits payable during an established and customary vacation period or holiday recess under Section 3304(a)(6)(A)(iii) of the Social Security Act when there are both school and non-school wage credits. The same considerations apply as well to service performed in an educational institution in the employ of an educational service agency as permitted in Section 3304(a)(6)(A)(iv).

The above reference to "two sets" suggests to the commission that only two base period computations are to be created, one including all school year employment and one excluding all school year employment. The commission realizes that such an approach may result in charging of benefits to a school year employer which has given limited reasonable assurance, such as Racine here. However, to exclude the Racine wages actually undermines the intent of the reasonable assurance provisions by reducing the claimant's eligibility (even to zero), if limited reasonable assurance employment makes up enough of the base period wages. Again, the commission finds that the intent of the reasonable assurance provisions is upon the type of services not the specific school year employer. Further, while the commission recognizes that on the surface it may seem inequitable to be charged for a portion of the claimant's benefits when the school district has provided limited reasonable assurance, the commission believes that these limited number of situations will be offset by the situations in which a school district falls within a base period, has failed to provide any reasonable assurance and yet benefits by another school district's reasonable assurance, i.e, Kenosha benefited in this case as of week 29 of 2006. In particular, when there is total/overall reasonable assurance all school year employment is removed from the base period.

As such, the commission directs that the employee's school year employment base period wages from Kenosha and Racine be used to compute her unemployment insurance benefits in weeks 23 through 28. However, due to the overall/total reasonable assurance in week 29, those wages must be excluded as of that week in determining her eligibility. Consequently, the employee was not eligible for unemployment benefits as of week 29 and was paid benefits totaling $1,695 to which she was not entitled.  
 

Application of Waiver of Repayment Provisions

The next issue to be decided is whether the employee must repay the erroneously paid benefits.

There is no evidence of employer fault, either from Kenosha or from Racine, in the erroneous payment of the benefits. Similarly, there is no evidence of employee fault in the overpayment. Instead, the payment of these benefits was due to the appeal tribunal decision regarding Kenosha. The commission finds that the decision to conduct the appeal tribunal hearings separately, and to ignore the Racine assurances of work in the 2006/2007 academic year, constituted departmental error requiring waiver of the repayment.

The commission therefore finds that for Kenosha, Hearing No. 06605019RC, the employee performed services in an instructional, research, or principal administrative capacity during the 2005/2006 academic year, but that in weeks 23 through 28 of 2006 the employee did not have overall/total reasonable assurance of performing such services in the 2006/2007 academic year, but that as of week 29 of 2006 the employee did have overall/total reasonable assurance of performing such services in the 2006/2007 academic year.

The commission further finds that for Racine, Hearing No. 06605020RC, the employee performed services in an instructional, research, or principal administrative capacity during the 2005/2006 academic year, but that in weeks 23 through 28 of 2006 the employee did not have overall/total reasonable assurance of performing such services in the 2006/2007 academic year, but that as of week 29 of 2006 the employee did have overall/total reasonable assurance of performing such services in the 2006/2007 academic year.

The commission finally finds that recovery of the overpaid benefits is waived under Wis. Stat. § 108.22(8)(c), because the overpayment did not result from the fault of the claimant or the employer as provided in Wis. Stat. § 108.04(13)(f) and the overpayment was a result of department error within the meaning of Wis. Stat. § 108.02(10e)(a) and (b).

The Kenosha decision of the administrative law judge is modified to conform with the above, amended as to weeks of issue and, as modified and amended, is affirmed in part and reversed in part. The Racine decision of the administrative law judge is modified to conform with the above, amended as to weeks of issue and, as modified and amended, is reversed in part and affirmed in part. Accordingly, in weeks 25 through 28 of 2006, the employee is eligible for benefits based upon her base period school year employment with Kenosha and Racine, if otherwise qualified. As of week 29 of 2006, she is not eligible for benefits based upon those wages. The employee has been overpaid benefits but recovery of the overpayment is waived.

Dated and mailed April 13, 2007
coronsa . urr : 150 ET 481  BR 335

/s/ James T. Flynn, Chairman

/s/ Robert Glaser, Commissioner

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(1)( Back ) As will be referenced later, the underlined "any" was not in the original provisions but was altered by Wisconsin Act 197, effective April 25, 2004.

(2)( Back ) "A school year employee of an educational institution who performs services in an instructional, research or principal administrative capacity . . ." Wis. Stat. § 108.04(17)(a).

(3)( Back ) In 2003, Wisconsin Act 197, changed the language of Wis. Stat. §108.04(17) from "a" or "an" to "any" effective April 25, 2004, to clarify any issues of intent and conform to the Federal provisions.

(4)( Back ) The Department of Labor, Unemployment Insurance Program Letter (UIPL) No.04-87, Part 4 page 2 (December 24, 1987), explained that:

The unemployment compensation program is intended in part to relieve the impact of involuntary unemployment on the claimant. The between and within terms denial provisions in Section 3304(a)(6)(A) reflect this in that they do not totally prohibit employees of educational institutions from receiving unemployment benefits between or within academic years. These provisions were created to prevent an employee with a reasonable assurance of resuming employment in the next ensuing academic period from receiving benefits during certain holiday and vacation periods or between academic years or terms. The provisions of Section 3304(a)(6)(A) have, therefore, been interpreted (1) to require denial of benefits to claimants between and within academic years who have a reasonable assurance of resuming employment in the next ensuing academic period and (2) to require the payment of benefits to otherwise eligible claimants who do not have a reasonable assurance or who have wage credits not earned in employment to which the between and within terms clauses apply.

(5)( Back ) The composite approach set forth in Fetzer requires the comparison of the employee's total preceding school year employment with all of the assurance of work for the next year, using the following three factors:

1. determining the length and type of teaching assignments in the preceding school year;

2. determining what percentage of the employee's total school year employment consisted of long-term teaching assignments; and

3. determining the type and duration of substitute teaching assignments assured in the next year.

(6)( Back ) Although the commission order directed the taking of additional evidence regarding the nature of the employee's base period employment, no additional evidence was taken by the ALJ on that issue. Departmental records reflect base period wages from Racine and Kenosha, yet it is unclear whether all those wages were earned in "school year employment."

(7)( Back ) It appears based upon the initial determinations in this matter that the department is not applying the Wanish base period analysis to between terms situations, when the break occurs between academic years. In fact, it is unclear whether the department is comparing the post break services to the base period in any situations other than customary vacation periods involving substitute teachers. Yet, this appears to be in conflict with the department's own petition in this matter which cites to Wanish to support its contention of no reasonable assurance with Racine. While the Court of Appeals in Wanish dealt with the specific factual situation of a substitute teacher's reasonable assurance over a customary break, it is the Commission's opinion that the Court's analysis of the meaning of "such services" would apply to all parallel statutory provisions using the "such services" language. In fact, the commission has consistently taken this approach, analyzing base period services for a customary vacation period for a less than full-time contracted percent position using Wanish, see Rein Steingrabe v. Hustisford School District, UI Dec. Hearing No. 05600905WB (LIRC October 6, 2005), Rein Steingrabe v. Hustisford School District, UI Dec. Hearing No. 04611343WB (LIRC August 10, 2005); Weiler v. UW Madison, UI Dec. Hearing No. 05001829MD (LIRC July 15, 2005); and a substitute teacher between academic years, see Kelly v. Westby Area Schools, Kickapoo Area School District, Richland School District and Viroqua Area School District, UI Dec. Hearing Nos. 04003695LX, 04003696LX, 04003697LX and 04003698LX (LIRC February 25, 2005).

(8)( Back ) These Code provisions are not limited to substitute teachers or between terms; instead the language specifically applies to "the academic year or term immediately following the weeks of unemployment which occurred between academic years or terms or during an established and customary vacation period or holiday recess." See Wis. Admin. Code § DWD 132.04(2).

(9)( Back ) Unemployment Insurance Program Letter (UIPL) 34-80, dated June 5, 1980, provided in discussion point 4,

The denial provisions pertain only to benefits based on school service. If a claimant has sufficient non-school employment and earnings in the base period to qualify for benefits, these benefits would be payable during the between-terms denial period if the claimant were otherwise eligible. The denial applies not to compensation based on any covered employment but only to compensation for services performed as a school year employee. Since compensation is based only on base period employment, the denial must apply only to the amount of benefits based on school service performed in the base period. An individual who has participated in the labor force in a capacity other than as a school employee cannot be denied benefit entitlement base on the non-school work simply because of also being a school employee...

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