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

JEFFREY KUBA, Employee

TOWN OF NORWOOD-
LANGLADE COUNTY, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing Nos. 08200210WU and 082000209WU


PROCEDURAL HISTORY

Initial Determinations

On November 2, 2007, determination number 070415675 was issued finding that as of week 43 of 2006, the claimant's services for the employer, a government unit or Indian tribe were not covered by the Wisconsin unemployment insurance law because he was an official elected by vote of the public. Consequently, no benefits were payable based upon work performed for the employer and there was a $920 overpayment that the claimant was to repay; repayment was not waived because the overpayment was not due to departmental error. Additionally, the determination found that benefits were erroneously paid because the employer did not question eligibility on a required report, Form UCB-23 and benefits erroneously paid from October 22, 2006 through November 3, 2007 would be charged to the employer.

On November 2, 2007, another determination, number 070415635 was issued finding that as of week 44 of 2005, the claimant's services for the employer, a government unit or Indian tribe were not covered by the Wisconsin unemployment insurance law because he was an official elected by vote of the public. Consequently, no benefits were payable based upon work performed for the employer and there was a $1,000 overpayment that the claimant was to repay; repayment was not waived because the overpayment was not due to departmental error. Additionally, the determination found that benefits were erroneously paid because the employer did not question eligibility on a required report, Form UCB-23 and benefits erroneously paid from October 30, 2005 through November 3, 2007 would be charged to the employer.

Appeals and Hearings

The claimant timely appealed the determinations on November 13, 2007. Departmental records reflect that the adjudicator was subsequently notified that the overpayment totals were incorrect but the adjudicator could not amend the amounts because the matters were under appeal.

On December 10, 2007, administrative law judge (ALJ) LeAnn Prock conducted the hearings in these matters. For the hearings, the employee appeared but the employer did not. On December 14, 2007, ALJ Prock issued two appeal tribunal decisions (ATDs). Specifically, the ATD for hearing number 07202018WU, found that as of week 44 of 2006:

(1) the claimant was an official elected by vote of the public and his services for the employer were not covered, within the meaning of Wis. Stat. § 108.02 (15)(f),
(2) the claimant was paid benefits in the amount of $1,108 for which he was not eligible and to which he was not entitled and the entire amount must be repaid because the overpayment was not because of any error by the department and/or was caused partially or wholly by the employee, within the meaning of Wis. Stat. §§ 108.03(1), 108.22(8)(a) and 108.22(8)(c), and
(3) the employer failed to file a required report in a timely manner within the meaning of Wis. Stat. § 108.04(13).

The ATD for hearing number 07202019WU, found that as of week 44 of 2005:

(1) the claimant was an official elected by vote of the public and his services for the employer were not covered, within the meaning of Wis. Stat. § 108.02 (15)(f),
(2) the claimant was paid benefits in the amount of $1,314 for which he was not eligible and to which he was not entitled and the entire amount must be repaid because the overpayment was not because of any error by the department and/or was caused partially or wholly by the employee, within the meaning of Wis. Stat. §§ 108.03(1), 108.22(8)(a) and 108.22(8)(c), and
(3) the employer failed to file a required report in a timely manner within the meaning of Wis. Stat. § 108.04(13).

Actions regarding Employer's Failure to Appear

On December 26, 2007 the hearing office received a letter from the employer regarding its failure to appear and seeking new hearings on the merits. On January 9, 2008, ALJ Prock sent a letter to the parties explaining that hearings on the failure to appear issues would be scheduled.

On January 25, 2008, the hearings, hearing numbers 08200045EC(1) and 08200046EC(2) were held on the issue of the employer's failure to appear; the hearings had been rescheduled from January 23, 2008. On January 29, 2008, ALJ Prock issued two ATDs finding good cause for the employer's failure to appear at each hearing, setting aside her earlier decisions and scheduling new hearings on the merits.

New Hearings and Decisions on the Merits

On February 27, 2008, the new hearings on the merits were conducted by ALJ Larson.(3) The hearings were continued and completed on March 24, 2008. On March 28, 2008, ALJ Larson issued two ATDs. The ATD for hearing number 08200209EC, held that as of issue week 43 of 2006:

(1) the claimant was an official elected by vote of the public and his services for the employer were not covered, within the meaning of Wis. Stat. § 108.02(15)(f),
(2) the claimant was paid benefits in the amount of $1,108 for which he was not eligible and to which he was not entitled and the entire amount must be repaid because the overpayment was not because of any error by the department and/or was caused partially or wholly by the employee, within the meaning of Wis. Stat. §§ 108.03(1), 108.22(8)(a) and 108.22(8)(c), and
(3) the employer failed to provide correct and complete information on a required report within the meaning of Wis. Stat. § 108.04(13).

The ATD for hearing number 08200210EC, held that as of week 44 of 2005:

(1) the claimant was an official elected by vote of the public and his services for the employer were not covered, within the meaning of Wis. Stat. § 108.02(15)(f),
(2) the claimant was paid benefits in the amount of $1,314 for which he was not eligible and to which he was not entitled and the entire amount must be repaid because the overpayment was not because of any error by the department and/or was caused partially or wholly by the employee, within the meaning of Wis. Stat. §§ 108.03(1), 108.22(8)(a) and 108.22(8)(c), and
(3) the employer failed to provide correct and complete information on a required report within the meaning of Wis. Stat. § 108.04(13).

A timely petition for review was filed for each appeal tribunal decision. The commission has considered the petitions and the positions of the parties, and it has reviewed the evidence submitted to ALJ Larson. Based on its review, the commission combines the matters into one decision for both hearing numbers and makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The claimant performed services as a Town Clerk, an elected official for the Town of Norwood-Langlade County (Town) from April 2003 to April 2007. For his services for the employer, he was paid an annual salary of $4,000. In his capacity as Town Clerk, the claimant was responsible for completing forms sent to the Town by the Unemployment Insurance Division; those forms included Quarterly Tax/Contribution Reports, Separation Notices and Wage Verification Eligibility Reports.

In addition to the claimant's services for the Town, he has worked on a seasonal basis for the Department of Natural Resources (DNR). On October 27, 2005 (week 44), after being laid off from work with the DNR, the claimant contacted the unemployment insurance department to initiate a claim for unemployment insurance benefits He reported his work for the DNR and his work and position as Town Clerk for the employer. He was not asked if he was an elected official for the Town.

On October 28, 2005, the Town was sent a UCB-16 Separation Notice, questioning whether any eligibility issues should be raised regarding the claimant's claim for benefits. The reverse side of the notice listed a number of issues including, "excluded employment" but did not explain that elected officials of governmental units were in excluded employment. If there were issues, the form was to be returned. The claimant, in his position as Town Clerk, did not return the form.

Based upon the claim initiation date, the base period for determining the claimant's monetary eligibility for benefits was the third quarter of 2004 through the second quarter of 2005. For that base period, wages of $4,107.50 were reported as base period wages on the Quarterly Tax/Contribution Reports; the claimant signed the reports as Town Clerk for the first and second quarters of 2005. The reports direct that, "MONTHLY DATA SHOULD COUNT ALL FULL-TIME AND PART-TIME WORKERS IN COVERED EMPLOYMENT . . ."

For purposes of reporting wages from the employer on the claimant's weekly claims for unemployment insurance benefits, an Unemployment Insurance representative advised the claimant to divide his salary into weekly amounts and report them as wages earned each week. He did so; the claimant filed weekly claims for benefits for weeks 44 of 2005 through 15 of 2006, each week reporting $76.92 in wages from the employer. He was paid unemployment insurance benefits totaling $5,135 for that benefit year.

On October 29, 2006 (week 44), after again being laid off from work with the DNR, the claimant contacted the unemployment insurance department to initiate a new claim for unemployment insurance benefits He again reported his work for the DNR and his work and position as Town Clerk for the employer. He was not asked if he was an elected official.

On October 30, 2006,(4) the Town was sent another UCB-16 Separation Notice, questioning whether any eligibility issues should be raised. Again, the reverse side of the notice listed a number of issues including, "excluded employment" but did not explain that elected officials of governmental units were in excluded employment. The claimant, in his position as Town Clerk, did not return this form.

Based upon the claim initiation date, the base period for determining the claimant's monetary eligibility for benefits was the third quarter of 2005 through the second quarter of 2006. For that base period, the claimant submitted quarterly wage reports on behalf the Town, reporting total wages of $4,000 in the claimant's base period.

The claimant filed weekly claims for benefits for weeks 43 of 2006 through 15 of 2007 and week 42 of 2007, reporting $76.92 in weekly wages from the employer for weeks 43 through 15. He was paid a total of $5,128 for that benefit year.

For each week that the claimant filed for unemployment insurance benefits and reported wages from the Town, the Town was sent a Wage Verification Eligibility Report, a UCB-23, reflecting the wages as reported by the claimant. Similar to the UCB-16 Separation Notice, the report was to be returned if additions were noted or corrections made. These reports were also not returned by the claimant in his capacity as Town Clerk.

When the claimant reopened his benefit year by filing a claim for benefits on October 23, 2007 (week 43) and sought benefits for week 42, the new Town Clerk for the employer questioned the claimant's eligibility as an elected official. A departmental representative contacted the claimant and asked him whether he was an elected official when he served in his capacity as Town Clerk. The claimant readily agreed he was an elected official. Based upon this, the Unemployment Insurance Division investigated the claimant's eligibility for benefits for the benefits he had received since week 44 of 2005.

The Unemployment Insurance Division provides employer information through a Handbook and the Internet. The 2006 handbook and the Internet explain that excluded employment includes service for a governmental unit in an elected position.

The issues before the commission are:

(1) Whether the claimant's services for the employer were in excluded employment and, if so, whether the monies paid to the claimant by the Town should be included in his base period wages?

(2) Whether benefits were erroneously paid to the claimant and, if so, how much was erroneously paid?

(3) How to treat the erroneously paid benefits?

(a) Is the employer at fault and should it be charged?
(b) Should an overpayment be created and should the claimant repay it?

Excluded Employment Issue

Wis. Stat. § 108.02(4m)(a) defines base period wages as "[a]ll earnings for wage-earning service which are paid to an employee during his or her base period as a result of employment for an employer."

Wis. Stat. § 108.02(15)(f) provides, in relevant part:

"Employment" as applied to work for a government unit or Indian tribe, except as such unit or tribe duly elects otherwise with the department's approval, does not include service:

1. As an official elected by vote of the public; . . .

As stated, neither party disputed that the claimant performed services for the employer, a government unit, as an official elected by vote of the public. Therefore, the payment the claimant received annually from the employer as Town Clerk may not be used as base period wages for either of his benefit years.

Were benefits erroneously paid and how much?

For the week 44 of 2005 claim, when the claimant initiated a claim for benefits in October 2005, his base period was the third quarter of 2004 through the second quarter of 2005. For this claim, he was paid benefits totaling $5,135.00.

Departmental records reflect that on December 19, 2007 a determination was issued computing that when the wages from the employer were removed from his base period, the claimant had base period wages totaling $9,552.50, with maximum benefits available of $3,821.00. Yet, the claimant had already been paid unemployment insurance benefits totaling $5,135.00; $5,135.00 minus $3,821.00 equals $1,314.00 in erroneously paid benefits.

For the week 43 of 2006 claim, when the claimant initiated a claim for benefits in October 2006, his base period was the third quarter of 2005 through the second quarter of 2006. For this claim, he was paid benefits totaling $5,128.00.

Departmental records reflect that on December 19, 2007 a determination was issued computing that when the wages from the employer were removed from the claimant's base period, he had base period wages totaling $10,050.13, with maximum benefits available of $4,020.00. Again, the claimant had been paid more than that amount, specifically $5,128.00; $5,128.00 minus $4,020.00 equals $1,108.00 in erroneously paid benefits.

Employer Fault/Concession of Liability

Wis. Stat. 108.04(13)(c) provides, with emphasis added,(5)

(c) If an employer, after notice of a benefit claim, fails to file an objection to the claim under s. 108.09 (1), any benefits allowable under any resulting benefit computation shall, unless the department applies a provision of this chapter to disqualify the claimant, be promptly paid. Except as otherwise provided in this paragraph, any eligibility question in objection to the 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 unless the benefits are erroneously paid without fault on the part of the employer. If, during the period beginning on January 1, 2006, and ending on June 28, 2008, an employer fails to provide correct and complete information requested by the department during a fact-finding investigation, but later provides the requested information, charges to the employer's account for benefits paid prior to the end of the week in which a redetermination is issued regarding the matter or, if no redetermination is issued, prior to the end of the week in which an appeal tribunal decision is issued regarding the matter, are not affected by the redetermination or decision, except as provided in par. (g).(6)  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 under s. 108.22 (8) (a). If benefits are erroneously paid without fault on the part of the employer, regardless of whether the employee is at fault, the department shall charge the benefits as provided in par. (d), unless par. (e) applies, and proceed to create an overpayment under s. 108.22 (8) (a). If benefits are erroneously paid because an employer is at fault and the department recovers the benefits erroneously paid under s. 108.22 (8), the recovery does not affect benefit charges made under this paragraph.

Wis. Stat. § 108.04(13)(e) is a parallel provision dealing with charging if benefits are paid from one employer's account due to fault of a second employer.

According to the above, if benefits are erroneously paid solely due to employer fault, the benefits will "stand as paid" with no overpayment created. If benefits are erroneously paid due to both employer fault and claimant fault, the erroneously paid benefits will be treated as overpaid, the employer will be charged and the claimant will be required to repay the overpayment.

Wis. Stat. 108.04(13)(f) and Wis. Stat. 108.04(13)(g)(7) define fault for employers and employees, providing as follows:

(f) If benefits are erroneously paid because the employer fails to file a report required by this chapter, fails to provide correct and complete information on the report, fails to object to the benefit claim under s. 108.09 (1) or aids and abets the claimant in an act of concealment as provided in sub. (11), the employer is at fault. If benefits are erroneously paid because an employee commits an act of concealment as provided in sub. (11) or fails to provide correct and complete information to the department, the employee is at fault.

(g) During the period beginning on January 1, 2006, and ending on June 28, 2008, if benefits are erroneously paid because an employer fails to provide correct and complete information requested by the department during a fact-finding investigation, the employer is at fault unless an appeal tribunal, the commission, or a court of competent jurisdiction finds that the employer had good cause for the failure to provide the information.

From an equitable standpoint, in terms of assigning fault, this case is complex given the claimant's dual role as agent, Town Clerk, for the employer, the Town, and his role as a claimant filing for unemployment insurance benefits.

The department witness claimed that the claimant as Town Clerk incorrectly completed the quarterly wage reports by listing his wages on those reports and failed to provide accurate information by failing to return the separation notices (UCB-16s), raising the excluded employment issue and by failing to return the weekly Wage Verification Eligibility Reports (UCB-23s), raising the excluded employment issue. The claimant agreed that he did report the monies paid to him on the quarterly wage reports and that he did not return the UCB-16s or the UCB-23s. Yet, he credibly denied any intent to deceive the Department by his actions or to receive monies he was not entitled to. In fact, as a claimant, he was instructed to report the monies paid to him as wages while he was filing weekly claims for benefits. Therefore, confusion regarding whether those monies constituted base period wages is understandable. The claimant further explained,

The form that the town gets after each weekly claim is filed is only mailed in if you have a problem with what's on it. If you don't know that there's a mistake it's hard to send it back. These town jobs are part-time jobs without high speed internet connections, computers and "everything else." Mistakes get made.

The State can't come up with the overpayment. They've made 2 revisions on it after it's been paid back and yet the town and I are being chastised because we made an error. I was not issued a penalty, but I do accept responsibility.

While the commission understands the limited resources available to the claimant as Town Clerk both in terms of Internet access and time, the employer provided incorrect and incomplete information to the Department. Parties are generally bound by the acts of their agents. Under the applicable "old" provision Wis. Stat. 𨳄.04(13)(g), the good cause exception only applies to failure to provide correct and complete information requested by the department during "a fact-finding investigation." Prior to that, no "good cause" provision existed. Since the claimant's failures as Town Clerk occurred prior to June 28, 2008 and the failures did not occur during a "fact finding investigation," the reason for the employer's failure does not matter. The employer is at fault and will be charged for the benefits that were erroneously paid.

The next step is to determine whether the claimant was at fault in his capacity as a claimant filing for unemployment insurance benefits.

In the claimant's capacity purely as a claimant for unemployment benefits, there is no evidence that he was ever asked if he was an elected official or that he otherwise failed as a claimant to provide correct and complete information to the department. He also followed instruction and also properly reported the monies he received as Town Clerk as wages for the purpose of collecting weekly unemployment insurance benefits. Further, there is no evidence that, as a claimant, he was ever advised that there was a difference in "base period wages" for computing benefits available and "wages" for purposes of computing weekly benefit entitlement.(8)  The commission further finds that the claimant's failures as the agent of the Town should not be treated as claimant fault. Specifically, the statute separates and sets forth individual requirements for each. The claimant's failure to provide "correct and complete" information on the employer forms is not equivalent to a failure to provide "correct and complete" information on claimant forms. As such, the claimant was not at fault in the erroneously paid benefits. Therefore, benefits will stand as paid with no overpayment created.

The commission therefore finds that for the benefit years beginning with claims in weeks 44 of 2005 and 43 of 2006,

(1) the claimant's services for the employer were in excluded employment within the meaning of Wis. Stat. § 108.02(15)(f) and, therefore, the monies paid to him for those services in the base period were not base period wages within the meaning of Wis. Stat. § 108.02(4m)(a),
(2) the claimant was erroneously paid benefits totaling $1,314.00 and $1,108.00 respectively, and that the erroneous payment was due to employer fault but not due to claimant fault and therefore benefits will "stand as paid" with the employer charged for the erroneously paid benefits, within the meaning of Wis. Stat. § 108.04(13)(f).

DECISION

The decision of the administrative law judge is modified to conform with the above findings and, as modified, is affirmed in part and reversed in part. Accordingly, the claimant's services were performed in excluded employment, the monies he was paid in that employment cannot be used as base period wages and because benefits were erroneously paid due to fault on behalf the employer but not the claimant, no overpayment will be created, benefits stand as paid, with the employer charged for the erroneously paid benefits.

Dated and mailed August 7, 2008
kubajef . urr : 150 : BR 319.1   ET 490

James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

 

NOTE: The commission's modification and partial reversal is not based upon a differing credibility analysis but is due to a differing legal conclusion regarding the elements of fault. In particular, the appeal tribunal did not specifically address the issue of claimant fault in the erroneous payment of benefits.


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Footnotes:

(1)( Back ) Assigned to determination number 070415635.

(2)( Back ) Assigned to determination number 070415675.

(3)( Back ) At the start of the hearings, ALJ Larson referenced the December 14, 2007 ATDs issued by ALJ Prock and incorporated the first three paragraphs (excluding the issue paragraphs) into the record.

(4)( Back ) While the departmental witness testified that the UCB-16 was mailed on October 21, 2006, the Departmental printout, Exhibit 1, reflects that the mailing of the UCB-16 occurred on October 30, 2006 which the commission finds to be consistent with the claim initiation date.

(5)( Back ) Portions of these statutes were altered with 2007 Wis. Act 59 but the changes are not applicable in this case as the failures to provide information occurred prior to June 28, 2008.

(6)( Back ) This sentence was added in 2005 Wis. Act 86. 2005 Wis. Act 86 also created the "good cause" provision, Wis. Stat. 108.04(13)(g).

(7)( Back ) In 2007 Wis. Act 59, additional language was added to Wis. Stat. 108.04(13)(f) and Wis. Stat. 108.04(13)(g) was repealed. The new law expanded the definition of a failure to provide information subject to the good cause provision; it now includes failure to file a required report, failure to provide correct and complete information on a report, failure to object to a benefit claim under Wis. Stat. 108.09(1), failure to provide correct and complete information requested by the department during a fact-finding investigation.

(8)( Back ) The definition of "base period wages" is found at Wis. Stat. 108.02(4m) while "wages" is defined at Wis. Stat. 108.02(26).

 


uploaded 2008/08/20