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

TERRY D FISK, Employee

UNEXPLAINED RESEARCH LLC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 10201942EC


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

When the employee began a claim for unemployment benefits in the year 2007, he was operating a publishing business with another individual on a partnership basis. He initially reported when filing claims for benefits that he was working. He was instructed at that point by department personnel that his partnership should actually be considered self-employment and that he should report not that he was working and earning wages but rather that he was self-employed. The employee followed these instructions throughout his benefit claim.

The publishing business was reorganized as of the week ending September 26, 2009 (week 39). At that point, it was converted to a corporation. It was arranged that the employee would receive a weekly salary of $250 from the corporation. The employee did not recognize the significance of this reorganization in relationship to his eligibility for unemployment insurance. He continued to report that he was self-employed as he had been originally instructed to. Because of this, the fact that the employee was receiving wages through a corporation was not recognized by the department and benefits continued to be paid to him.

The employee's weekly benefit rate was $151.00. At that benefit rate, he was not eligible to receive any benefits in any week in which his wages were as much as $250.00.
The commission finds that the employee was paid benefits in the amount of $3,020.00 for weeks 39 through 44 of 2009 and weeks 46 of 2009 through week 7 of 2010, 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 erroneously paid 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 employee did not report to the department that his partnership had been reorganized to a corporation based on information provided in the Handbook for Claimants(1) which states:

Were you self-employed?

▪   Answer "YES" if you are self-employed or operating your own business, i.e. farming, partnership, LLC or corporation.

* * * *

Some activities are not considered "work" and the income from these activities is not treated as wages. Do not report the following activities as "work" on your weekly claim certifications, and do not report the income from these activities as wages:

▪   Self-employment

pp. 29 and 21.

The above information clearly instructed the employee to report that he was self-employed if he was operating his own business as a corporation. The information further informed the employee that the services he performed for the corporation should not be reported as "work" on his weekly claim certification. The overpayment was caused by misinformation that the department provided to the employee on which he relied.

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).

DECISION

The decision of the administrative law judge is affirmed in part and reversed in part. Accordingly, the employee is ineligible for benefits in weeks 39 through 44 of 2009 and weeks 46 of 2009 through week 7 of 2010. He is not required to repay the sum of $3,020.00 to the unemployment reserve fund.

Dated and mailed December 13, 2010
fiskter : 132 : 5 : BR 335.04

James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION

The commission did not consult with the ALJ regarding witness credibility and demeanor. The commission's partial reversal of the ALJ's decision is based on the employee's unrebutted testimony.



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uploaded 2011/01/14


Footnotes:

(1)( Back ) This is the phrasing that appeared in the Handbook for Claimants revised in September of 2006.