JENNY T VON FELDT, Employee

ROYAL CREDIT UNION, Employer

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:

The employee has worked and continues to work for the employer, a credit union. The employer has paid at least 80 percent of the employee's base period wages. The employee filed a claim for unemployment benefits in week 44 of 2010. She reported when making her weekly claim certification that she had worked 37:18 hours for the employer and earned $399.86 in wages in that week. Her pay rate in that week was the same or greater than the rate paid to her by the employer in the base period quarter in which the highest wages were received.

The department made a benefit payment to the employee in week 44 in the amount of $43. She also received FAC benefits for week 44. The department then sent a form UCB-23 wage verification/eligibility report to the employer and the employer returned that by the deadline raising the issue of the employee having worked for it in her base period.

The first issue to be decided is whether during the week(s) claimed, the employee worked for a base period employer at least 35 hours and/or could have earned wages equivalent to 35 hours of work had all of the available work been performed for the employer and/or received sick pay, holiday pay, vacation pay or termination pay from the employer equivalent to pay for at least 35 hours, at a pay rate that was the same or greater than the employer paid the employee during the highest base period quarter.

Wisconsin Stat. § 108.05 (3)(b) provides in part:

1. A claimant is ineligible to receive any benefits for a week if the claimant is engaged in employment with an employer from which the claimant was paid at least 80% of his or her base period wages and:

a. The claimant works for that employer at least 35 hours in that week at the same or a greater rate of pay, excluding bonuses, incentives, overtime or any other supplement to the earnings, as the claimant was paid by that employer in that quarter of the claimant's base period in which the claimant was paid his or her highest wages.

The employee agreed that the above provision applies in her case and she is not eligible for benefits in week 44 of 2010.

Having determined that the employee is ineligible for benefits because she worked over thirty-five hours for an employer that has paid at least 80 percent of her base period wages, it must also be determined whether she has received any benefits in error, the amount of those overpaid benefits, and whether those benefits must be repaid to the department.

Generally, a claimant who receives unemployment insurance benefits in error is required to repay those benefits to the department. However, current law provides that recovery of the overpaid benefits shall be waived if the overpayment occurred as the result of departmental error and if the overpayment was not caused by the claimant's fault or by a false statement or misrepresentation by the claimant. Wisconsin Stat. § 108.02 (10e) provides:

"Departmental error" means an error made by the department in computing or paying benefits which results from:

(a) A mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, whether by commission or omission; or

(b) (b) Misinformation provided to a claimant by the department, on which claimant relied.

The issue is whether the employee was overpaid as a result of department error.

The commission has previously affirmed decisions that found that the department's deliberate policy choice not to investigate this issue amounted to a department error of omission. In Chianelli v. C K Contract of Wisconsin Dells, U I Hearing 97000471BO (LIRC Mar. 31, 1998) and its companion cases Antonio v. C K Contract of Wisconsin Dells, U I Hearing 97000471BO (LIRC Mar. 31, 1998) and Templin v. C K Contract of Wisconsin Dells, U I Hearing 97000471BO (LIRC Mar. 31, 1998), the department petitioned appeal tribunal decisions which found that the department erred when it paid benefits to employees in violation of the 35/80 rule without any investigation despite employee certifications that indicated that the employees worked 35 or more hours in the week at issue. The department argued that it made an administrative decision not to ask the follow up questions necessary to resolve the issue when the employee initially indicated that she worked 35 hours or more.

The commission stated in Chianelli, "The commission is unconvinced that a purposeful decision to fail to investigate an eligibility issue, or delay investigating an eligibility issue, prevents a finding of department error. Certainly the department may decide that it does not wish to use its resources in making the 35/80 inquiry. The question here is not whether the department can make such a choice, but whether a claimant should be required to repay benefits if it is subsequently determined that benefits should not have been paid."

In this case, the employee certified that she worked at least 35 hours in the week at issue. At that point, the employee raised a potential eligibility issue. With other eligibility issues, investigations are triggered by claim certifications. The fact that the 35 hour assertion does not fully resolve the eligibility issue is not determinative. If the employee indicated that she quit or refused a job offer in her weekly claim, further investigation would be necessary to determine eligibility. Ultimately the issue might not be found disqualifying but when a disqualifying issue is raised by the employee, an investigation is required. The same rationale applies here. The fact that the department is obligated to promptly pay benefits when due does not excuse its failure to investigate eligibility issues when they are timely raised.

The commission therefore finds that in week 44 of 2010, the employee worked for an employer who had paid at least 80 percent of the employee's base period wages, during at least 35 hours; and/or could have earned wages equivalent to 35 hours of work had all of the available work been performed for the employer; and/or received sick pay, holiday pay, vacation pay or termination pay from the employer equivalent to pay for at least 35 hours, at a pay rate that was the same or greater than that paid by the employer to the employee in the base period quarter in which the highest wages were received, within the meaning of Wis. Stat. § 108.05(3)(b)1.

The commission further finds that in week 44 of 2010, the employee was paid benefits in the amount of $43 for which she was not eligible, within the meaning of Wis. Stat. § 108.03(1).

The commission further finds that recovery of the entire amount of erroneously paid benefits is waived 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), but was the result of a department error. See Wis. Stat. § 108.22(8)(c)2.

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

The commission did not consult with the administrative law judge regarding witness credibility and demeanor. The commission accepts the ALJ's findings and conclusions on the matter of the employee's eligibility. It reverses the administrative law judge's conclusion regarding department error as a matter of law.

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uploaded 2011/08/03