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

DILLON J PROULX, Employee

BISHOP FIXTURE & MILLWORK INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 11200951EC


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

The department's determination held that, as of week 41 of 2010, the employee was not eligible for extended training benefits because he had not exhausted all rights to unemployment benefits under all other state or federal programs, as required by Wis. Stat. § 108.06(7). The determination further found that the employee had been overpaid benefits in the amount of $3,213 that would have to be repaid to the department because the overpayment was not the result of departmental error and/or was caused by the employee's failure to provide correct and complete information to the department.

Department records show that the employee filed an initial claim for unemployment benefits on October 6, 2009 (week 41). The employee received regular benefits through week 10 of 2010, when those benefits were exhausted. At that time, the employee was enrolled in approved training and began receiving extended training benefits under Wis. Stat. § 108.06(7). He received extended training benefits for weeks 11 through 18 of 2010.

The employee reopened his benefit claim on September 29, 2010 (week 40). The employee reported to the department that he had been laid off by two Minnesota employers. The employee received extended training benefits for weeks 40 of 2010 through 11 of 2011, totaling $3,213. The employee stopped receiving those benefits in week 12 of 2011, because the department had discovered that, as of week 41 of 2010, the employee was eligible to begin a new benefit year in Wisconsin or Minnesota using a combined wage claim.

Wisconsin Stat. § 108.06(7) only allows payment of extended training benefits to an employee in approved training who has exhausted all rights to regular benefits, emergency compensation benefits, extended benefits, and any other state or federal benefits. Because the employee was entitled to regular benefits as of week 41 of 2010, the extended training benefits paid to him after week 40 of 2010 were paid to him in error.

The issue to be decided is whether the employee must repay the extended training benefits he received in error or whether recovery of the overpaid benefits must be waived.

The employee received extended training benefits after week 40 of 2010 in error because, when he reopened his claim in September 2010, the department's computer system was not programmed to review out-of-state wages to determine a claimant's eligibility. In addition, no one from the department looked to see whether the employee was eligible for regular benefits using a combined wage claim, despite the fact that the employee reported his separation from two Minnesota employers and he was at the end of his benefit year. The department has since programmed its computer system to check automatically for out-of-state wages when determining benefit eligibility. The computer system had not previously been programmed to run the automatic check due to the department's heavy workload and other priorities.

Wisconsin Statute § 108.22(8)(c) provides that the department shall waive the recovery of overpaid 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(l0e)(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, or from misinformation provided to a claimant by the department, on which the claimant relied.

The commission has previously found that the department's deliberate policy choice not to investigate potential out-of-state eligibility amounted to a department error of omission. In Victoria A. Terpstra, UI Dec. Hearing No. 02007748JV (LIRC March 28, 2003), the claimant was paid Temporary Extended Unemployment Compensation (TEUC) benefits in error because Wisconsin had not implemented a procedure to check with all of the other state unemployment insurance agencies before transferring a Wisconsin claimant, who had exhausted his or her regular Wisconsin unemployment benefit claim, to the federal extended benefit program. As a result, Wisconsin was not aware that the claimant had potential eligibility for additional regular benefits if she filed a claim with the state of Illinois. The resulting overpayment of TEUC benefits was waived by the commission, finding that "the department's failure to investigate whether the claimant met the eligibility requirements for receipt of TEUC constituted error on the part of the department as defined in Wis. Stat. § 108.02(10e)."

Likewise, in Pamela J. Berger, UI Dec. Hearing No. 03000631 (LIRC Aug. 20, 2003), the commission found departmental error where the department made a policy choice not to investigate TEUC issues which caused benefits to be overpaid to claimants who timely provided the department with the necessary information to make correct decisions regarding benefit entitlement when they arose. The department subsequently changed its practice.

In this case, the employee reopened his benefit claim in week 40 of 2010. He reported his Minnesota employers. He was at the end of his benefit year. The department should have determined whether the employee had sufficient wages in any state that would potentially entitle him to regular unemployment benefits. The department did not have a procedure in place to check automatically for out-of-state wages, and the department did not complete a manual check with other states for wages. As a result, the department paid extended training benefits to the employee in error from October 2010 through March 2011. The department's failure to investigate potential out-of-state eligibility in week 41 of 2010 amounted to a departmental error of omission.

The commission therefore finds that the employee was not eligible for extended training benefits beginning in week 41 of 2010 because he had not exhausted all rights to other unemployment benefits, within the meaning of Wis. Stat. § 108.06(7).

The commission further finds that the employee was paid extended training benefits in the amount of $3,213, 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 commission further finds that recovery of the entire amount of erroneously paid extended training 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 departmental error.

DECISION

The decision of the administrative law judge is modified to conform to the foregoing findings and conclusions and, as modified, is affirmed in part and reversed in part. Accordingly, the employee is ineligible for extended training benefits beginning in week 41 of 2010. The employee is not required to repay the sum of $3,213 to the Unemployment Reserve Fund.

Dated and mailed August 9, 2011
prouldi . urr : 152 : 5

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner


MEMORANDUM OPINION

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 ALJ's conclusion regarding departmental error as a matter of law.


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uploaded 2011/09/13