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

ELCANIA D PURIFOY, Employee

MILWAUKEE PUBLIC SCHOOL, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 11607715MW


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 employee has worked for the employer, a public school district, for approximately ten and a half years as a school safety assistant.

The employee was suspended without pay by the employer from March 9 through April 19, 2010 (weeks 11 through 17). On March 26, 2010 (week 11), the employee initiated a benefit claim. The employee was discharged on April 20, 2010 (week 17).

The employee grieved the termination, and an arbitration hearing was held. On May 6, 2011 (week 19), an arbitrator issued a decision directing the employer to reinstate the employee and to make him whole for earnings lost, "subject to the [employee's] duty to mitigate."

The employer calculated that its total back pay owed to the employee would be $32,867.52.

The employer is a reimbursable employer, which means that the department bills the employer directly for unemployment insurance benefits paid to current and former employees, and the employer reimburses the department dollar for dollar for the benefits which have been paid.

On June 1, 2011, the employer notified the department about the arbitrator's award. In an e-mail sent the same day, the department advised the employer, in part:

Based on the weekly wages you send to us, it will be determined if the claimant was completely or partially overpaid, but you should withhold $18462 from the Backpay to be given to Mr. Purifoy and send that amount to us with the official Backpay Award. If it is determined that he was not totally overpaid, we can refund what remains to him after we have applied the payment you sent to us to the total due. . . .

The following table reflects the weekly wages reported by the employer for the time period in question and how those wages affected the employee's eligibility for unemployment insurance in each week:

Week

Back Pay

UI Paid

UI Benefits

Due

UI Benefits

Overpaid

11/2011

$ 560.64

$ 363

$    7

$356

12

   700.80

   363

      0

  363

13

   700.80

   363

      0

  363

14

   700.80

   363

      0

  363

15

   700.80

   363

      0

  363

16

   700.80

   363

      0

  363

17

        -

   363

      0

    -

18

   560.64

   363

      7

  356

19

   700.80

   363

      0

  363

20

   140.16

   363

   289

    74

Total

Over-

Payment

 

 

 

 

$ 2,964

 On June 24, 2011, the employer sent the employee a check for $1,636.64. This represented his back pay award, minus payroll deductions, and minus the $18,462 in unemployment insurance benefits referenced above. On July 29, 2011, the employer issued a check to the department in the amount of $18,462 in satisfaction of its obligation to repay it for the employee's benefits.

The question to be decided is whether the employee received back pay in weeks 11 through 20 of 2011 that constitutes wages to be used in calculating unemployment insurance benefits.(1)

Wis. Stat. § 108.05(6) provides, as follows:

BACK PAY. The department shall treat as wages for benefit purposes any payment made to an individual by or on behalf of his or her employing unit to which that individual is entitled under federal law, the law of any state or a collective bargaining or other agreement and which is in lieu of pay for personal services for past weeks, or which is in the nature of back pay, whether made under an award or decision or otherwise, and which is made no later than the end of the 104-week period beginning with the earliest week to which such pay applies.

The appeal tribunal treated only the $1,636.64 the employee received from the employer after it subtracted unemployment insurance and taxes as back pay, concluding that the $18,462 that was paid to the department was not back pay because it was not actually paid directly to the employee. The appeal tribunal noted that the employer owed the $18,462 to the employee but instead paid it to the department. However, the statute does not require that, to be treated as wages, the back payment award be given directly to the employee in the manner contemplated by the appeal tribunal. Indeed, for purposes of the unemployment insurance law, "wages" refers to every form of remuneration payable, directly or indirectly, for a given period by an employing unit to an individual for personal services. Wis. Stat. § 108.02(26)(a).

The arbitrator's award required the employer to make the employee whole for earnings lost, subject to the employee's duty to mitigate. While the arbitrator did not specify that the employee's back pay award should be reduced by the amount of unemployment insurance he had already received, this was clearly contemplated as part of the duty to mitigate. Where the employer had already paid the unemployment insurance benefits to the employee, a failure to deduct those benefits from his back pay award would not merely have made him whole, but would have produced a windfall for the employee.

The commission, therefore, finds that the employee received back pay for weeks 11 through 20 of 2011, in the amounts listed above, within the meaning of Wis. Stat. § 108.05(6).

The commission further finds that the employee was paid unemployment benefits in the amount of $2,964, for weeks 11 through 20 of 2011, for which he was not eligible and to which he was not entitled after the back pay award, and that the overpayment that resulted from the back pay award has been satisfied.

The commission further finds that waiver of benefit recovery is not required under Wis. Stat. § 108.22(8)(c), because although the overpayment did not result from the fault of the employee as provided in Wis. Stat. § 108.04(13)(f), the overpayment was also not the result of a department error. See Wis. Stat. § 108.22(8)(c)2.

DECISION

The decision of the administrative law judge is reversed. Accordingly, the back pay to which the employee was entitled under the arbitrator's award for weeks 11 through 20 of 2011 must be treated as wages when calculating benefit eligibility. The employee received benefits in the amount of $2,964, which has been offset from his back pay award. The entire amount has been repaid.

Dated and mailed March 9, 2012

BY THE COMMISSION:


/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

NOTE: The commission did not confer with the administrative law judge about witness credibility and demeanor. The commission's reversal is not based upon an assessment of witness credibility.



purifel2 . urr : 164 : 9

cc: Attorney Janell Knutson - DWD


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uploaded 2012/04/27


Footnotes:

(1)( Back ) Weeks 11 of 2010 through 10 of 2011 are addressed in a separate decision, UI Hearing No. 11607714MW.