STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126
http://dwd.wisconsin.gov/lirc/

LISA A HOLLETT, Employee

DOUGLAS C SHAFFER, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing Nos. 13003690MW AND 130003691MW

On November 8, 2013, an administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development (department) issued two appeal tribunal decisions in this matter.

The employee filed a timely petition for commission review. The commission considered the petition, reviewed the evidence submitted to the ALJ, and issued a decision on February 7, 2014, reversing the appeal tribunal decisions.

Within 28 days after that decision was mailed to the parties, the department filed a Request for Reconsideration. Pursuant to its authority under Wis. Stat. § 108.09(6)(b) and (d), the commission set aside its February 7, 2014, decision for purposes of reconsideration.

The commission now makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

A de novo hearing before an ALJ sitting as an appeal tribunal for the department was held by telephone on November 6, 2013. The employer's fiscal agent and the employee appeared. During their testimony, several documents were marked by the ALJ as Exhibits 1 through 6, which were later received into evidence. No one appeared at the hearing to testify on behalf of the department.

Facts Adduced at Hearing

Exhibit 2, an "ADJUDICATORS PRELIMINARY CLAIMANT REPORT," is a report summarizing the employee's unemployment claiming history. This report shows that:

After an individual files a new claim for unemployment benefits, several documents are mailed out automatically from the department's computer system. Among those documents are a claim confirmation, work search instructions, and, until June 20, 2013, a Handbook for Claimants.(3) Exhibit 4 consists of three FORMS SENT INQUIRY SCREENs, which list unemployment documents sent to the employee and to her former employers. Exhibit 4 shows that the employee was most recently mailed a Claim Confirmation with Work Search Requirements, FORM TYPE 10148, on
November 10, 2012. Exhibit 3 is a copy of the Handbook for Claimants with a revision date of October 2012.

When the employee opened her claim in week 45 of 2012, she was providing supportive and personal care services in her home to Douglas Shaffer, an elderly man with disabilities. The employee had been caring for Mr. Shaffer since week 23 of 2012. Mr. Shaffer used a fiscal agent, Iris Financial Services, to pay for the services he received. The employee was paid $12.07 per hour for personal care and $9 per hour for supportive care services. Mr. Shaffer died on February 1, 2013 (week 5).

The employer's fiscal agent reported that the employee earned wages for the care she provided to Mr. Shaffer as follows:

Week

Hours worked

Wages earned

46/12

29

$300.91

47/12

31.5

$315.74

48/12

29.5

$300.80

49/12

33

$333.84

50/12

35

$357.98

51/12

28

$284.26

52/12

28

$284.26

1/13

36

$357.98

2/13

36

$357.98

3/13

28

$284.26

4/13

28

$284.26

5/13

20

$203.02

Exhibit 5 shows that the employee, when completing her weekly claims certification for unemployment benefits for weeks 45 of 2012 through 5 of 2013, answered "No" to Question No. 4, "During the week, did you work or did you receive or will you receive sick pay, bonus pay, or commission?" The employee completed her claims using the department's telephone Interactive Voice Response (IVR) system.

The department detected the discrepancy between wages reported by the employer's fiscal agent for the employee and the employee's claims history. A department adjudicator interviewed the employee by telephone concerning the discrepancy on September 20, 2013. Exhibit 6 is the adjudicator's summary of the interview. The ALJ asked the employee whether Exhibit 6 was an accurate summary of the employee's statement to the adjudicator. The employee testified that Exhibit 6 did not reflect her exact verbiage and seemed to be edited. She could not remember exactly what verbiage she used when speaking with the adjudicator.(4)

The employee has a bachelor's degree. She read the Handbook for Claimants that she received but explained to the ALJ that reading it and understanding it are two different things. The employee further explained that she answered "No" to Question No. 4, because she believed that the question applied to the employer from which she had been laid off (White Rose Inns). The employee believed that she was receiving unemployment benefits from that employer to replace some of the income that she had lost as a result of the layoff. In addition, the employee did not consider caring for Mr. Shaffer in her home to be "work." She did not call the department with questions, because she thought that she was providing accurate information and was filing her claims correctly. When the employee was informed that she had misinterpreted the reporting requirements, she mailed a check for $2,076.00 to the department to reimburse the department for the benefits she had been paid while Mr. Shaffer was alive.

Issues

The issues to be decided are whether the employee worked and earned wages in weeks 45 of 2012 through 5 of 2013, whether she concealed her work and wages for those weeks, whether she received benefits to which she was not entitled and which she must repay, and whether any concealment penalties or future benefit reductions must be assessed.

Standards and Burden of Proof of Concealment

Claimants who file for unemployment insurance benefits are responsible for correctly and completely reporting information for each week they claim benefits, because benefits are initially paid based on the information claimants provide. Claimants who conceal information from the department when filing for benefits may be subject to overpayments and penalties. For unemployment insurance purposes, conceal means "to intentionally mislead or defraud the department by withholding or hiding information or making a false statement or misrepresentation."(5)

A claimant who conceals work performed or wages earned when filing a weekly claim certification is ineligible to receive benefits for the week claimed.(6) In addition, a claimant who conceals work performed, wages earned, or another material fact concerning benefits eligibility when filing a weekly claim certification is ineligible for benefits in an amount equivalent to two, four, or eight times the claimant's weekly benefit rate for each act of concealment.(7) This ineligibility is applied against benefits and weeks of eligibility for which the claimant would otherwise be eligible after the week of concealment.(8) Furthermore, consistent with federal directives, the department assesses a penalty against the claimant in an amount equal to 15 percent of the benefits erroneously paid to the claimant as a result of one or more acts of concealment.(9)

A claimant is presumed eligible for unemployment insurance benefits, and the party resisting payment must prove disqualification.(10) The burden to establish that a claimant concealed information is on the department.(11) As a form of fraud, concealment must be proven by clear, satisfactory, and convincing evidence.(12)

The unemployment insurance law must be "liberally construed to effect unemployment compensation coverage for workers who are economically dependent upon others in respect to their wage-earning status."(13) Laws imposing forfeitures, by contrast, must be strictly construed to narrow the range of acts that will lead to the harsh result of a forfeiture.(14) As a result, concealment will not be found where a claimant makes an honest mistake or misinterprets information received from the department.(15) Concealment requires an intent or design to receive benefits to which the claimant knows he or she is not entitled.(16)

The existence of fraud in the form of concealment must be resolved on a case-by-case basis. Because direct proof of a claimant's intent is rarely available, fraud may be proven by indirect (circumstantial) evidence and reasonable inferences drawn from the facts. There is a rebuttable presumption that parties intend the natural consequences of their actions.(17)

Analysis

In any case where concealment is an issue, the commission first determines whether there is sufficient direct evidence of concealment, such as an admission by the claimant, to conclude that the claimant intended to mislead or defraud the department to receive benefits to which the claimant knew he or she was not entitled. If there is not sufficient direct evidence of concealment, the commission then looks to see whether there is sufficient indirect evidence from which the commission can infer an intent on behalf of the claimant to mislead or defraud the department in order to receive benefits to which the claimant knew he or she was not entitled. Few cases contain direct evidence of concealment; most cases must rely on indirect evidence and the inferences that can be drawn from that evidence to establish concealment.

Review of the indirect evidence generally involves the following inquiry:

1. Did the claimant file a claim for each week at issue?
2. Did the claimant provide incorrect information to the department in filing the claim?
3. Were benefits improperly paid to the claimant as a result of the incorrect information?
4. Do the circumstances create an inference that the claimant intentionally provided incorrect information in order to obtain benefits to which the claimant was not entitled?

Generally, in analyzing whether a claimant obtained benefits to which he or she was not entitled and should be required to repay, only questions (1), (2), and (3) are relevant. However, in analyzing whether a claimant engaged in concealment, which requires a showing by clear and convincing evidence that a claimant intentionally misled or defrauded the department in order to obtain benefits to which the claimant knew he or she was not entitled, and which results in the imposition of a monetary penalty over and above the repayment of benefits, question (4) must be answered as well. An inference of concealment is not created by a mere showing that a claimant provided an incorrect answer when filing a claim.

If the evidence presented by the department does not suggest that the claimant intentionally provided an incorrect answer in order to obtain benefits to which the claimant knew he or she was not entitled, the inquiry ends. No concealment will be found.(18)

If the department presents sufficient evidence to create a reasonable inference that the claimant intended to mislead or defraud the department in order to receive benefits to which the claimant knew he or she was not entitled, the inquiry next turns to whether the explanation offered by the claimant for his or her actions successfully overcomes this inference.

This analysis is case specific, but the factors that may be considered are whether the claimant acted as a reasonable person filing for unemployment insurance benefits or whether the claimant acted in a wilful or reckless disregard of his or her responsibilities as a claimant when filing a claim. If the claimant establishes that it is more probable than not that he or she has made an honest mistake or good faith error in judgment, no concealment will be found. However, the claimant still will be required to repay the benefits which were overpaid. If the claimant fails to establish an honest mistake or good faith error in judgment, the inference of concealment drawn from the evidence remains and the commission will find concealment.

Application

Exhibit 5 establishes that the employee filed weekly claims certifications for weeks 45 of 2012 through 5 of 2013. On those certifications, the employee answered "No" each week to Question No. 4, which asks "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" Exhibit 1, together with the testimony of the employer's fiscal agent and the employee, establish that the employee did, in fact, work and earn wages in each of those weeks. The employee did not dispute the hours and wages reported by the employer's fiscal agent. Thus, the record supports a finding that the employee filed claim certifications for weeks 45 of 2012 through 5 of 2013 and that she provided incorrect information on those claims.

Claimants who earn wages in any given week may be eligible for partial unemployment benefits pursuant to Wis. Stat. § 108.05(3). However, in this case, the employee would not be eligible for benefits for weeks in which she worked more than 32 hours, pursuant to Wis. Stat. § 108.05(3)(c), or in which her wages exceeded $300, based on her weekly benefit rate of $181 and application of the partial benefits formula found at Wis. Stat. § 108.05(3)(a). Because the employee received full unemployment benefits for weeks 46 of 2012 through 5 of 2013, the record establishes that benefits were improperly paid to the employee as a result of the incorrect information she provided to the department.

The next step is to determine whether the circumstances in this case allow the commission to draw a reasonable inference that the claimant intentionally provided incorrect information in order to obtain benefits to which she was not entitled. The employee was sent a Handbook for Claimants on November 10, 2012. She received the handbook and read it. She has a bachelor's degree. The employee had also been sent earlier versions of the handbook.

Although past commission decisions have referenced a presumption of intent based upon receipt of the Handbook for Claimants and an incorrect answer to Question No. 4 on the weekly claim certification, this is no longer sufficient evidence from which to infer an intent to mislead or defraud the department. Past commission decisions involved a different, much simpler Question No. 4 ("Did you work?") and the fact that hardcopy handbooks were sent with initial claims and often at other points during the claims process. The current form of Question No. 4, which asks "During the week, did you work or did you or will you receive sick pay, bonus pay or commission?", contains more than one question and, as such, is more susceptible to misinterpretation. An inference of intent to mislead or defraud the department cannot be made where the only evidence is that the claimant answered a compound question incorrectly.

In this case, the employee had had prior filing experience, had reported wages she earned on her weekly claim certifications, albeit in response to a simpler Question No. 4, and had received partial benefits. The employee has a post-secondary education and has received multiple copies of the Handbook for Claimants. The October 2012 handbook noted a disqualification for claimants working 32 or more hours in a week. In three of the weeks at issue, the employee worked more than 32 hours. From this evidence, it could be reasonably inferred that the employee intended to receive benefits to which she knew she was not entitled when she failed to report her work and wages for weeks 46 of 2012 through 5 of 2013.

The final step, therefore, is to determine whether the employee rebutted, through affirmative proof of good faith on her part, the inference that she intended to mislead or defraud the department.(19) The employee testified that, when filing her weekly claim certifications, she believed that the questions asked of her related only to the employer from which she had been laid off. It was the layoff which caused the employee to initiate a claim for benefits. The employee did not report the services she performed for Mr. Shaffer as work, because she did not consider caring for Mr. Shaffer in her home as a job. The employee did not consult the Handbook for Claimants or call the department to speak with a claims specialist because she thought that she was responding correctly and providing accurate information.

The ALJ rejected the employee's testimony that that she was confused by Question No. 4 and that she did not consider the services she provided to the employer to be "work" in the unemployment insurance context. The ALJ found that the question to which the employee "gave a false answer was simple, straightforward, and not easily susceptible to misinterpretation." The ALJ also found that the employee was an experienced filer, one who should have contacted a department representative or reviewed her Handbook for Claimants for guidance. When consulted concerning her personal impressions of the material witnesses, the ALJ stated that she had "no independent recollection of any demeanor impressions" that she could impart to the commission.

The commission finds that the employee's testimony that she was confused and did not intend to defraud the department credible. The employee established that she made an honest mistake in believing that she was filing for benefits "against" her previous employer, which had laid her off and caused her unemployment, and that the questions on the weekly claim certifications referred to that employment. Although the employee's belief was incorrect, her misunderstanding of how the unemployment insurance program operates is not uncommon.(20)

In addition, the employee did not think of the care she provided to Mr. Shaffer in her home as a job. Under the circumstances, this is not unreasonable.(21) The employee's work history was comprised of work outside the home. It did not involve caring for individuals in the employee's own home. A first-time failure to report non-conventional work has long been found not to evince an intent to conceal.(22)

Moreover, contrary to the ALJ's finding, Question No. 4 in its current incarnation is not simple and straightforward. While the department's former "Did you work?" version may have been straightforward and not easily susceptible to misinterpretation,(23) the department's current version presents at least two distinct, alternative questions within one compound question. There are inherent dangers in inviting a "Yes" or "No" answer to a compound question, because it is often not possible to be certain to which part, or parts, a single response applies.(24) This is especially true when a claimant files claims by telephone, where the last question heard is not "Did you work?" When the answer to a compound question relates to the substantive issues and the ultimate outcome in a case, as it does here, the commission will not infer an intent on the part of the claimant to mislead or defraud the department because both the question and the answer can be misunderstood.(25)

Additionally, concerning the ALJ's finding that the employee should have consulted the Handbook for Claimants for guidance, it is not clear that the employee, even with a bachelor's degree, would have understood by reviewing the booklet that she erred on her first weekly claim certification and repeated the same error week after week. In the shaded areas on pages 5 and 6 of the booklet, the department lists the questions that claimants are asked weekly. For most questions, the department instructs claimants to "Answer 'Yes' if ..." However, for Question No. 4, the "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" question, claimants are not instructed to "Answer 'Yes' if they worked for any employer during the week." In fact, claimants are not instructed at all as to how to answer the question. Instead, following the question it states, "If yes, you will be asked if you worked for or receive/will receive sick pay, bonus pay or commission from more than one employer during the week." When a claimant believes that the correct answer to Question No. 4 is "No," the information provided thereafter on p. 6 of the Handbook for Claimants appears to be inapplicable.

The commission finds that it is somewhat illogical for the department to expect a claimant who believes that she is responding correctly to the questions asked of her on the weekly claims certification to call a claims specialist. If a claimant makes an honest mistake and is therefore unaware that a mistake has been made, then the claimant would not reasonably think that there is a need to contact the department.

Finally, the fact that the employee filed for, and received, partial unemployment benefits in the past, most recently in 2007, does not preclude a finding that the employee was confused by the claims process in 2013. Several things about the claims process, including the wording of Question No. 4 on the weekly claim certification, changed between 2007 and 2013. In addition, there is nothing in the record to suggest that the employee was providing in-home personal care services or performing other non-conventional work when she filed claims for unemployment benefits in the past. The commission finds it more reasonable to infer that, because the employee properly reported work and wages in the past, she would have reported her services to Mr. Shaffer to the department if she knew such services were "work" under the unemployment insurance law.

Accordingly, upon review of the entire record, the commission concludes that the employee honestly misunderstood her obligations and benefit rights under the unemployment insurance law and, as a result, failed to provide accurate information to the department on her weekly claim certifications. The employee received benefits to which she was not entitled, but, in filing claims for those benefits, she lacked the fraudulent intent essential to support a finding of concealment.

Because the employee did not conceal work performed and wages earned in weeks 45 of 2012 through 5 of 2013, she is entitled to partial benefits in some of those weeks, pursuant to Wis. Stat. § 108.05(3). The employee is not eligible for benefits for weeks in which she worked more than 32 hours, pursuant to Wis. Stat. § 108.05(3)(c), or in which her wages exceeded $300, based on her weekly benefit rate of $181 and application of the partial benefits formula. Wis. Stat. § 108.05(3)(a).

The employee's benefit entitlement, and corresponding overpayment, is as follows:

Week

Hours worked

Wages earned

Benefits paid

Benefits due

Overpayment

45/12

Waiting week

 

$0

$0

$0

46/12

29

$300.91

$181

$0

$181

47/12

31.5

$315.74

$181

$0

$181

48/12

29.5

$300.80

$181

$0

$181

49/12

33

Hours +

$181

$0

$181

50/12

35

Hours +

$181

$0

$181

51/12

28

$284.26

$181

$10

$171

52/12

28

$284.26

$181

$10

$171

1/13

36

Hours +

$181

$0

$181

2/13

36

Hours +

$181

$0

$181

3/13

28

$284.26

$181

$10

$171

4/13

28

$284.26

$181

$10

$171

5/13

20

$203.02

$181

$65

$116

 

Total

Overpayment

 

 

$2,067

The commission therefore finds that, in weeks 45 of 2012 through 5 of 2013, the employee worked and earned wages, but she did not conceal from the department the work performed and the wages earned in those weeks, within the meaning of Wis. Stat. § 108.04(11).

The commission further finds that the employee was entitled to partial benefits, pursuant to Wis. Stat. § 108.05(3)(c), of $10.00 for weeks 51 and 52 of 2012 and for weeks 3 and 4 of 2013 and of $65.00 for week 5 of 2013.

The commission further finds that the employee's failure to report work and wages on her weekly claim certifications for weeks 45 of 2012 through 5 of 2013, while not fraudulent, prevents waiver of recovery of the overpayment, under Wis. Stat. § 108.22(8)(c). The employee must repay the amount of $2,067.00 to the department.(26)

DECISION

The appeal tribunal decisions are modified as to the amount of the employee's overpayment and, as modified, affirmed in part and reversed in part. Accordingly, the employee is entitled to partial unemployment benefits for weeks 51 and 52 of 2012 and for weeks 3 through 5 of 2013, as set forth above. As a result of this decision, the employee is required to repay the benefits she received in error, but the amount of the overpayment is reduced from $2,172.00 to $2,067.00. Also as a result of this decision, the employee's unemployment insurance benefit amount shall not be reduced, and there is no concealment penalty.

Dated and mailed May 8, 2014

holleli3_urr . doc : 152 : BR 330

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

/s/ C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner


MEMORANDUM OPINION

The department requested that the commission reconsider its original decision issued on February 7, 2014, involving the employee. The commission agreed to do so and set its decision aside. The commission now addresses the arguments raised by the department in its request for reconsideration, to the extent they relate to these cases.(27)

The department argued that the commission erred in failing to consult with the administrative law judge (ALJ) who held the hearing in these cases concerning the employee's demeanor and credibility. Although the commission does not agree that it is required to consult with an ALJ in every case in which it reverses an appeal tribunal decision, it did so here. The ALJ had "no independent recollection of any demeanor impressions" to impart to the commission. For the reasons expressed in its decision, supra at pp. 8-10, the commission determined that the employee was credible.

The department also argued that the compound nature of Question No. 4, which was formerly "Did you work?" and is now "During the week, did you work or did you receive or will you receive sick pay, bonus pay, or commission?", is not confusing. The department argued that Question No. 4 can be distinguished from the complex compound question at issue in Atunnise v. Mukasey, 523 F.3d 320, 834 (7th Cir. 2008),(28) because Question No. 4 poses "two rather simple related questions." Thus, the department argued, it is reasonable to infer that answering "No" to Question No. 4, when the claimant should have answered "Yes," is sufficient to establish an intent to mislead or deceive as the question clearly is related to benefit eligibility. The commission disagrees.

An administrative hearing is not a hearing pursuant to an order to show cause. Once the department presents evidence showing that a claimant answered a question incorrectly on a weekly claims certification, the burden of proof is not shifted onto the claimant to prove that his or her incorrect answer was not fraudulent. The burden of proof remains with the department at all times.

In the past, when a claimant answered "No" to the "Did you work?" question, absent credible evidence to the contrary, the commission was more willing to infer that a claimant, who was, in fact, working, intended to mislead or defraud the department. However, now that the "Did you work?" question is asked in conjunction with questions about various forms of past or future remuneration, the commission is unwilling to infer concealment when the claimant answers "No" but was, in fact, working. As noted in Appeals Principles and Procedures, published by the U.S. Department of Labor's Employment and Training Administration (ETA), "compound questions should never be asked if the answer relates to the substantive issues and the ultimate outcome. A compound question is a question that asks more than one question, each of which requires a separate answer. Questions should be related to one point only, so that neither the question nor the answer will be misunderstood."(29)

The commission is not alone in finding compound questions like the department's Question No. 4 a potential source of misunderstanding by claimants. In June 2011, the U.S. Department of Labor strongly encouraged states to review the wording of their continued claims certification form and telephone script to assess whether any questions or language should be made clearer to ensure claimants understand what is being asked. The following example was given:

o Did you work and earn wages during the week?

o Did you perform any work during the week?

o If you worked, what was the amount of wages you earned during the week (report wages earned whether or not these wages have been paid)?(30)

This suggestion to rid claim certification forms and telephone scripts of two-part questions was part of an immediate call to action by the U.S. Department of Labor to all state administrators to develop state-specific strategies to bring down the improper payment rate in unemployment insurance benefits programs. The call to action was communicated in Unemployment Insurance Program Letter (UIPL)
No. 19-11, titled National Effort to Reduce Improper Payments in the Unemployment Insurance (UI) Program.(31) It was recognized that the best way to effectively reduce the improper payment rate is to prevent improper payments before they occur. The U.S. Department of Labor identified unreported or under-reported earnings by claimants as the primary cause of overpayments.

Yet, in spite of the call to action, sixteen months later, in October 2012, the department did exactly the opposite of what the U.S. Department of Labor suggested it do. The department took a relatively simple, straightforward question, one not easily susceptible to misinterpretation -- "Did you work?" -- and created a compound question -- "During the week, did you work or did you receive or will you receive vacation pay, bonus pay or commission?" In doing so, the department created an identified cause of misunderstanding by claimants and a known source of improper payments. Question No. 4 was not made clearer to ensure claimants understood what was being asked; it was made more complex and confusing. At the same time, the department also increased the penalties for concealment.

It must be noted that there are times in which claimants can be, and have been, confused by even the simple "Did you work?" question. In Thornton v. DILHR, No. 81-CV-93 (Wis. Cir. Ct. Forest Cnty. July 6, 1983), for example, the claimant was alleged to have concealed work performed because he did not report on his weekly claims that he assisted his wife with her job duties as the operator of a tavern. The judge distinguished Thornton's factual situation from that in another concealment case, where the employee had filed claims for unemployment benefits while working full-time in her regular job,(32) and stated:

The basic facts are found not to constitute a grounds for reasonable inference that Mr. Thornton intentionally concealed any facts relative to working. ... The Court is completely satisfied under the provisions of 108.04(11), statutes, forfeiture of future benefits may not be imposed against a claimant who makes an honest mistake and this Court will find that, if the accommodation and services that were offered by Mr. Thornton to his wife in the operation of the tavern did in fact constitute employment, reading the question that was posed to him in his application, did he do any work and answering the same no, constitutes a reasonable and honest mistake because in reading the language work, a man who's used to operating heavy equipment is not going to consider housekeeping duties as work. He is going to consider work as being that kind of effort that he ordinarily exerted in order to make the wage he was ordinarily accustomed to receiving.

Thornton v. DILHR, No. 81-CV-93 (Wis. Cir. Ct. Forest Cnty. July 6, 1983), pp. 3-4.

Furthermore, any confusion with Question No. 4, which asks "During the week, did you work or did you receive or will you receive vacation pay, bonus pay or commission?", is not, as alleged by the department, removed when a claimant files online and sees the question, as opposed to a claimant who files by telephone and hears the question. According to a research study done by the U.S. Department of Education and the National Institute of Literacy, as of April 2013, 14 percent of adults in the United States (32 million people) cannot read and 21 percent of adults read below a 5th grade level.(33) In this case, however, the employee filed her claims using the department's telephone IVR system.

Finally, the department argues that it cannot administratively apply the commission's factor of a "fundamental misunderstanding of the UI Program." The department asks "what level of understanding of the program is required" and argues that a claimant's understanding is not even relevant to a claimant's intent in answering a simple question such as "Did you work?" The commission, again, disagrees.

First, the department's question about work is no longer simple. Second, the department's assertions of insurmountable administrative difficulties in ascertaining a claimant's understanding of the unemployment insurance program, as well as the department's need to do so, are belied by its own training manual.

The department's Disputed Claims Manual, on the topic of fraud, instructs adjudicators to establish why the claimant failed to report wages.

When an investigation establishes a claimant has given us false answers we must determine the claimant's intent. We must decide if this was an innocent mistake or done on purpose or with such careless disregard of the claiming process as to amount to an intentional act.(34)

Adjudicators are advised that a thorough review of the claim record is required prior to interviewing a claimant concerning an allegation of concealment. Adjudicators are instructed that they must make a reasonable attempt to obtain the relevant information from the claimant. Among the considerations are:

In the past, adjudicators were instructed to find no intent (1) if there were conflicting answers on an initial or continued claim which clearly establish the claimant was confused or that the claimant did not understand what was being asked or answered; (2) if there was first-time, non-conventional work; (3) if correct information was given to the claimant by agency personnel but the circumstances and facts establish that confusion or a misunderstanding reasonably occurred; (4) if the claimant has a history of mental or physical illness which, when facts are documented, explain the claimant's unintentional concealment; and (5) if a review of prior and/or later claimant records show the claimant properly and accurately reported work and wages or answered questions, an omission, for example, of partial work and wages, supports a finding that an honest mistake was made. An omission could involve more than one employer.(36)

As explained in the commission's decision, supra, the employee in this case misunderstood her obligations and benefit rights under the unemployment insurance law. As a result, she did not provide accurate information to the department on her weekly claim certifications and received benefits to which she was not entitled. However, the employee did not have the fraudulent intent essential to support a finding of concealment. Therefore, while she is required to repay the benefits she received in error, and apparently has already done so, an additional overpayment penalty and a reduction of future benefits will not be imposed.

cc: ATTORNEY ROBERT C JUNCEAU

Appealed to Circuit Court.  Affirmed, January 22, 2015.  [Circuit Court decision summary].

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Footnotes:

(1)( Back ) This information is reflected in Part D, the "PAYMENT HISTORY" sections for "VNC 49/06" and "VNC 08/09." Specifically, the wages reported by the employee (claimant) are listed under the "REMARKS" column for "VNC 49/06." The wording of Question No. 4 on the weekly claim certification at this time was the department's "old" wording, "Did you work?", which was in effect through week 42 of 2012. Effective with claims filed for week 43 of 2012, the question changed to "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" See UI Disputed Claims Manual Update, UID No. 12-26, Oct. 31, 2012.

(2)( Back ) This information is reflected in Part D, the "PAYMENT HISTORY" section for "VNC 45/12." Benefits were not paid for week 45 of 2012, as that was the employee's waiting period. See Wis. Stat. § 108.04(3).

(3)( Back ) The Handbook for Claimants is also known as a Form UCB-10. Effective June 20, 2013, claimants are sent a flyer, directing them to access the handbook online, rather than an actual handbook. See UID No. 13-12 (June 18, 2013).

(4)( Back ) It is noted that the employee would not have given "a statement" to an adjudicator. Rather, during an interview, an adjudicator asks a claimant a series of questions and summarizes the claimant's answers to those questions. Exhibit 6 is not a verbatim record of what was said by the adjudicator or the employee.

(5)( Back ) Wis. Stat. § 108.04(11)(g).

(6)( Back ) Wis. Stat. § 108.05(3)(d).

(7)( Back ) Wis. Stat. § 108.04(11)(a), (b) and (be).

(8)( Back ) Wis. Stat. § 108.04(11)(bm).

(9)( Back ) Wis. Stat. § 108.04(11)(bh).

(10)( Back ) Wis. Stat. § 108.02(11); Kansas City Star Co. v. DILHR, 60 Wis. 2d 591, 602, 211 N.W.2d 488 (1973).

(11)( Back ) In re Scott Lynch, UI Dec. Hearing No. 10404406AP (LIRC Mar. 11, 2011); Holloway v. Mahler Enter., Inc., UI Dec. Hearing No. 11606291MW (LIRC Nov. 4, 2011).

(12)( Back ) Kamuchey v. Trzesniewski, 8 Wis. 2d 94, 98, 98 N.W.2d 403 (1959); Schroeder v. Drees, 1 Wis. 2d 106, 112, 83 N.W.2d 707 (1957).

(13)( Back ) Princess House, Inc. v. DILHR, 111 Wis. 2d 46, 62, 330 N.W.2d 169 (1983).

(14)( Back ) Liberty Loan Corp. & Affiliates v. Eis, 69 Wis. 2d 642, 649, 230 N.W.2d 617 (1975).

(15)( Back ) In re Joseph Hein, Jr., UI Dec. Hearing No. 00605374MW (LIRC Dec. 13, 2001); In re Scott Lynch, supra.

(16)( Back ) Karandjeff v. Cmty. Living Alliance Inc., UI Dec. Hearing No. 11611430MW (LIRC June 20, 2012); Holloway v. Mahler, supra, and the cases cited therein; In re Nestor Gutierrez, UI Dec. Hearing No. 00005766MD (LIRC July 19, 2002).

(17)( Back ) Krueger v. LIRC & Gen. Motors Assembly Div., No. 81-CV-559A (Wis. Cir. Ct. Rock Cnty. Dec. 3, 1982). See, also, Muller v. State, 94 Wis. 2d 450, 469, 289 N.W.2d 570 (1980)(when there are no circumstances to prevent or rebut the presumption, the law presumes that a reasonable person intends all the natural, probable, and usual consequences of his deliberate acts).

(18)( Back ) In re Leonard Miszewski, UI Dec. Hearing No. 12401605AP (LIRC Nov. 30, 2012).

(19)( Back ) See, e.g., In re Henry A Warner, UI Hearing No. S9100679MW (LIRC July 16, 1993).

(20)( Back ) See, e.g., Thomas v. IndependenceFirst Inc., UI Dec. Hearing No. 13609613MW (LIRC March 4, 2014); Haebig v. News Publishing Co. Inc. of Mt. Horeb, UI Dec. Hearing Nos. 13000910MD, 13000911MD, and 13000912MD (LIRC Jan. 31, 2014); In re Mortensen, UI Dec. Hearing No. 05002751JV (LIRC Dec. 14, 2005); and In re Hein, Jr., UI Dec. Hearing No. 00605374MW (LIRC Dec. 13, 2001).

(21)( Back ) See Karandjeff v. Cmty. Living Alliance Inc., UI Dec. Hearing No. 11611430MW (LIRC June 20, 2012)(employee, who was providing care in her home to her adult son with disabilities, did not understand that her services, which she had been performing for 23 years, were considered "work" for unemployment insurance purposes).

(22)( Back ) See, e.g., Wisconsin Unemployment Compensation Manual, Vol. 4, Part III, Chap. 3, "Fraud," January 1993.

(23)( Back ) See, e.g., Candace K. Pitts, UI Dec. Hearing No. 95000045DV (LIRC May 25, 1995).

(24)( Back ) See, e.g., Atunnise v. Mukasey, 523 F.3d 320, 834 (7th Cir. 2008), citing 81 Am. Jur. 2d Witnesses § 714 (2008)(the vice of the compound question is generally recognized; a question which embraces several questions is improper).

(25)( Back ) Handbook for Measuring Unemployment Insurance Lower Authority Appeals Quality, ET Handbook No. 382 (3rd Ed.), U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance, p. 22 (March 2011).

(26)( Back ) The employee testified that she has already repaid the department $2,076.00, although it is not clear from the record how she arrived at that amount.

(27)( Back ) The commission did not consider the affidavits the department submitted with its request for reconsideration; the information presented therein was not new or recently developed. A hearing will not be scheduled for the submission of additional evidence.

(28)( Back ) The department properly pointed out that the commission's original decision contained the wrong case name and citation to support its view of the compound nature of the question. The citation has been corrected.

(29)( Back ) Handbook for Measuring Unemployment Insurance Lower Authority Appeals Quality, Third Edition, U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance, March 2011, Appendix B: Appeals Principles and Procedures, pp. 4-5.

(30)( Back ) UIPL No. 19-11, U.S. Department of Labor, Employment and Training Administration, June 10, 2011, pp. 4-7.

(31)( Back ) The U.S. Department of Labor's Employment and Training Administration interprets federal law requirements pertaining to unemployment insurance as part of its role in the administration of the federal-state unemployment insurance program. These interpretations are issued in Unemployment Insurance Program Letters (UIPLs) to state employment agencies. As agents of the federal government, states must follow the operating instructions and guidance provided in UIPLs. See DWD v. LIRC, 2006 WI App 241,  2, 297 Wis. 2d 546, 725 N.W.2d 304.

(32)( Back ) Krueger v. LIRC & General Motors Assembly Div., No. 81-CV-559 (Wis. Cir. Ct. Rock Cnty. Dec. 3, 1982).

(33)( Back ) See http://www.statisticbrain.com/number-of-american-adults-who-cant-read/.

(34)( Back ) Disputed Claims Manual, Department of Workforce Development, Division of Unemployment Insurance, Fraud, Sec. II, Part C. Available at http://dwdworkweb/uibmanuals/dc/fraud.htm.

(35)( Back ) Id., Sec. IV, Part V.

(36)( Back ) Wisconsin Unemployment Compensation Manual, Vol. 4, Part II, Chap. 3, "Fraud," January 1993. 

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