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

DONOVAN D JACKSON, Employee

SECURITAS SECURITY SERVICES INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing Nos. 14606875MW
and 14606876MW


On October 3, 2014, an administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development 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 January 30, 2015, modifying and affirming, as modified, the appeal tribunal decisions.

Within 28 days after that decision was mailed to the parties, the commission set aside its January 30, 2015, decision for purposes of reconsideration. On March 18, 2015, the commission remanded the matter and ordered the taking of additional evidence before an ALJ acting on behalf of the commission. The remand hearing was held on May 13, 2015.

The commission has considered the employee's petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJs at both hearings. Based on its review, the commission now makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee has worked as a security guard for the employer, a security business, since 2012. He usually works full-time, but there was a period of time when he was scheduled to work fewer hours.

The employee initiated a claim for unemployment benefits on December 3, 2013 (week 49), following the advice of his mother. He had been discharged from a part-time job at Sam's Club (Walmart) on November 11, 2013 (week 46). At the time he initiated his claim, the employee was working part-time for the employer and for another business, InStile Acquisitions LLC (InStile). The employee's benefit rate based on his December 3, 2013, claim was $266 per week.

The department sent the employee a claim confirmation and a notice that the department's Handbook for Claimants was available online. The employee did not recall receiving the claim confirmation or the notice. He never received a hard copy of the Handbook for Claimants and never accessed the online version.

On December 3, 2013, the same day on which he initiated his claim, the employee filed a claim certification for week 48 of 2013. He filed his claim by telephone, using the department's interactive voice response (IVR) system. He completed his certification with the assistance of a claims specialist.

On December 12, 2013, the employee attempted to file a claim certification for week 49 of 2013 using the Internet. He did not complete his certification until December 30, 2013, when he was, again, assisted by a claims specialist. Because the employee failed to complete a claim certification for week 49 of 2013 within 14 days of the close of that week, his claim lapsed. Consequently, he was required to "reopen" or "reactivate" his claim. The claims specialist helped the employee reopen his claim and helped him file claim certifications for weeks 49 through 52 of 2013. The employee reported that he worked and earned wages in each of those weeks from the employer and from InStile.

The employee filed a claim certification for week 1 of 2014 on January 5, 2014. He used the Internet. He reported that he worked and earned wages in that week from the employer and from InStile. He did not seek benefits for week 2 of 2014.

On January 12, 2014 (week 3), the employee, again, reopened his claim for benefits. He reported that he continued to work for the employer and for InStile.

The employee filed his claim certification for week 3 of 2014 on January 19, 2014 (week 4), using the Internet. He reported that he worked and earned wages in that week from the employer and from InStile. The employee also reported that he had been fired in that week by InStile.

The employee did not receive unemployment insurance benefits for weeks 48 of 2013 through 3 of 2014. Week 48 of 2013 was his waiting week, and he worked too many hours in each of the subsequent weeks to qualify for benefits.

The employee filed claim certifications for weeks 4 through 29 of 2014. He did not report that he worked or that he earned wages in any of those weeks. The employer reported that the employee worked and earned wages as follows:

Week of issue

Hours worked

Wages earned

10/14

47.33

$453.12

11/14

43

$453.12

12/14

40

$485.00

13/14

30

$485.00

14/14

Not reported

$489.43

15/14

Not reported

$489.43

16/14

Not reported

$489.42

17/14

Not reported

$489.42

18/14

Not reported

$424.00

19/14

Not reported

$424.00

20/14

Not reported

$380.00

21/14

Not reported

$380.00

22/14

Not reported

$443.39

23/14

Not reported

$443.39

24/14

Not reported

$424.00

25/14

Not reported

$424.00

26/14

Not reported

$454.65

27/14

Not reported

$454.65

28/14

Not reported

$389.38

29/14

Not reported

$389.38

Although the employee stopped reporting work and wages on his claims beginning in week 4 of 2014, he did not immediately receive benefits. There was a hold on his account while the department investigated the circumstances surrounding his separation from InStile.

The employee participated in a hearing concerning his eligibility for benefits following his discharge from InStile. The ALJ who presided over that hearing told the employee to keep filing weekly claims. Following the hearing, benefits were allowed. On March 27, 2014 (week 13), the employee received benefits in a lump sum for weeks 4 through 12 of 2014. Thereafter, through week 29 of 2014, the employee received weekly benefits of $266.

At the first hearing in this matter, when asked why he did not report his work and wages on his claim certifications for the weeks at issue after he had done so in previous weeks, the employee explained that, after about the first six weeks of filing, the system no longer asked him to report his wages and he did not see anywhere to report them on the Internet claim form. Instead, the system asked him a new question. The new question was "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?"(2) The employee answered "No" because he was never paid commission, sick pay, or bonuses. The employee did not see that the question was also asking if he worked. The employee understood that the department already knew that he was working for the employer. The employee had reported his employment with the employer when he opened and reopened his claim. He never reported a separation from the employer. The employee had reported his separations from Sam's Club and InStile.

The employee was born in 1991 and is a high school graduate. Prior to 2013, he had filed a claim for benefits once, in 2010. He did not receive any benefits based on that claim.

The employee believed that the unemployment insurance system was set up to provide him with money until he found another job to replace the two jobs that he lost. He thought that the money had been taken out of his pay while he was working, like Social Security. The employee was unaware that he was not filing his claims correctly until he spoke with an adjudicator during the fraud investigation. He was told to keep filing his weekly claim certifications, and he did.

Issues

The issues to be decided are whether the employee worked and earned wages in the applicable weeks, whether he concealed his work and wages, whether he received benefits to which he was not entitled and which he must repay, and whether any concealment penalties or future ineligibility for benefits must be assessed.

Concealment

The standards and burden of proof for concealment were explicitly set forth in Hollett v. Shaffer, UI Dec. Hearing Nos. 13003690MW and 13003691MW (LIRC Apr. 30, 2014), aff'd, Wis. Dept. of Workforce Dev. v. Wis. Labor & Indus. Rev. Comm'n and Hollett, Case No. 14 CV 331 (Wis. Cir. Ct. Sauk Cnty. Jan. 22, 2015):

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."

A claimant who conceals work performed or wages earned when filing a weekly claim certification is ineligible to receive benefits for the week claimed. 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. This ineligibility is applied against benefits and weeks of eligibility for which the claimant would otherwise be eligible after the week of concealment. 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.

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

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." 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. As a result, concealment will not be found where a claimant makes an honest mistake or misinterprets information received from the department. Concealment requires an intent or design to receive benefits to which the claimant knows he or she is not entitled. 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.

... (footnotes omitted).

Concealment may be established through direct evidence, such as an admission by the claimant that incorrect information was provided to the department with the intent to receive benefits to which the claimant was not entitled, or indirect evidence from which such intent can be inferred. Such inference cannot be satisfied by demonstrating merely that incorrect information was provided when filing a weekly benefit claim.(3) Concealment will not be found where a claimant made an honest mistake, misinterpreted information received from the department, or misunderstood his or her obligations and benefit rights under the unemployment insurance law.(4)

In this case, there is no direct evidence of concealment. The employee denied that he intentionally misled or defrauded the department to obtain benefits. The employee contended that he was confused and was unaware that he was making the same mistake week after week on his claim certifications when he answered the department's "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" question in the negative.

The ALJ who presided over the original hearing and issued the appeal tribunal decisions in this matter rejected the employee's contention that he was confused when he filed his claim certifications for the weeks at issue. The ALJ found that the employee had received the Handbook for Claimants and that the employee knew how to report work and wages in a week when he filed benefits, as the employee had done so in late 2013 and early 2014. The ALJ found that the employee responded correctly to the "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" question.

The commission makes different factual findings than the ALJ. First, the employee testified without rebuttal that he did not receive the Handbook for Claimants, and, based on the timing of his claim, the department would not have mailed a handbook to him. The employee initiated his claim in December 2013. The department stopped mailing handbooks to claimants in June 2013.(5)

With respect to whether the employee knew how to report work and wages in a week when he filed benefits in and after week 4 of 2014, it cannot be found, as a fact, that he did. Rather, the evidence received at the remand hearing establishes that the employee properly reported his work and wages only for those weeks in which he had help from a claims specialist or had been specifically prompted.

The employee received assistance from a claims specialist with filing his claim certifications for weeks 48, 49, 50, 51, and 52 of 2013. He was not assisted by a claims specialist with filing his claim for weeks 1 and 3 of 2014, but he was, instead, assisted by the department's computer system. When the week being claimed is the week of an initial claim (new or additional) and the claimant reported on the initial claim a last day of work in the week being claimed, the department's computer system follows a special procedure and gives the claimant special prompts and different questions than in other weeks.(6) This explains why the employee was able to file his claims correctly in weeks 1 and 3 of 2014 without the assistance of a claims specialist and why the employee insisted that, after the first six weeks or so of claiming benefits, the questions changed.

The employee completed an initial claim (additional) on December 30, 2013 (week 1), and reported that he was working for the employer and for InStile. When the employee filed his claim certification for week 1 of 2014, the department's computer system followed a special procedure and gave the following prompt:

You reported that you worked during the week ending January 4, 2014, when you filed your benefit claim. That is the week you are now claiming. Because you worked during the week, you must report wages. If you did not work as reported, please contact a claims specialist.

The employee was then asked the following question:

During the week, did you work for more than one employer or did you receive or will you receive sick pay, bonus pay or commission from more than one employer?(7)

The employee responded "Yes" and was thereafter prompted to report a separate income amount from each employer. The employee reported that he earned $166.00 from the employer and $75.00 from InStile in week 1 of 2004.

The employee did not file a claim certification for week 2 of 2014. He completed an initial claim (additional) on January 12, 2014 (week 3), and reported, as he consistently had, that he was working for the employer and for InStile. When the employee later filed his claim certification for week 3 of 2014, again the department's computer system followed a special procedure and, after acknowledging that he worked during the week, asked the employee if he worked for more than one employer, and prompted him to report his wages. The employee reported that he earned $166.00 from the employer and $130.00 from InStile.

The employee was not required to reopen his claim before filing a claim certification for week 4 of 2014. Consequently, the department's computer system followed its regular procedure. It did not recognize that the employee was working and did not prompt him to report his wages. Instead, the department's computer system asked the employee a different, yet very similar, question than in earlier weeks. The employee was asked:

During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?(8)

The employee missed the "did you work" part of the question and thought that the question was referring to whether he received sick pay, bonus pay or commission. He had notified the department of his discharge from InStile on his claim certification for week 3 of 2014 and had provided information to the department about his work for the employer, so he thought that the department knew that he continued to work for the employer. The employee understood the first question on the claim certification-relating to whether he was able and available for full-time work-to be the question that asked him if he had worked during the week being claimed. The employee filed his claim certifications for weeks 5 through 29 of 2014 in the same manner he did for week 4 of 2014.

The employee thought that he was answering the claims questions properly. When he discussed his benefits with the ALJ at the time of the hearing relating to his discharge from InStile, the ALJ told him that he should continue filing for benefits. Nothing was said about him filing his claims incorrectly. Because the questions asked in each week after week 4 of 2014 were the same, the employee provided the same answers that he thought were correct.

The commission issued its original decision in this matter on January 30, 2015. At that time, the commission was not aware that the department followed special procedures when the week being claimed by a claimant is the week of an initial claim. The printouts introduced as department records which purport to show the questions asked of a claimant each week and the claimant's answers (the DUCQ screens) do not reflect when special procedures are followed. Therefore, in this case, it appeared that the employee answered the "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" question correctly for weeks 1 and 3 of 2014, when, in fact, that question was never even posed to him for those weeks. He was not asked that question until week 4 of 2014.

Given that the employee was correct in contending that the questions he was asked changed and were not always those reflected on the DUCQ screens marked by the ALJ as exhibits, the commission cannot draw a reasonable inference of concealment. The commission finds the employee credible that he thought that he was filing correctly and did not intend to mislead or defraud the department. After the prompts and questions changed beginning in week 4 of 2014, he misunderstood what he was being asked. The employee made an honest mistake.(9)

The employee was an inexperienced claims filer. He had been working three part-time jobs and lost two of the three. The employee provided all required information to the department about his employment--who he was working for, how many hours he worked, how much he earned in wages, when he was fired--until he mistakenly answered the department's compound question on his claim certifications incorrectly. The employee was not aware that he was answering the question incorrectly and continued to make the same mistake week after week, month after month.

The commission therefore finds that, in weeks 10 through 29 of 2014, the employee worked and earned wages, but he did not conceal from the department work performed and wages earned in those weeks, within the meaning of Wis. Stat. § 108.04(11).

The commission further finds that the employee is entitled to partial benefits, pursuant to Wis. Stat. § 108.05(3)(c), for the weeks at issue, if otherwise eligible. The employee is not eligible for benefits for weeks in which he worked 32 hours or more.

There is insufficient evidence in the record to determine whether the employee is eligible for partial benefits. The number of hours he worked in most of the weeks at issue is not known. The employer did not provide that information. Furthermore, it appears that the wage information provided by the employer may not be accurate. It looks as though the employer divided by two the amount the employee was paid bi-weekly and reported those amounts to the department as his weekly wages. The employee, however, did not work the same number of hours each week and has a rate of pay that varies by client. In addition, the employer's weeks for payroll purposes run Friday through Thursday. Weeks for unemployment insurance purposes run Sunday through Saturday. This issue will be remanded to the department for investigation.

The commission further finds that the employee's failure to report work and wages on his weekly claim certifications for weeks 10 through 29 of 2014, while not fraudulent, prevents waiver of recovery of the overpayment, under Wis. Stat. § 108.22(8)(c), because the overpayment was not due to departmental error. The department paid benefits based on the information it was provided. The employee must repay to the department benefits he received to which he was not entitled, the calculation of which is remanded to the department.

The commission further finds that there is no overpayment penalty to assess under Wis. Stat. § 108.04(11)(bh) and no period of ineligibility to impose under § 108.04(11)(be) and (bm).

DECISION

The appeal tribunal decisions are modified to reflect the above findings of fact and conclusions of law and, as modified, are affirmed in part and reversed in part. Accordingly, the employee is entitled to partial unemployment benefits for weeks 10 through 29 of 2013, if otherwise eligible. The employee is required to repay the benefits he received to which he was not entitled. The issue of the employee's eligibility for partial benefits based on accurate wage and hour information and the calculation of the overpayment amount are remanded to the department. As a result of this decision, there is no concealment overpayment penalty, and the employee's future benefit amount shall not be reduced.

Dated and mailed June 9, 2015

jacksdo_urr . doc : 152 :  BR 330 : PC 735 : PC 740 : PC 714.06

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

/s/ C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner

cc: CONTINENTAL INC


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Footnotes:

(1)( Back ) The commission notes that the underlying departmental determination in this case identified the issue week as week 6 of 2014, even though the weeks in which concealment was found are weeks 10 through 29 of 2014. This may be a simple error, since the issue week identified in the underlying determination for Hearing No. 14606875MW is week 10 of 2014.

(2)( Back ) This question is Question No. 4 on the IVR continued claim form and Question No. 7 on the Internet continued claim form.

(3)( Back ) Hollett v. Shaffer, cited previously.

(4)( Back ) See, e.g., id.; In re Scott Lynch, UI Dec. Hearing No. 10404409AP (LIRC Mar. 11, 2011); In re Joseph Hein, Jr., UI Dec. Hearing No. 00605374MW (LIRC Dec. 13, 2001).

(5)( Back ) This information is contained in a UI policy manual update dealing with the Handbook for Claimants, UID No. 13-12, dated June 18, 2013. This update references a flyer, a UCB-17399-P, to be mailed with the Confirmation Form UCB-10148, which provides instructions for accessing the online version of the handbook.

(6)( Back ) UI Benefits Manuals, UI Telephone Initial Claim Training Manual, "The Weekly Claim," pp. 1, 13-16; UI Weekly Claims IVR Script, updated 07/09/2013, codes 240.3, 250.3, 260, 270.

(7)( Back ) Emphasis added.

(8)( Back ) The phrase "from any other employer" was removed from the middle and end of the prior week's question.

(9)( Back ) The commission consulted with the ALJ at the original hearing to obtain his demeanor impressions of the witnesses, as credibility is a factor in this case. The ALJ reported that he had no demeanor impressions that he could recall. 

 


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