ANITA G MCGEE, Employee

CROSSMARK INC, Employer

An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued four appeal tribunal decisions in this matter.

• For Hearing No. 14609275MW, the ALJ held that the employee worked and earned wages in weeks 41 through 50 of 2013 and that she concealed that work and those wages on her weekly claim certifications. The employee was required to repay the amount of $143.00 to the Unemployment Reserve Fund for benefits she received to which she was not entitled. The employee was also assessed and required to pay a penalty of $21.45, which is 15 percent of the overpayment amount.

•  For Hearing No. 14609276MW, the ALJ held that the employee concealed work and wages on her weekly claim certifications for weeks 41 through 50 of 2013. As a result, in addition to the concealment overpayment penalty assessed for Hearing No. 14609275MW, there is to be a reduction of $3,520.00 in unemployment benefits that become payable during the six-year period ending November 21, 2020.

•  For Hearing No. 14609277MW, the ALJ held that the employee worked and earned wages in weeks 2, 14 through 28, and 30 through 38 of 2014 and that she concealed that work and those wages on her weekly claim certifications. The employee was required to repay the amount of $2,279.00 to the Unemployment Reserve Fund for benefits she received to which she was not entitled. The employee was also assessed and required to pay a penalty of $341.85, which is 15 percent of the overpayment amount.

• For Hearing No. 14609278MW, the ALJ held that the employee concealed work and wages on her weekly claim certifications for weeks 2, 14 through 28, and 30 through 38 of 2014. As a result, in addition to the concealment overpayment penalty assessed for Hearing No. 14609277MW, there is to be a reduction of $16,000.00 in unemployment benefits that become payable during the six-year period ending November 21, 2020.

The employee filed a timely petition for review. 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 works part-time as an event demonstration specialist for the employer, Crossmark Inc., a marketing company, presenting demonstrations at grocery stores. She is paid $10.50 per hour. The employee also works part-time as a special services worker for the Wisconsin Center District, a convention hall. She is paid $11.05 per hour.

The employee initiated a claim for unemployment benefits on October 6, 2013 (week 41). Beginning in week 41 of 2013 and continuing through week 38 of 2014, the employee reported on her weekly claim forms that she worked for and earned wages from the Wisconsin Center District (WCD). She did not report working for and earning wages from Crossmark (CM). The employee's work, wages, and benefits paid for the weeks at issue are as follows:

 

Week	Hours with CM	Wages from CM	Hours with WCD	Wages from WCD	Total hours	Total wages	Benefits paid	Explanation for reduction in benefits paid
41/13	30	$315	9:50	$104.98	39:50	$419.98	$   0	Waiting week
42/13	30	$315	21	$232.05	51	$547.05	$  91
43/13	18:30	$194.25	4	$44.20	20:30	$238.45	$   0	$160 overpaid on another decision
44/13	18	$189	8:25	$91.16	26:25	$280.16	$   0	$160 overpaid on another decision
45/13	18	$189	0	0	18	$189.00	$  52	$76 applied to benefit reduction
46/13	24	$252	16:25	$179.56	40:15	$431.56	$   0	$59 applied to benefit reduction
47/13	12	$126	0	0	12	$126.00	$   0	$160 applied to benefit reduction
48/13	11	$140.50	4	$44.20	15	$184.70	$   0	$150 applied to benefit reduction
49/13	24	$252	12:75	$140.89	36:75	$392.89	$   0	$85 applied to benefit reduction
50/13	24	$252	0	0	24	$252.00	$160	$160 applied to benefit reduction
02/14	22	$231	13:50	$149.18	35:50	$380.18	$   0	$106 applied to benefit reduction

 At the time the employee initiated her claim in October 2013, she skimmed through the department's online Handbook for Claimants. The employee believed that she needed to look at the handbook only if she had a question. If she had a question, though, rather than looking through the handbook, the employee would call the department at one of the numbers listed to speak with a "live agent." The employee called the department on numerous occasions in the past when filing claims for benefits. The employee has a bachelor's degree in human services and a master's degree in adult education.

The employee explained that she did not report her work for and wages from Crossmark when filing weekly claims for unemployment insurance benefits because her immediate supervisor at Crossmark told her that, "technically," she did not have to do so. The premise was that Crossmark is a corporation based in Texas, and taxes are withheld and paid to that state. Learning that she did not have to report working for Crossmark was "music to [the employee's] ears." The employee did not call the department to ask how her employment with Crossmark would affect her unemployment insurance benefits or to confirm that she did not have to report the wages from that work on her claim forms. The employee considered her supervisor to be an expert on the subject, because he had dealt with another worker who had been filing for unemployment insurance benefits. When the employee confronted her supervisor via email about giving her erroneous advice concerning the need to report to the department her employment with Crossmark, the employee's supervisor denied telling her that she did not need to do so. The employee was unable to produce a copy of the email exchange between her and her supervisor, although the ALJ left the hearing record open for that purpose.

On November 23, 2013 (week 47), the department issued two determinations finding that the employee had filed fraudulent claims for weeks 43 and 44 of 2013. The employee had worked for and earned wages from the WCD in those weeks, but she did not report that work or those wages on her claim forms. As a result, the employee was required to repay benefits in the amount of $320.00 and to pay a concealment penalty of $48.00. In addition, there was a reduction of $960.00 in future unemployment benefits. The employee appealed the department's determinations. They were affirmed by an ALJ in January 2014 after hearing, and the employee did not seek review by the commission.

Issues

The issues to be decided are whether the employee concealed work and wages from the department when filing her claims for unemployment benefits for weeks 41 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014; whether she received benefits to which she was not entitled and which she must repay; and whether concealment penalties and future benefit reductions 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.(1) Concealment will not be found where a claimant makes an honest mistake, misinterprets information received from the department, or misunderstands her obligations and benefit rights under the unemployment insurance law.(2)

The employee in this case agreed that she filed claims for unemployment insurance benefits for weeks 41 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014 and that in each of those weeks she did not report that she had worked for and earned wages from Crossmark. She admitted to the accuracy of the earnings report submitted by Crossmark, which showed the hours she had worked and the wages she had earned in the weeks at issue. Because the employee failed to report that work and those wages to the department when filing claims for those weeks, the employee received benefits to which she was not entitled.

There is no direct evidence of concealment by the employee. The employee denied that she intended to mislead or defraud the department when she filed her claims for weeks 41 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014.

Indirect evidence in the record, however, is sufficient to support an inference that the employee provided incorrect information on her weekly claim certifications in order to receive benefits to which she was not entitled. The employee was not new to claiming unemployment insurance benefits. She expressed no confusion about how to answer the questions asked of her on the department's claim forms, and she was aware from past encounters with the department that she needed to report accurately all hours worked and all wages earned. The employee knew that her job with Crossmark could affect her unemployment insurance benefits, yet she chose not to read the Handbook for Claimants and chose not to contact the department to learn how wages earned from a corporation based outside of Wisconsin are treated for unemployment insurance purposes.

Instead, the employee chose to talk her supervisor and to rely on his statement that, "technically," she did not have to report her work and wages from Crossmark because the company was based in Texas. It was not reasonable for the employee to rely on her supervisor's statement without verifying its accuracy with the department. The employee claimed to have contacted the department many times in the past when she had questions about unemployment insurance, so the employee's decision not to contact the department with questions about her employment with Crossmark is highly questionable. This is especially true after the employee was found to have concealed work and wages from the department in weeks 43 and 44 of 2013.

The inference of concealment was not rebutted. The employee's failure to report her work and wages from Crossmark was not the result of an honest mistake, a misinterpretation of information received from the department, or a good faith misunderstanding of her obligations. The employee in this case may not avoid responsibility for her actions by deliberately remaining ignorant of her duties and obligations under the unemployment insurance law.

The commission therefore finds that, in weeks 41 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014, the employee worked and earned wages from Crossmark, Inc. and concealed that work and those wages, within the meaning of Wis. Stat. § § 108.02(26) and 108.04(11), on her weekly benefit claims.

The commission further finds that, pursuant to Wis. Stat. § 108.05(3)(d), the employee is not entitled to benefit payments for weeks 41 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014.

The commission further finds that the employee was overpaid benefits of $2,959.00, of which $537.00 was included in other decisions, and must repay, as a result of this decision, $2,422.00 to the Unemployment Reserve Fund.

The commission further finds that a total of $987.00 was applied in weeks 45 through 50 of 2013 and weeks 2, 14, and 15 to the employee's benefit amount reduction from an earlier decision and, because benefits are now denied for those weeks, $987.00 must be restored to the employee's benefit amount reduction.

The commission further finds that the employee's failure to report work and wages on her weekly claim certifications 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 provided by the employee.

The commission further finds that, pursuant to Wis. Stat. § 108.04(11)(bh), the employee must pay a concealment penalty of $363.30 ($2,422.00 x 15 percent).

The commission further finds that, pursuant to Wis. Stat. § 108.04(11)(be) and (bm), there is a $19,520.00 reduction in benefits and weeks that become payable during the six-year period ending December 19, 2020. This amount does not include the benefit reduction amount penalty for weeks 43 and 44 of 2013, as those weeks were included in another decision. The benefit amount reduction is calculated as follows: 5 acts of concealment--weeks 41, 42, 45, 46, and 47 of 2013--results in a benefit reduction amount of $1,600.00 ($160.00 x 2 x 5 = $1,600.00), and 28 additional acts of concealment--weeks 48 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014--which occurred after November 23, 2013, when the department's determination finding the first instance of fraud was issued, results in a benefit reduction amount of $17,920.00 ($160.00 x 4 x 28 = $17,920.00). The benefit amount reductions are for benefits and weeks that become payable during the six-year period ending November 21, 2020.

The appeal tribunal decisions are modified to conform to the above findings of fact and conclusions of law and, as modified, are affirmed. Accordingly, the employee is ineligible for benefits for weeks 41 through 50 of 2013 and weeks 2, 14 through 28, and 30 through 38 of 2014. The employee is required to repay the sum of $2,422.00(3) to the Unemployment Reserve Fund. The sum of $987.00 is to be restored to the employee's benefit amount reduction.(4) The department shall assess an overpayment penalty of $363.30.(5) The employee's benefit amount shall have a reduction of $19,520.00 that remains in effect for benefits and weeks of eligibility within the six-year period ending November 21, 2020.(6)

Dated and mailed May 28,2015

mcgeean_urr . doc : 152 : BR 330

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

/s/ C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner

In her petition for commission review, the employee asked why there were so many different hearing numbers for the same case file. A determination is issued by the department to address a specific issue and covers an identified period of time, and a separate hearing number is given to each determination appealed by a party. The employee appeared to be under the impression that multiple hearing numbers affect the calculation of concealment penalties. That is not the case. Only acts of concealment occurring after a finding of concealment has been made are subject to increased penalties (four or eight times a claimant's weekly benefit rate).(7)

The employee noted that Crossmark did not appear at the hearing in this matter. However, the department and commission must apply any provision of the unemployment insurance law that may disqualify an employee from receiving benefits whether or not an employing unit actively challenges an employee's eligibility. The hearing in this matter was held for the purpose of establishing whether the employee worked and earned wages in the weeks at issue and whether she reported that work and those wages when filing claims for unemployment insurance benefits. Although Crossmark did not appear at the hearing, it had earlier provided wage information to the department. The employee did not dispute the information provided by Crossmark.

Finally, the employee objected to the ALJ's findings concerning her educational level and stated that her education was discussed after the hearing had ended. As a rule, ALJs avoid having "off the record" conversations with parties. In this case, a review of the recording from the employee's hearing confirms that the discussion concerning the employee's educational background occurred while the hearing was in progress, before the exhibits were received into evidence and the hearing record closed. Contrary to the employee's assertion, a claimant's educational level is relevant to the issue of whether a claimant intentionally misled or defrauded the department and is one of many factors that may be considered. A claimant who is unable to read and understand the Handbook for Claimants or to comprehend what is being asked on the weekly claim form, for example, may be found to have made an honest mistake rather than a deliberate omission of information. Conversely, a claimant who is able to read the Handbook for Claimants but chooses not to and who is not confused by the questions asked on the weekly claim form but nonetheless answers them incorrectly or inaccurately may be found to have intentionally withheld information from the department.

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

(2)( 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).

(3)( Back ) An overpayment of $143.00 is attributed to Hearing No. 14609275MW, and an overpayment of $2,279.00 is attributed to Hearing No. 14609277MW.

(4)( Back ) The amounts restored to the employee's benefit amount reduction are $690.00 for Hearing No. 14609275MW and $297.00 for Hearing No. 14609277MW.

(5)( Back ) A penalty of $21.45 is attributed to Hearing No. 14609275MW, and a penalty of $341.85 is attributed to Hearing No. 14609276MW.

(6)( Back ) The benefit reduction amount attributable to Hearing No. 14609277MW is $3,520.00, and the benefit reduction amount attributable to Hearing No. 14609278MW is $16,000.00.

(7)( Back ) See, e.g., Lambert v. Waunakee Manor Health Care Center, UI Dec. Hearing Nos. 14000936MD and 14000937MD (LIRC Sept. 19, 2014). 

uploaded 2015/07/16