CHRISTINE A LAMBERT, Employee
WAUNAKEE MANOR HEALTH CARE CENTER, Employer
An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development held a consolidated hearing in two cases involving the employee, and issued two appeal tribunal decisions on April 17, 2014:
* In Hearing No. 14000936MD, the ALJ held that in her weekly claim certifications the employee concealed from the department work performed and wages paid or payable for weeks 44 and 45 of 2013, and that she concealed the fact that she had quit a job in week 44 of 2013. As a result, the ALJ affirmed the department's initial determination reducing the employee's eligibility for future benefits by $1,284.00.
* In Hearing No. 14000937MD, the ALJ held that the employee was paid benefits totaling $214.00 for weeks 44 and 45 of 2013, to which she was not entitled because of the concealment on her claim certifications for those weeks, and that the erroneously paid benefits were an overpayment that she must repay to the department. The ALJ also ordered the employee to pay an overpayment penalty of $32.10.(1)
The employee filed a timely petition for commission 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 appeared at the consolidated hearing in person and with a student representative, Julia Welytok. Waunakee Manor Health Care, the employer named as a party in Hearing No. 14000937MD, appeared in person by its assistant administrator, Susan Ohm. A second employer, Qualitemps, did not appear. The department did not present testimony. The ALJ marked and received four exhibits, consisting of: 1) a statement based on a claims investigator's interview of the employee; 2) a printout of questions and answers on the employee's weekly claim certifications for weeks 44 and 45 of 2013; 3) a printed copy of the department's Handbook for Claimants, revised October 11, 2013, which was available online at the department's website; and 4) a printed record of claims initiated by the employee in 2013.
Facts Adduced at Hearing
The employee filed claims for benefits in April, August, October and November 2013, including weeks 40 through 45 (the week ending October 5, 2013 through the week ending November 9, 2013). Her weekly benefit rate was $107. She received $107 in benefits in each of weeks 44 and 45 of 2013. At some point, she read the department's Handbook for Claimants. The handbook recites the questions that claimants are asked when they make weekly claim certifications, and provides some instructions on how to answer the questions. One of the questions quoted in the handbook relates to whether the claimant had quit a job or was discharged from a job. The question and instruction reads:
During the week, did you quit a job or were you fired?
* Answer "YES" if you quit, voluntarily terminated, ended your employment for any reason OR you were terminated, discharged, or fired by the employer for any reason other than lack of work.
Another question quoted in the handbook asks about work and wages. The question and instruction reads:
During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?
* 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.
* Then you will be told to enter the gross amount of income from each employer, including, sick pay, bonus pay and commissions. Do not include holiday, vacation or dismissal pay as wages.
* After your income has been entered, you will be told to enter the number of hours and the additional minutes for which you received or will receive pay from each employer.
* You will usually be asked to speak the complete name and address of each employer.
During week 44 of 2013 (the week ending November 2, 2013), the employee worked a total of eight hours and seven minutes for Waunakee Manor Health Care as a certified nursing assistant, earning $101.50. She quit her job with this employer on October 29, 2013 (week 44).
During week 45 of 2013 (the week ending November 9, 2013), the employee began working for Qualitemps as an assembler. She worked 24 hours for Qualitemps in week 45, and earned $271.68 during week 45.
The employee filed her claims online. In her claim certification for week 44, the employee answered no to the question asking if she had quit a job during the week. She also answered no to the question asking if she worked or received or will receive sick pay, bonus pay or commission.
In her claim certification for week 45, the employee answered no to the question asking if she worked or received or will receive sick pay, bonus pay or a commission.
On February 21, 2014 a department investigator took a statement from the employee by telephone and wrote a summary of it. The statement indicates that the department detected an issue regarding the accuracy of the employee's certifications for weeks 44 and 45 of 2013 on February 10, 2014. According to the February 21st statement, the employee said she had called the department on February 4, 2014 and stated that she had failed to report having worked when making a previous claim. The statement indicates that the employee was prompted to make her call on February 4, 2014 by the fact that she had gotten a decision relating to her failure to report a job refusal on a claim certification, and read that she could be fined and jailed for not reporting, so she called and reported that she had worked. According to the statement, the February 4th call was the employee's first report to the department to correct her earlier claim certifications.
The employee did not claim to be confused by the question asking whether she had quit a job during the week. She explained that she answered no to that question on her certification for week 44 because she was not paying attention to what she was doing. As to the question asking whether she worked, and whether she received or will receive sick pay, bonus pay or commission, she explained that she understood the part of the question asking whether she worked, and answered no because she was not paying attention. She also stated that she was confused about when wages should be reported--in the week they are earned, or the week they are actually received. The handbook indicates that if a claimant answers no to the part of the question asking whether the claimant worked, the claimant is not asked about receipt of wages.
The employee denied that she intended to conceal her work and wages when she filed her claims for weeks 44 and 45.
The issues to be decided are whether the employee quit a job in week 44 of 2013, whether she worked and earned wages in weeks 44 and 45, whether she concealed the quit and her work and wages, whether she received benefits to which she was not entitled and which she must repay, and whether any concealment penalties or future ineligibility for benefits 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, to conceal means "to intentionally mislead or defraud the department by withholding or hiding information or making a false statement or misrepresentation."(2)
A claimant who conceals work performed or wages earned when filing a weekly claim certification is ineligible to receive any benefits for the week claimed.(3) In addition, a claimant who conceals work performed, wages earned, or another material fact concerning benefit 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.(4) This ineligibility is applied against benefits and weeks of eligibility for which the claimant would otherwise be eligible after the week of concealment.(5) 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.(6)
A claimant is presumed eligible for unemployment insurance benefits, and the party resisting payment must prove disqualification.(7) The burden to establish that a claimant concealed information is on the department.(8) Because it is a form of fraud, concealment must be proven by clear, satisfactory, and convincing evidence.(9)
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."(10) 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.(11) As a result, concealment will not be found where a claimant makes an honest mistake or misinterprets information received from the department.(12) Concealment requires an intent or design to receive benefits to which the claimant knows he or she is not entitled.(13) 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.(14)
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 was not entitled. If there is not sufficient direct evidence of concealment, the commission looks to see whether there is sufficient indirect evidence from which the commission can infer an intent to mislead or defraud the department in order to receive benefits to which the claimant knew he 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 the 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 the incorrect information in order to obtain benefits to which the claimant knew he 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 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 in filing a claim. If the evidence does not suggest that the claimant did so intentionally in order to obtain benefits, the inquiry ends and no concealment will be found.(15)
If the department presents sufficient indirect evidence to create an 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 reason 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 with 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, although the claimant still will be required to repay any benefits that were overpaid to the claimant. If the claimant fails to establish an honest mistake or good faith error in judgment, the inference of concealment remains and the commission will find concealment.
There was no direct evidence of concealment by the employee. Indirect evidence, however, was sufficient to support an inference that the employee provided incorrect information on her claim certifications in order to receive benefits to which she knew she was not entitled. There was no dispute that the employee filed claims for the weeks at issue, weeks 44 and 45 of 2013, and that she provided three incorrect answers on her two claim certifications. For week 44, she incorrectly reported that she did not quit a job, when in fact she quit her job for Waunakee Manor, and incorrectly reported that she did not work that week, when in fact she worked about eight hours and earned about $100. For week 45, she incorrectly reported that she did not work, even though she started working for Qualitemps that week, and earned about $270.
It was also established that the employee received her weekly benefit amount of $107 for each of weeks 44 and 45, and that these benefits were improperly paid as a result of the incorrect information the employee provided on her claim certifications. As to week 44, if the employee had accurately answered yes to the question of whether she had quit, she would have faced a disqualification from benefits. The employee gave no indication that her reason for quitting would have fit any statutory exception allowing immediate payment of benefits; in fact, in the February 21, 2014 statement she gave to the investigator, she was reported to say that she did not remember why she quit. At hearing, she did not question the accuracy of that part of the February 21st statement. Furthermore, even if some quit exception had applied, the employee would have been eligible for only a reduced benefit if she had accurately answered the question about whether she had worked and earned wages in week 44. Applying the partial benefit formula (Wis. Stat. § 108.05(3)) to the amount of her earnings, $101.50, the employee's benefit amount would have been reduced to $59 for week 44. As to week 45, the employee would not have been entitled to any benefit if she had accurately reported her earnings of $271.68. It is established, then, that the employee received benefits to which she was not entitled, because of the incorrect information she provided on her claim certifications.
A reasonable inference can be made that the employee acted purposefully in order to receive benefits. The employee acknowledged having read the Handbook for Claimants when she began filing claims, and acknowledged that she understood that she was required to report her work and wages on her weekly certifications. By week 44 of 2013, she was not new to claiming unemployment benefits; she had opened claims a couple of times in 2013 prior to filing her claims for the weeks at issue. She expressed no confusion about the meaning of the claim certification question asking whether she had quit a job, and the question itself is straightforward and not difficult to understand. Her only explanation for incorrectly answering the question was that she was not paying attention. Similarly, the employee's only explanation for answering no to the question concerning whether she had worked during weeks 44 and 45 was that she was not paying attention. Although the question concerning whether she had worked is problematic because of its compound nature,(16) making it more susceptible to misinterpretation, the employee denied being confused by the part of the question asking whether she had worked. In her testimony, the employee stated that she was unsure about when to report wages--when they were earned or when they were received--but that uncertainty does not explain her answering no to the question of whether she had worked during the week. Because she answered no, the system would not have prompted her to report her wages at all. Under the circumstances described above, it is fair to infer that the employee's acknowledged carelessness in filing her claims masked an intent to withhold information in order to obtain benefits.
The commission, then, turns to the question of whether the employee rebutted the inference through affirmative proof of good faith. The employee relies on alleged actions she took after she made her incorrect claim certifications in order to demonstrate her good faith. The primary evidence of this is in the statement summarizing the employee's interview with the claims investigator on February 21, 2014. It is indicated in the statement that the issue of possible concealment was detected on February 10, 2014, but according to the statement the employee contacted the department on February 4, 2014, several days prior to the detection date, to attempt to correct the misinformation that she provided on her claim certifications for weeks 44 and 45 of 2013. The summary of her statement reads as follows:
I realized that I didn't report it [the fact that she had quit and that she had worked and earned wages in weeks 44 and 45] but I didn't call to get it fixed until last month. I called on 02/04/14 and let them know I didn't report my wages. I don't have a good reason for not reporting before then. I had gotten a decision in the mail for not reporting a job refusal and I read the statute and I found out you can get fined and go to jail for not reporting so I called and reported that I worked. I didn't report that I quit and I should have but didn't.
The commission has recognized that an employee's efforts to correct information from a prior incorrect claim certification can rebut an inference of concealment. See Bilton v. H &R Block Eastern Enterprises, Inc., UI Dec. Hearing No. 13605682MW (LIRC Jan. 9, 2014); Harris v. Arandell Corporation, UI Dec. Hearing No. 13606536MW (LIRC Jan. 9, 2014). This situation, however, is distinguishable from those cases. If the employee had simply come to the realization that she had made a mistake and wanted to correct it, her efforts to correct the mistake by initiating a contact with the department might have indicated that she lacked fraudulent intent at the time the mistakes were made. But here, where having gotten penalized for failing to report a job refusal was the employee's impetus for reporting errors in her claim certifications for weeks 44 and 45, the employee's contact with the department was not so indicative of a lack of fraudulent intent at the time the erroneous claims were made, as much as it was indicative of a hope to avoid additional penalties.
In addition to the contact on February 4, 2014, the employee testified at hearing that she contacted the department in November 2013 to say that she had earned wages and did not want to make a weekly claim for week 45. If true, this testimony would only apply to the failure to report work in week 45, and would not apply to the failure to report her work or her quitting a job in week 44. The testimony, however, conflicts with the February 21st statement attributed to the employee. There is no reference to a November 2013 contact with the department in the February 21st summary of the employee's interview with the claims investigator. The February 21st statement not only omits any mention of the November contact, it affirmatively states that the employee said that her first attempt to report to the department was not made until February 2014.
The ALJ made no finding of fact that the employee contacted the department in November 2013. The commission consulted the ALJ in order to obtain her demeanor impressions, and specifically asked if the ALJ had any impressions regarding the employee's testimony about contacting the department in November 2013. The ALJ reported having no particular impressions about any of the employee's testimony.
The commission, having considered the testimony and other evidence in the record, does not find it credible that the employee made a good faith attempt in November 2013 to correct the misinformation that she provided in her claim certifications for weeks 44 and 45 of 2013.
The commission concludes, then, that the employee did not rebut the inference of concealment through affirmative evidence that she had made a good faith mistake, and finds that the employee concealed information from the department within the meaning of Wis. Stat. § 108.04(11).
The commission further finds that the employee was paid benefits in the amount of $214.00 for which she was not eligible and to which she was not entitled, due to her concealment. Wis. Stat. § § 108.04(11)(b) and 108.05(3)(d). The entire amount must be repaid to the department because the overpayment was not due to any error by the department and was caused partially or wholly by the employee, within the meaning of Wis. Stat. § 108.22(8)(a) and(c), and the employee is required to pay a penalty, equaling fifteen percent of the overpayment of benefits, in the amount of $32.10, within the meaning of Wis. Stat. § 108.04(11)(bh).
Finally, the commission concludes that the ALJ erred in computing the reduction in future benefits imposed on the employee under Wis. Stat. § 108.04(11)(be). Department records(17) indicate that in week 43 of 2013 the employee committed a single act of concealment, failing to report the refusal of a job offer.(18) Because of that prior act, the ALJ considered the three acts at issue here, occurring in weeks 44 and 45, to be "second-level" acts of concealment, deserving of a reduction of four times the employee's weekly benefit rate instead of only two times the weekly benefit rate. This was a misapplication of Wis. Stat. § 108.04(11)(be). Under that provision, the benefit reduction equals two, four or eight times the employee's weekly benefit rate (WBR), multiplied by the number of acts of concealment, with the increased penalties (four times and eight times the WBR) taking effect for acts occurring after a first or second
determination of concealment. The determination of the act of concealment in week 43 was not made until January 28, 2014, well after the occurrence of the acts of concealment at issue here. The reduction in future benefits pursuant to Wis. Stat. § 108.04(11)(be), then, should be only two times the employee's weekly benefit rate, multiplied by the number of acts of concealment, or $642.00.
The appeal tribunal decision, as modified, is affirmed. Accordingly, the employee is ineligible for benefits in weeks 44 and 45 of 2013, and is required to repay an overpayment in the amount of $214.00 to the Unemployment Reserve Fund, and an overpayment penalty of $32.10. The employee's benefit eligibility shall be reduced by $642.00 in unemployment benefits that become payable by February 22, 2020.
Dated and mailed September 19, 2014
lambech_urr . doc : 107 : BR 317 : BR 330
BY THE COMMISSION:
/s/ Laurie R. McCallum, Chairperson
/s/ C. William Jordahl, Commissioner
/s/ David B. Falstad, Commissioner
NOTE: The department will mail repayment instructions after this decision becomes final. The department will withhold benefits due for future weeks of unemployment in order to offset overpayment of unemployment insurance benefits and other special benefit programs that are due to this state, another state, or the federal government.
Contact the Unemployment Insurance Division, Collections Unit, P.O. Box 7888, Madison, WI 53707, to establish an agreement to repay the overpayment. The amount of the overpayment set forth above does not reflect any benefits withheld or payments that have been applied toward the overpayment. Information on the overpayment balance can be obtained by contacting the department at:
Madison Area: 608-232-0824
Milwaukee Area: 414-438-7713
Toll Free Number: 1-800-494-4944
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(1)( Back ) The employer, UI account number 179825 JA, was a named party only in Hearing No. 14000937MD.
(2)( Back ) Wis. Stat. § 108.04(11)(g).
(3)( Back ) Wis. Stat. § 108.05(3)(d).
(4)( Back ) Wis. Stat. § 108.04(11)(a), (b) and (be).
(5)( Back ) Wis. Stat. § 108.04(11)(bm).
(6)( Back ) Wis. Stat. § 108.04(11)(bh).
(7)( Back ) Wis. Stat. § 108.02(11); Kansas City Star Co. v. DILHR, 60 Wis.2d 591, 602, 211 N.W.2d 488 (1973).
(8)( 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).
(9)( 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).
(10)( Back ) Princess House, Inc. v. DILHR, 111 Wis.2d 46, 62, 330 N.W.2d 169 (1983).
(11)( Back ) Liberty Loan Corp. & Affiliates v. Eis, 69 Wis.2d 642, 649, 230 N.W.2d 617 (1975).
(12)( Back ) In re Joseph Hein, Jr., UI Dec. Hearing No. 00605374MW (LIRC Dec. 13, 2001); In re Scott Lynch, supra.
(13)( Back ) Karandjeff v. Cmty Living Alliance Inc., UI Dec. Hearing No. 11611430MW (LIRC June 20, 2012); Holloway v. Mahler, supra, and cases cited therein; Nestor Gutierrez, UI Dec. Hearing No. 00005766MD (LIRC July 19, 2002).
(14)( Back ) Krueger v. LIRC & Gen. Motors Assembly Div., No. 81-CV-559A (Wis. Cir Ct. Rock Cnty. Dec. 3, 1982).
(15)( Back ) In re Leonard Miszewski, UI Dec. Hearing No. 12401605AP (LIRC Nov. 30, 2012).
(16)( Back ) The question is: "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?"
(17)( Back ) Specifically, a Fraud Rationale and Penalty Assessment Worksheet dated January 28, 2014.
(18)( Back ) This is apparently the decision that prompted the employee's contact with the department on February 4, 2014, referred to in the discussion above.