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

ROBERT D VASQUEZ, Employee

FEDEX SMARTPOST INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing Nos. 14602073MW and
14602074MW



MODIFIED COMMISSION DECISION

Pursuant to authority granted in Wis. Stat. § 108.09(6)(b) the commission sets aside and reinstates its decision issued on September 19, 2014 as follows:

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. In his petition, he asserts that it is unconstitutional to have a hearing without an attorney present on his behalf, given his low income and part-time work. He also asserts that he properly answered the questions on his weekly claim certifications indicating that he had worked during the weeks at issue; that he had not had this problem in previous claims although his mathematical wage calculations may not have always been accurate; and that he answered truthfully to the best of his ability and did not intentionally withhold information about his part-time employment.

The commission has considered the petition and it has reviewed the evidence submitted to the ALJ. The digital recording has also been reviewed. The ALJ held one hearing that covered the issues contained in both hearing numbers. The employee appeared at the hearing, and the employer appeared by its senior business human resources representative. No one appeared at the hearing to testify or present evidence on behalf of the department. The ALJ obtained and marked department records throughout the hearing, and received 10 exhibits into the evidence during the hearing.

At the outset, the commission notes that, in Hearing No. 14602074MW, the ALJ increased the benefit reduction amount found by the department by including two additional acts of concealment, two weeks in which the employee did not report holiday pay. However, these were not part of the department's determination, which dealt only with work and wages. In addition, in describing the issues at the hearing, the ALJ focused on work and wages and did not identify a failure to report holiday pay as one of the issues in the hearing, nor did the employee affirmatively agree to add that as an additional issue. Jurisdiction of the issue was not properly obtained and proper notice was not given to apprise the employee of the issue or to allow him to adequately prepare for it. Therefore, although the manner in which the employee handled holiday pay in his benefit claims may be pertinent to the work and wages issues, the commission will not make findings regarding concealment of holiday pay.

Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee has worked as a parcel assistant for the employer since October 13, 2010, and continues to do so. He works part-time, about 20 hours per week, and has filed weekly claims for partial unemployment benefits during this employment. In particular, he initiated a claim in April of 2010; another claim in June of 2011; and his current claim, initiated in July 2013 and beginning with week 27 of 2013. For the claim he initiated in April 2010, his weekly benefit rate (WBR) was $357; for his claim initiated in June of 2011, his WBR was $253; and for his current claim, his WBR is $142.00.

During the weeks at issue in this case, weeks 42 through 52 of 2013, the employee earned $11.00 per hour.(4) The employer pays its workers on Fridays for the previous week. The department considers each week to run from Sunday through Saturday, per Wis. Stat. § 108.02(27), and the employer appears to pay its workers using the same workweek.

One of the department records introduced by the ALJ and marked as Exhibit 4 was described by her as an "overnight report" containing the history of the employee's unemployment insurance claims. The exhibit, designated at the top of each page as an ADJUDICATOR'S PRELIMINARY CLAIMANT REPORT, indicates that beginning with his June 2011 claim, and including weeks in his current claim, a portion of the employee's benefit payment was offset and another portion allocated to child support. The exhibit indicates that the employee did not begin to receive $142 (his full weekly benefit rate) until week 51 of 2013.

Exhibit 4 also indicates that in numerous prior weeks the employee and the employer provided the department with different amounts that the employee was paid. In many of those weeks, the employee reported that he earned more than the employer reported that he had earned, including weeks 27, 28, 30, 31, 33, 35, 36, and 38 of 2011. In fact, a careful review of the wages reported by both the employee and the employer in those weeks reveals that the employer reported the same wages as the employee did; however the employer reported those wages in the previous week. Based upon the information in this exhibit, it appears that the department credits the wages reported by the employer regardless of whether they are higher or lower than the wages reported by the employee. Accordingly, if the employer reported lower wages than the employee, the department paid the employee benefits based upon those lower wages, typically a higher benefit amount; if the employer reported lower wages than the employee had reported, an overpayment of benefits paid was found, and the employee was required to repay the department the erroneously paid benefits.

The ALJ introduced, and marked as Exhibit 10, department records associated with week 28 of 2008 and week 34 of 2011, weeks in which the employee was required to repay a benefit overpayment made to him. Week 34 of 2011 was one of the weeks noted above, in which the employee reported the same wages as the employer had done for the previous week. The exhibit included explanatory documents the department customarily sends to an employee explaining the overpayment and the importance of taking care to accurately complete claims. No concealment by the employee was found in either week.

For the weeks at issue, the employer provided the following information about the employee's work and wages:

Week No.

Week ending

Hours

worked

Gross wages

earned

Gross

Holiday pay

Holiday hours

42/2013

October 19

21.05

$231.55

 

 

43/2013

October 26

20.20

$222.20

 

 

44/2013

November 2

22.45

$246.95

 

 

45/2013

November 9

21.75

$239.25

 

 

46/2013

November 16

21.85

$240.35

 

 

47/2013

November 23

29.85

$328.35

 

 

48/2013

November 30

21.85

$240.35

$166.10

7.55

49/2013

December 7

40

$440.00

$80.85

4.90

50/2013

December 14

36

$396.00

 

 

51/2013

December 21

17.90

$196.90

 

 

52/2013

December 28

16.80

$184.80

$166.10

7.55

The employee did not dispute the work hours and wages reported by his employer.(5)

The ALJ introduced and marked two other department records, Exhibit 5 and Exhibit 8. She described Exhibit 5 as a printout of the weekly claim certification answers the employee gave for weeks 27 through 42 of 2013. Exhibit 8 contains the same information for weeks 45 through 52 of 2013. There were no corresponding documents in the record for weeks 43 and 44 of 2013. These exhibits reflect that the employee filed his weekly claims by telephone for the weeks at issue, using the department's IVR (interactive voice response unit), a system that speaks the instructions and eligibility questions, and the employee answers the questions using numbers on his telephone keypad.

One of the questions on the weekly claim certifications, Question 4, relates to work the employee did that week. Although the exhibits do not contain the actual wording of the question asked, the ALJ asked the employee (after marking Exhibit 5) if he agreed that the actual wording of that question was "During the week, did you work or did you receive or will you receive sick pay, bonus pay, or commission. If yes, press 9, if no press 6." This question was first asked at about 38:11(6) into the hearing and, although the employee at one point appears to agree that this is the question asked, he expresses confusion about the exact wording of the question thereafter.(7) In response to his confusion, the ALJ states, at 44:08, that she is "on the department's website that has the exact language for the script that played on the telephone voice recording for every claimant who calls in." When the employee indicates a lack of understanding of her questions, she does not clarify the meaning of her question, but repeatedly states that she is reading "verbatim" from the script.

The employee testified that he responded "yes" to Question 4, but was not asked for his hours worked or wages earned. The ALJ repeated the question numerous times, and the employee remained insistent that he answered "yes" to Question 4, that he had answered "yes" that he had worked. He does not own a computer, and he used a free government-issued cellphone to file his weekly claims for the weeks at issue. He contacted the cellphone company to see if he could get records showing that he answered "yes" to Question 4, but was told that the only thing that could be verified was that he called the unemployment number. He noted that the cellphone is a cheap phone, and that the buttons for numbers 6 and 9 are so close together that people could make a mistake by pushing the wrong buttons. However, he also stated that he was not saying that is what he did.

Exhibit 5 indicates that the employee responded "yes" to Question 4 for week 27 of 2013(8) (the first week of his current claim), and provided the information that he worked 18 hours that week, earning $193.00, and 4 holiday hours, earning $40.00, for a total of $233.00. Exhibit 4 indicates that the employer reported that the employee earned $106.58 in regular pay and $74.55 in holiday pay, for a total of $181.13, in week 27 of 2013.

Exhibit 8 indicates that the employee responded "no" to Question 4 for the following weeks at issue: weeks 42, 45, 46, 47, 48, 49, 50, 51, and 52 of 2013. This exhibit also indicates that he responded "yes" to Question 5.A. in week 48 of 2013, indicating that he received 7:30 hours of holiday pay totaling $80.00. He responded "no" to Question 5.A. for weeks 49 and 52 of 2013. Although he had earlier agreed that the employer's information about his work and wages was correct, he expressed confusion as to why he would have received holiday pay for Thanksgiving in week 49, the week after Thanksgiving. He agreed that he received holiday pay for Christmas (week 52) and stated that he must have made a mistake if he did not report that pay, noting that he did not know about this mistake until the ALJ pointed it out to him.

There is an apparent inconsistency in the department's documents. Exhibit 4 (the record containing information about the employee's claim history) does not indicate that the employee reported holiday pay in week 48 of 2013. However, Exhibit 8 (the weekly claim certification) indicates that he did report holiday pay.

The employer provided a document, Exhibit 2, in which check dates were provided for each paycheck issue to the employee. A comparison between these check dates and the dates that the employee filed his weekly claims (on Exhibits 5 and 8) indicates that the employee filed his weekly claims prior to the date that each paycheck for that specific week was dated.

Exhibit 6, another of the documents introduced by the ALJ, consists of several pages. The first page, designated as a FORMS SENT INQUIRY SCREEN, was described by the ALJ as a department record showing that a claim confirmation letter was mailed to the employee on July 2, 2013, soon after he initiated his current benefit claim. She described the second and third pages of the exhibit as the claims confirmation letter and the last page as a copy of a claimant handbook notice. However, the second and third pages of the document (the claim confirmation letter) show a revision date of October 4, 2013, so could not have been a document mailed to the employee on July 2, 2013. In addition, the FORMS SENT INQUIRY SCREEN does not indicate that the claimant had been sent a notice about the claimant handbook, which is designated with the form number UCB-17399-P. In addition, the employee stated that he did not receive the claim confirmation letter the ALJ described.

The ALJ also introduced a 24-page department document, designated "Handbook for Claimants," and marked it as Exhibit 7. The employee agreed with the ALJ that he had received the handbook, read it, and knew that he was required to report his work and wages on his weekly claim certifications. However, although the employee likely received a claimant handbook after initiating his previous benefit claims, it is important to note that as of June 20, 2013, the Unemployment Insurance Division discontinued mailing printed copies of the handbook(9) and, therefore, the claimant would not have received a copy of the handbook after he initiated his current claim. Accordingly, although he accepted the ALJ's assertion that he received a handbook and that he read certain portions of it, as he did with many of the ALJ's assertions, he did not receive a handbook after filing his current claim and could not easily access the handbook online because he did not have a computer. As a result, there is no competent evidence that he was familiar with the department's change in the wording of Question 4 on the weekly claim certification, as is discussed in detail in the Application section of this decision.

The employee maintained throughout the hearing that, although he may have made mistakes on some of his weekly claims, those were honest mistakes and he did not intentionally provide incorrect information to the department in order to receive benefits to which he was not entitled.

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.

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."(10)

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.(11) 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.(12) This ineligibility is applied against benefits and weeks of eligibility for which the claimant would otherwise be eligible after the week of concealment.(13) 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.(14)

A claimant is presumed eligible for unemployment insurance benefits, and the party resisting payment must prove disqualification.(15) The burden to establish that a claimant concealed information is on the department.(16) Because it is a form of fraud, concealment must be proven by clear, satisfactory, and convincing evidence.(17)

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."(18) 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.(19) As a result, concealment will not be found where a claimant makes an honest mistake or misinterprets information received from the department.(20) Concealment requires an intent or design to receive benefits to which the claimant knows he or she is not entitled.(21) 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.(22)

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 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 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 in filing a claim. If the evidence does not suggest that the claimant did so intentionally in order to obtain benefits to which the claimant knew he or she was not entitled, the inquiry ends and no concealment will be found.(23)

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.

Application

In this case, there is no direct evidence of concealment, so it is necessary to review the indirect evidence in the record to determine whether the circumstances create an inference that the employee provided incorrect information to the department to obtain benefits to which he knew he was not entitled.

There is no dispute that the employee filed claims for benefits for weeks 42 through 52 of 2013 and that he worked for the employer and earned wages during those weeks. However, he disputed that he provided incorrect information to the department in his weekly claim certifications, and indicated that he answered "yes" when asked if he had worked each week.

As to weeks 43 and 44 of 2013, there was no evidence presented of the questions asked and answers provided for the employee's weekly claim certifications. Although Exhibit 4, the department record containing information about the employee's claim history, does not show that the employee provided information that he worked and earned wages in those weeks, the commission is unwilling to accept that document as sufficient evidence that he did not provide that information to the department, particularly when he testified to the contrary. There was no evidence presented to show that the information on this exhibit is an accurate representation of the employee's responses on his weekly claim certifications. For example, the exhibit did not show that the employee reported his holiday hours and pay in week 48 of 2013, despite evidence of his reporting holiday pay and hours in his weekly claim certification for that week. Therefore, the commission concludes that it has not been established that the employee provided incorrect information to the department about his work and wages in weeks 43 and 44 of 2013 and, accordingly, it has not been established that he concealed work and wages during those weeks. The matter of his benefit eligibility in those two weeks will be remanded to the department for an investigation of whether he worked and earned wages in those weeks and whether he was overpaid any benefits for those weeks that must be repaid to the department.

As to week 42 and weeks 45 through 52 of 2013, the weekly claim certifications in the record indicate that the employee answered "no" to Question 4 relating to whether he worked during those weeks. He repeatedly disputed the accuracy of these records, stating that he had responded "yes" to that question. He did, however, agree with the work hours and wages provided by the employer for the weeks at issue, and the evidence established that he was paid benefits by the department for the weeks at issue based upon the department's receipt of information from him that he did not work during the weeks at issue. Therefore, for purposes of this analysis, the commission concludes that the employee provided incorrect information about his work and wages to the department in week 42 and weeks 45 through 52 of 2013, and that he was improperly paid benefits as a result of that incorrect information

The next step in the analysis is to determine whether the circumstances in this case allow the commission to draw a reasonable inference that the employee intentionally provided incorrect information in order to obtain benefits to which he knew he was not entitled.

As noted previously, an incorrect answer to Question 4, without more, does not create an inference of concealment. In this case, there is ample evidence in the record that the employee was confused by the question. Although he repeatedly insisted that he answered "yes" to the question as to whether he worked, it is not clear that he was aware that the question had changed from the time of his 2011 claim.

The department's manual update, UID Number 12-25, issued on October 31, 2012 documents that this change was effective with week 43 of 2012 (week ending October 27, 2012). Question 4 was changed from a simple "Did you work?" to the compound question "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" As the commission has noted in recent cases, including Smith v. Journal Sentinel, Inc., UI Dec. Hearing Nos. 13610174MW, 13610175MW (LIRC July 31, 2014) and Van De Loo v. Bemis Manufacturing Co., UI Dec. Hearing Nos. 13403969AP, 13403970AP (LIRC May 30, 2014), Question 4 is a compound question, and as such, it is now more susceptible to misinterpretation. In fact, several years ago, the federal government encouraged states to rid their continued claims scripts of two-part questions, because such questions confuse claimants and lead to improper payments. See Unemployment Insurance Program Letter (UIPL) No. 19-11, titled National Effort to Reduce Improper Payments in the Unemployment Insurance (UI) Program, U.S. Department of Labor, Employment and Training Administration, June 10, 2011, pp. 4-7.

Therefore, since no inference of concealment can be made from the simple fact of incorrectly answering Question 4, the commission looks to other evidence in the record, including evidence of the employee's weekly claims in the weeks at issue and his previous claims.

Although the ALJ repeatedly stated to the claimant that he had received his full weekly benefit amount(24) and questioned him as to why he was not on notice that he was being overpaid, the employee was not actually receiving his full weekly benefit amount. Instead, his weekly benefits were being reduced by offsets and child support payments. Therefore, it is not clear from the evidence that he would have been aware that he was being overpaid benefits. In addition, his WBR of $142.00 for this benefit year was significantly lower than it had been for his two previous benefit years ($357 for his claim initiated in April 2010 and $253 for his claim initiated in June 2011), resulting in significantly lower benefits each week than he had received in his previous benefit years. This lower WBR would be consistent with his understanding that he was indicating to the department that he was working and that the department knew that he was working.

Similarly, it is reasonable to infer that the employee would not have been aware of differences in his ongoing claims from week 27 of 2013 (when he correctly answered "yes" to Question 4) to the following weeks, because week 27 was a "waiting week" for which he received no benefits.

It is noteworthy that the employee did report receiving holiday pay on his weekly claim certification in week 48 of 2013. Week 48 of 2013 is the week ending November 30, 2013, which would have included Thanksgiving day, a holiday. The question about holiday pay is a separate question (Question 5.A.) on the weekly claim certification, and the weekly claim certification shows that the employee reported that he worked 7:30 and earned $80.00, which would have been the approximate earnings amount if he was paid $11.00 per hour for that work. In addition, the exhibits demonstrate that the employee filed each weekly claim prior to the date his paycheck was issued for that week, indicating that he was not aware of the amount of his holiday pay when he filed his weekly claim for week 48 of 2013 and, in week 49 of 2013, he may not have even been aware that he was receiving holiday pay that week.

The claimant's history of filing claims does not raise an inference of concealment on his part. Since October 2010, the employee has worked part-time hours for the employer so he has been required to provide his work hours and earnings, as well as holiday hours and pay, in his weekly claims. During this time, he and his employer have frequently reported different amounts for his earnings. The reason for this appears to be that the employer reports pay one week and the employee reports the same amount of pay for the following week. It also appears from evidence in the record that the employee customarily files his weekly claim reporting work hours and earnings prior to his receipt of each paycheck, relying on his records and his understanding of which week is involved. This reporting pattern is not what one would expect from an individual who is trying to receive more benefits than he is entitled to receive. Instead, it appears to be the result of confusion about which week's work and wages are being reported; in fact, the claimant's filing history indicates that, although he may have made mistakes in the past in reporting his wages, these were unintentional acts on his part, not made purposefully to receive higher benefits than he was due.

In addition, even though there have been these differences between the employee and the employer in reporting wages earned, the department has never before concluded that the employee intentionally concealed work or wages. He may have received documents from the department cautioning him about carefully reporting his weekly wages and noting that incorrect numbers might result in overpayments that must be repaid or, if intentional concealment is found, penalties might be assessed. However, those documents have also noted that intentional concealment has not been found in the employee's reporting of his work and wages.

Accordingly, the commission concludes that it is not reasonable to infer that the employee intentionally provided incorrect information to the department in order to receive benefits to which he knew was not entitled in week 42 and weeks 45 through 52 of 2013. Any mistakes made were honest mistakes without an intent to conceal information or to defraud the department.

Nevertheless, the employee did receive benefits to which he was not entitled. In both weeks 49 and 50 of 2013, he worked over 32 hours and, per Wis. Stat. § 108.05(3)(c), he is not eligible for any benefits for those two weeks, and was overpaid $142.00 for each of those weeks. The following table provides that information as well as benefits paid, benefits due, and the overpayment amount (utilizing the partial wage formula)(25) for weeks 42, 45, 46, 47, 48, 51, and 52 of 2013.

 

Week No.

Total wages earned, including holiday pay

Benefits paid

Benefits due

Overpayment amount

42/2013

$231.55

$142.00

$6.00

$136.00

45/2013

$239.25

$142.00

None

$142.00

46/2013

$240.35

$142.00

None

$142.00

47/2013

$328.35

$142.00

None

$142.00

48/2013

$406.45

$108.00

None

$108.00

49/2013

$520.85

$142.00

None

$142.00

50/2013

$396.00

$142.00

None

$142.00

51/2013

$196.90

$142.00

$30.00

$112.00

52/2013

$350.90

$142.00

None

$142.00

The commission therefore finds that in week 42 and weeks 45 through 52 of 2013 the employee worked and earned wages, but he did not conceal from the department the work performed and wages earned in those weeks, within the meaning of Wis. Stat. § 108.04(11)(b), and is, therefore, entitled to partial benefits pursuant to Wis. Stat. § 108.05(3), as set forth above.

The commission further finds that the employee's failure to report work and wages on his weekly claim certifications for week 42 and weeks 45 through 52 of 2013, while not fraudulent, prevents waiver of recovery of the overpayment, under Wis. Stat. § 108.22(8)(c), and he must repay the overpaid benefits in the amount of $1,208.00.


DECISION and ORDER

The appeal tribunal decisions are modified to conform to the above findings of fact and conclusions of law and, as modified, Hearing No. 14602073MW is affirmed in part and reversed in part, and Hearing No. 14602074MW is reversed. Accordingly, the employee is entitled to partial unemployment insurance benefits for weeks 42 and 51 of 2013 as set forth above. The employee is required to repay the overpaid benefits for week 42 and weeks 45 through 52 of 2013 in the amount of $1,208.00. The employee's future unemployment insurance benefit amount shall not be reduced, and there is no overpayment penalty. The commission remands to the department for adjudication the issues of whether the employee worked and earned wages in weeks 43 and 44 of 2013 and whether he was overpaid benefits in those weeks that he must repay.

Dated and mailed  September 24, 2014

vasquro_urr . doc : 120 : BR 330 : PC 729

BY THE COMMISSION:

/s/ Laurie R. McCallum, Chairperson

/s/ C. William Jordahl, Commissioner

/s/ David B. Falstad, Commissioner


MEMORANDUM OPINION

In his petition for review, the first thing that the employee asserts is that he should have been given an attorney for this hearing. Attorneys are not provided for unemployment insurance hearings(26) and, in fact, most parties do not engage attorneys to represent them in these hearings.

However, the employee's assertion is understandable. In particular, the ALJ's demeanor and manner of questioning the employee did not give the appearance of impartiality. Instead the ALJ appeared to be acting as a representative of the department, whose task it was to present evidence in support of the department's findings of the employee's intentional concealment of work and wages. In addition, she was harsh and abrupt, interrupted the employee repeatedly, "testified" about the documents that she brought forth and information apparently contained on the department's website (there was no department witness or representative present to explain the department's position or to introduce, authenticate, or explain the many department documents the ALJ presented), repeatedly asked the employee long, compound, and leading questions material to the issues in dispute, and was discourteous and impatient with him when he expressed confusion about her questions. Finally, during the hearing, she improperly added two acts of concealment to the issues-acts that had not been part of the department's determinations and for which the employee would not have been on notice-resulting in additional benefit reductions to the claimant.

The commission finds this conduct to be troublesome, especially in a quasi-criminal case such as this one, where the purpose of the hearing is to determine whether the employee has behaved fraudulently. The potential consequences are far more serious to the employee than in typical unemployment hearings, including harm to reputation, monetary penalties, ineligibility for future unemployment benefits for an extended period of time, and possible imprisonment for up to 90 days. See Wis. Stat. § § 108.04(11)(b), (be), (bh), (bm) and 108.24(1).

As noted previously, due to its nature, concealment must be proven by clear, satisfactory, and convincing evidence, a higher standard of proof than is imposed for other findings in unemployment cases. That burden of proof resides with the department and, in such cases, it is critical that a fair and unbiased hearing be provided, one in which the employee is afforded a reasonable opportunity to present his case in an impartial setting.



Appealed to Circuit Court.  Affirmed, March 16, 2015.  [Circuit Court decision summary].

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Footnotes:

(1)( Back ) The ALJ also found that the employee was not eligible for benefits in week 49 of 2013 because he worked 32 or more hours and because he earned at least $500.00, and that he was not eligible for benefits in week 50 of 2013 because he worked 32 or more hours.

(2)( Back ) The ALJ also remanded the case to the department to investigate the employee's benefit eligibility in weeks 28 through 41 of 2013.

(3)( Back ) The ALJ erroneously used December 29, 2020 instead of the correct date, February 29, 2020.

(4)( Back ) The commission has relied on the employer's payroll report containing the employee's work and wages, Exhibit 2. Of note, both parties testified to different hourly pay amounts. The employer's representative testified that the employee earned $12.21 per hour during 2013, and the employee testified that he earned $11.50 per hour until sometime in 2014.

(5)( Back ) In this regard, the employee was extremely deferential during the hearing and agreed with many of the questions asked of him by the ALJ. It is not clear, given the manner in which the hearing was conducted, whether all of his responses were considered responses to questions asked, or whether he felt pressured to, and did, respond affirmatively.

(6)( Back ) The colon separates minutes and seconds.

(7)( Back ) The commission discusses aspects of the hearing in its memorandum opinion, including its concerns about the ALJ's conduct in developing the record.

(8)( Back ) Although this week is not at issue in this case, the ALJ presented evidence of this weekly claim.

(9)( Back ) This information is contained in a UI policy manual update dealing with the claimant handbook, 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.

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

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

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

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

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

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

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

(17)( 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).

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

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

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

(21)( 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).

(22)( 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).

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

(24)( Back ) The employee appeared to agree with that, although the commission notes that the ALJ's questions to him forcefully "suggested" the answers that she appeared to want to receive.

(25)( Back ) Pursuant to Wis. Stat. § 108.05(3)(a), if an eligible employee earns wages in a given week, the first $30 of the wages is disregarded and the employee's applicable weekly benefit payment is reduced by 67% of the remaining amount, except that no such employee is eligible for benefits if the benefit payment would be less than $5 for any week.

(26)( Back ) The constitutional right to assistance of counsel, found in the Sixth Amendment to the United States Constitution, is applicable to criminal proceedings. Although various state laws require that attorneys be appointed in certain kinds of civil proceedings, there is no right to an attorney in an unemployment insurance proceeding in Wisconsin. 


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