CHARLES A O'NEILL, Employee
RITEWAY BUS SERVICE INC, Employer
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.
For Hearing No. 15600518MW, the ALJ held that, beginning in week 48 of 2014, the employee worked and earned wages, including holiday pay, and that he concealed those wages on his weekly claim certifications. The employee was required to repay the amount of $506.00 to the Unemployment Reserve Fund for benefits he received to which he was not entitled. The employee was also required to pay a concealment overpayment penalty of $75.90 (15 percent of $506.00).
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 has worked since March 2, 2011, as a bus driver for the employer. He generally works 28 hours per week driving a school bus. He drives a morning route and an afternoon route. The employee also works an additional 10 hours per week driving charter buses for the employer in the evening. The employee's regular wage rate for routes is $13.05 per hour. For charters, he earns $11.00 per hour. The employee periodically receives small bonuses for safe driving and good attendance. For overtime, the employee is paid $6.53 per hour in addition to his regular hourly rate. Beginning with Thanksgiving Day 2014, the employee was eligible for holiday pay.
The employer provides the employee a weekly breakdown of his hours worked in the previous week, but the amount the employee is paid for routes, charters, bonuses, and holidays is not included on the breakdown. The employee is paid weekly by direct deposit, and paystubs are only made available to him online.
Generally, the employee only files for unemployment insurance benefits when schools are closed for full or partial weeks. The employee has filed claims for benefits on and off since 2012. Due to the complex nature of the manner that the employer uses to calculate his pay, the employee and the employer frequently report different amounts to the department. Wage discrepancies occur often.
The employee reopened his claim for unemployment insurance benefits on November 24, 2014 (week 48). His weekly benefit rate is $253.00. The employee reported that he continued to work for the bus company. However, when the employee filed his claims for weeks 48 and 49 of 2014, he answered "No" to Question No. 4, "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?"
The employer reported that in week 48 of 2014, the week ending November 29, 2014, the employee earned gross pay of $356.48, of which $72.21 was holiday pay for Thanksgiving. The employer reported that in week 49 of 2014, the week ending December 6, 2014, the employee earned gross pay of $546.92. The employee agreed with the hour and wage information reported by the employer.
The employee uses a pay phone at the public library to file his claims. His cell phone does not work very well. The employee does not have a computer at home with Internet access. When asked why he did not report work, wages, or holiday pay on his claims for weeks 48 and 49 of 2014, the employee explained that he still gets confused with how to answer Question No. 4 properly. He worked, but he did not receive and would not receive sick pay, bonus pay, or commission. Although he has been told in the past that he must answer that question in the affirmative, it seems to him that the question should be answered in the negative, and he gets confused. The employee reports what he believes is correct, but differences occur because he does not get pay stubs from the employer, and its payroll system is complex.
The issues to be decided are whether the employee concealed work and wages from the department when filing his claims for unemployment benefits for weeks 48 and 49 of 2014; whether he received benefits to which he was not entitled and which he must repay; and whether concealment penalties and future benefit reductions must be assessed.
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 his or her obligations and benefit rights under the unemployment insurance law.(2)
In this case, the employee worked and earned wages in weeks 48 and 49 of 2014. He was entitled to unemployment insurance benefits of $34.00 for week 48, when the partial benefits formula is applied to his gross wages of $356.48, which includes holiday pay treated as wages for unemployment insurance purposes. The employee was not entitled to any benefits for week 49 under the partial benefits provision of the unemployment insurance law, because he worked too many hours and earned too much money. Therefore, because the employee had received full benefits for those weeks, he received benefits for which he was not eligible and to which he was not entitled.
There is no direct evidence of concealment. The employee denied any intent to mislead or defraud the department. The indirect evidence in the record points to an honest mistake on the part of the employee.
The employee has never tried to hide the fact that he works for the employer. The employee reopened his claim for unemployment benefits in week 48 of 2014, because he would be working a shortened week due to the Thanksgiving holiday. The employee informed the department that he continued to work for the employer. Prior to Thanksgiving Day 2014, the employee had never received holiday pay. The holiday pay he received was for only 5.8 hours. The employee was not paid for hours that he missed when schools were closed on the Friday after Thanksgiving.
The employee answered the questions asked of him by the department on its continued claims form to the best of his ability. He continued to be confused by the compound nature of Question No. 4, which asks "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?" Although this compound question has long been an identified cause of misunderstanding by claimants and a known source of improper payments, the department has not heeded a June 2011 national "call to action" to rid claim forms and telephone scripts of two-part questions to ensure that claimants understand what is being asked.(3) While the employee could have made a more concerted effort to notify the department that he did, in fact, receive holiday pay in week 48 of 2014, the issue of whether the employee concealed a material fact (holiday pay)(4) was not noticed for hearing and, thus, is not now properly before the commission. No waiver of the notice requirement was sought or obtained from the employee.
The commission therefore finds that, in weeks 48 and 49 of 2014, the employee worked and earned wages but did not conceal that work and those wages, within the meaning of Wis. Stat. § § 108.02(26) and 108.04(11)(b), on his weekly claim certifications.
The commission further finds that, in week 48 of 2014, the employee received holiday pay, which, pursuant to Wis. Stat. § 108.05(4)(a), must be treated as wages for purposes of calculating his eligibility for benefits.
The commission further finds that, in week 48 of 2014, the employee worked fewer than 32 hours and earned wages, including holiday pay, totaling less than $500.00, and, pursuant to Wis. Stat. § 108.05(3)(c), is entitled to partial benefits of $34.00 for that week.
The commission further finds that, in week 49 of 2014, the employee worked more than 32 hours and earned wages greater than $500.00, and, pursuant to Wis. Stat. § 108.05(3)(c), is not entitled to any benefits for that week.
The commission further finds that the employee was overpaid benefits in the amount of $472.00 and must repay the entire amount to the Unemployment Reserve Fund.
The commission further finds that the employee's failure to report work and wages on his 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 appeal tribunal decisions are modified to conform to 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 a partial unemployment benefit payment of $34.00 for week 48 of 2014. He is ineligible for benefits for week 49 of 2014. The employee is required to repay the sum of $472.00 to the Unemployment Reserve Fund. There is no concealment overpayment penalty or benefit amount reduction.
Dated and mailed May 28, 2015
oneilch_urr . doc : 152 : BR 330 : PC 713 : PC 714.03
BY THE COMMISSION:
/s/ Laurie R. McCallum, Chairperson
/s/ C. William Jordahl, Commissioner
/s/ David B. Falstad, Commissioner
The employee petitioned for commission review of the appeal tribunal decision. In his petition, the employee objected to the manner in which the ALJ conducted his concealment hearing. The employee believed that he was not given the opportunity to explain his case completely and fairly, and he questioned the ALJ's objectivity. The employee asked that he be granted another hearing in this matter.
While the commission may, at its discretion, order the taking of additional evidence in matters before it, the commission does so only in limited circumstances. Such circumstances are not present here. The record does not demonstrate that the employee's opportunity to present testimony or documents as evidence was improperly limited at the hearing. The employee's assertion that the ALJ was biased need not be resolved, because the commission has made its own decision in this case based on the evidence and has done so without bias. The commission is confident that the employee has received a fair decision. Therefore, the employee's request for further hearing will not be granted.
The commission notes, however, that the ALJ placed the burden of proving concealment on the wrong party. The ALJ stated that it was the employee's burden to prove that there was no concealment. This is incorrect. As the commission and the department have stated for decades, the burden to establish that a claimant concealed information is on the department.(5)
Before reversing the appeal tribunal decisions in part, the commission asked the ALJ if she had any personal impressions of the witnesses' testimony that factored into her decisions. She did not.
[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]
(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 ) See, e.g., Shaw v. Dr. Howard L. Fuller Educ. Found., UI Dec. Hearing Nos. 13609591MW, 13609592MW, and 13609593MW (LIRC June 12, 2014), aff'd Wis. Dept. of Workforce Dev. v. Wis. Labor & Indus. Rev. Comm'n and Shaw, Case No. 14 CV 5910 (Wis. Cir. Ct. Milwaukee County Apr. 9, 2015); Unemployment Insurance Program Letter No. 19-11, U.S. Department of Labor, Employment and Training Administration, June 10, 2011, pp. 4-7.
(4)( Back ) Vacation pay and holiday pay are treated as "wages" for purposes of the partial benefit formula, but they are not wages. See Wis. Stat. § 108.05(3); UID-M 13-26, issued Dec. 6, 2013, and revised Dec. 9, 2013. If a claimant conceals vacation or holiday pay, it is considered concealment of a material fact under Wis. Stat. § 108.04(11)(a), and the partial wage formula applies. Concealment of wages, on the other hand, falls under Wis. Stat. § 108.04(11)(b). If a claimant conceals wages in any given week, the claimant is ineligible to receive any benefits for that week.
(5)( Back ) See, e.g., DWD, UI, Bureau of Legal Affairs' Standard Inserts & Paragraphs, October 2013, FR121: "In order to impose a forfeiture on a UI claimant, the burden of proof is on the department to present clear, satisfactory and convincing evidence of fraud. Sylvia M. Lubow v. LIRC, Washington Cty. Cir. Ct., Case No. 91-CV-427, January 30, 1992."