JOSE J ATILANO, Employee
SBM SITE SERVICES LLC, 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. 16000036MD, the ALJ held that, in week 44 of 2015, the employee worked and earned wages and that he concealed that work and those wages on his weekly claim certification. The employee was required to repay the amount of $370.00 to the Unemployment Reserve Fund. The employee was also assessed and required to pay a concealment overpayment penalty of 40 percent of that amount ($148.00).
For Hearing No. 16000037MD, the ALJ held that, for week 44 of 2015, the employee concealed work and wages on his weekly claim certification. As a result, in addition to the concealment overpayment penalty assessed in Hearing No. 16000036MD, there was to be a reduction of $740.00 in benefits that might otherwise become payable during the six-year period ending December 4, 2021.
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 affirms the appeal tribunal decisions based on the following:
The employee initiated a claim for unemployment insurance benefits on April 27, 2015 (week 18), reporting a lay off. His weekly benefit rate was calculated to be $370.00. The employee had most recently received benefits in 2009.
The employee filed claims for weeks 18 through 44 of 2015 by telephone, using the department's interactive voice response (IVR) system. The employee was not paid benefits for week 18 of 2015, because it was his waiting week.(3) Each week thereafter, for weeks 19 through 44 of 2015, he was paid $370.00.
The employee began working as a custodian for the employer on October 27, 2015 (week 44). He earns $12 per hour. During week 44 of 2015, the employee worked 40 hours and earned $480.00. He stopped filing for unemployment insurance benefits after week 44 of 2015, because he was working full-time.
The employee speaks Spanish. His highest level of education is the sixth grade in Mexico. He is taking English as a Second Language classes here. When he initiated his claim for benefits in April 2015, he received a notice in Spanish from the department directing him to access and read its Handbook for Claimants. The employee did not access the handbook online, because he "is not that good at the internet." He did not ask the department to send him a printed copy.
The employee filed his claim for week 44 of 2015, the week ending October 31, on Sunday, November 1. He answered "No" when asked, "During the week, did you work or did you receive or will you receive sick pay, bonus pay or commission?"(4) The employee reported that he did not work in that week, even though he had worked 40 hours, because he was trying to collect for an earlier week in which he did not work but for which he was not paid benefits. The employee did not contact a claims specialist to ask about benefits that were "held back" or to ask what he needed to do to obtain those benefits if he were, in fact, entitled to them.
When contacted by the department about week 44 of 2015, the employee readily admitted that he worked 40 hours and earned $480.00 in that week. He did not dispute that he failed to report that work and those wages on his weekly claim certification. He denied that he intentionally concealed his work and wages.
The issues to be decided are whether the employee concealed work and wages from the department when filing his claim for unemployment benefits for week 44 of 2015; whether he received benefits to which he was not entitled and that he must repay; and whether concealment penalties and a future benefit reduction must be assessed.
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."(5) 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. ...
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.
... (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. An inference of concealment may not always be drawn from the simple fact that a claimant provided incorrect or inaccurate information to the department when filing a weekly benefit claim. Concealment will not be found, for example, where a claimant makes an honest mistake, misinterprets information received by the department, or misunderstands his or her obligations and benefit rights under the unemployment insurance law.(6)
There is no direct evidence of concealment in this case. Although the employee agreed that he worked and earned wages in week 44 of 2015, and he agreed that he failed to report that work and those wages on his weekly claim certification, he denied that he concealed that information from the department. He contended, rather, that there was a language barrier and he simply made a mistake. The commission is not persuaded.
The employee never claimed that he misunderstood or was confused by the questions that were asked of him on the weekly claim certification. Instead, he thought, erroneously, that he had one week of unemployment benefits on hold and that he had the right to collect those benefits. To obtain those benefits, the employee purposely reported that he did not work in week 44 of 2015, even though he had worked 40 hours in that week.
The employee's actions embody the statutory definition of concealment: he intentionally misled and defrauded the department by making a false statement or misrepresentation (that he did not work in week 44 of 2015). As a result of his actions, the employee received benefits for week 44 of 2015 for which he was not eligible and to which he was not entitled.
The employee did not rebut the inference of concealment through affirmative proof of good faith. He did not make an honest mistake in reporting that he did not work when he had. He did not misinterpret information received from the department or make a good faith effort to meet his responsibility to provide accurate information to the department. The employee was instructed in Spanish to access the Handbook for Claimants online or to request a printed copy, but he chose not to do so. Had the employee read the Handbook for Claimants, he would have learned that Wisconsin has a waiting week, which is the first week of an individual's benefit year for which the individual is otherwise eligible for regular benefits. Unemployment insurance benefits are not paid for the waiting week. So, while the employee may have misunderstood his benefit rights under the unemployment insurance law, it was because he never made the effort to learn why one week's benefits were "held back."
The commission therefore finds that, in week 44 of 2015, the employee worked and earned wages and concealed that work and those wages, within the meaning of Wis. Stat. § 108.04(11)(b) and (g), on his weekly benefit claims.
The commission further finds that, pursuant to Wis. Stat. § 108.05(3)(d),(7) the employee is not entitled to benefits for that week and was overpaid benefits in the amount of $370.00.
The commission further finds that the employee's failure to report work and wages on his weekly claim certification 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 false information provided by the employee. He must repay $370.00 to the Unemployment Reserve Fund.
The commission further finds that, pursuant to Wis. Stat. § 108.04(11)(bh), the employee must pay a concealment penalty of $148.00 ($370.00 x 40 percent).
The commission further finds that, pursuant to Wis. Stat. § 108.04(11)(be) and (bm), there is a $740.00 ($370.00 x 2 x 1 act of concealment) reduction in benefits and weeks that become payable during the six-year period ending December 4, 2021.
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 required to repay the amount of $370.00 to the Unemployment Reserve Fund and to pay a concealment overpayment penalty of 40 percent of that amount ($148.00). In addition, there is to be a reduction of $740.00 in benefits that might otherwise become payable to the employee during the six-year period ending December 4, 2021.
Dated and mailed March 11, 2016
atilajo_urr . doc : 152 : BR 330
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 adverse appeal tribunal decisions, particularly the reduction of $740.00 in benefits that become payable by December 4, 2021. The commission understands the employee to be asserting that the penalty is too punitive.
The commission agrees that the penalties for concealing work, wages, or other material facts from the department when filing claims for unemployment insurance benefits are very harsh. However, the legislature established the concealment penalties set forth in Wis. Stat. § 108.04(11), and the commission is required to apply the statute as it is written.
It has long been held that the completion of a certified claim requires a seriousness of purpose and knowledge and understanding of the information which the claimant is certifying. If a claimant takes responsibility for making such a claim and certifies that he knows that penalties are provided for providing false answers, then he should reasonably expect that penalties will be assessed for false answers. Payments are made by the department on the assumption that the answers given by claimants are true. The steep penalties for concealment reflect the legislature's intent to deter individuals from intentionally misleading or defrauding the department in order to obtain unemployment insurance benefits for which they are not eligible and to which they are not entitled.
ATTORNEY XAVIER SOLIS
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(1)( Back ) The appeal tribunal decision incorrectly indicated that the employer did not appear at the hearing. The employer appeared by Suzanna Castellanos, Human Resources Field Representative.
(2)( Back ) The employer was not a named party to Hearing No. 16000037MD, but a single hearing was held to address the issues involved in Hearing Nos. 16000036MD and 16000037MD.
(3)( Back ) Wis. Stat. § 108.04(3).
(4)( Back ) This question is commonly referred to as Question No. 4, because it is listed as such on the department's printout of answers given in response to questions asked on the weekly claim certification (DUCQ screen). See, e.g., Ex. 2.
(5)( Back ) Wis. Stat. § 108.04(11)(g).
(6)( Back ) See, e.g., Hollett v. Shaffer, supra; 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).
(7)( Back ) Wis. Stat. § 108.05(3)(d) provides that a claimant is ineligible to receive benefits for any week in which the claimant conceals wages or hours worked.