STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


In the matter of the Trade Readjustment Allowance of

GERALD L. CHEPIL, Claimant

Involving

TRADE ACT OF 1974, AS AMENDED

TRADE ACT DECISION
Hearing No. 97201062RL


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the claimant is ineligible for any further benefits under the federal Trade Act. The claimant is required to repay $2232.

Dated and mailed: November 19, 1997
chepilg.tsd : 110 : BR 330

/s/ Pamela I. Anderson, Chairman

/s/ David B. Falstad, Commissioner

MEMORANDUM OPINION

In his petition for review, the claimant states that he received an initial determination from Mary K. O'Brien that there was no evidence of intentional concealment and that the claimant had to repay an overpayment of $504, that a few days later he received an amendment to the initial determination which stated that he had intentionally concealed wages, and that when he called Mary K. O'Brien she said she was very surprised to see it and that it was not of her choosing. This is not correct.

The first initial determination, No. 970186605, was issued on June 18, 1997. It stated that he earned wages in certain weeks and the amount of the wages and the weeks involved; and it stated the effect on eligibility. It determined that an overpayment of $446 had resulted. While its principal purpose was to resolve the question of how the claimant's receipt of certain wages affected his eligibility for benefits, it did contain a statement that the claimant had concealed wages earned.

The second initial determination, No. 970188535, was issued two days later, on June 20, 1997. It was captioned "Amended Determination", and it began by stating that "[t]he decision dated 6/18/97 is hereby amended to show the correct overpayment amount". It then continued by reciting that the claimant had concealed work performed and wages earned during certain stated weeks, that as a result the claimant was ineligible for any further benefits from the week of issue onward. This resulted in an overpayment of $2,232. This initial determination was also issued by Mary K. O'Brien.

What these reflected was the fact that different issues were raised by the circumstances of this case and needed to be addressed separately.

Where there has been an intentional concealment of material facts by a claimant, this may have an effect on eligibility in two ways. First, there will be the question of whether eligibility exists given the newly-disclosed facts. Second, there may be an effect on eligibility arising from the concealment itself.

O'Brien's first initial determination addressed the question of claimant's eligibility simply given the fact that he had earned wages in certain weeks. Her second initial determination addressed the question of claimant's eligibility given the fact that he had (as she found) concealed work performed and wages earned.

Claimant appealed both of these determinations, but at the hearing he withdrew his appeal of the first initial determination because he conceded that the amounts he received were indeed wages rather than self-employment earnings. He pursued his appeal of the second initial determination, which had found that he had intentionally concealed work performed and wages earned and was therefore ineligible for any TRA benefits after the first week of that concealment (and which determined the amount of overpaid benefits and the fact that he was obliged to repay that amount). The Administrative Law Judge found against him on this appeal, and this is the decision he has now appealed to the commission.

The commission affirms the decision of the Administrative Law Judge because it agrees with her implicit finding, that the claimant's assertion that he did not intentionally conceal the fact that he was earning wages was not credible. The claimant was not naive in business and self-employment matters. He had been a Sales Manager. He had also had previous experience with self-employment. He knew that in employment, various payroll deductions including those for state and federal income taxes and social security were made. He knew that such deductions were not made in payments made under contracts with self-employed contractors, and that in such cases a form 1099 was sent. He also knew that payroll tax deductions were being made from the sums he was being paid by the Post Office for his services. He also knew that in self-employment situations one does not fill out a W-4 (declaration of deductions for withholding) form, yet he was sure that he had filled one out for the Post Office. It is simply not credible, that he genuinely believed in good faith that he was performing his services for the Post Office as a self-employed independent contractor.

Under the Trade Act, if a claimant knowingly fails to disclose a material fact, and as a result of such nondisclosure the claimant receives any payments to which he was not entitled, the claimant is ineligible for any further payments under the Act. 19 U.S.C. 2315, "Fraud and recovery of overpayments". Because the claimant knowingly failed to disclose that he was performing work for and earning wages from the Post Office, and because as a result of this nondisclosure he received benefits in week 3 of 1997 to which he was not entitled, he became ineligible for any further benefits in any further weeks. Because he was not eligible for the benefits that were paid to him in following weeks until the nondisclosure was discovered, he must repay those benefits. The decision of the Administrative Law Judge is therefore affirmed.


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