Wisconsin Manufacturers and Commerce Building
501 E. Washington Ave.
Management: James Buchen, Earl Gustafson, Bob Oyler, Daniel Petersen and Ed Lump
Labor: Phillip Neuenfeldt, Dennis Penkalski, Michael Bolton, Red Platz, and Robert Lyons
Chair: Greg Frigo
Department staff present: Hal Bergan, Greg Frigo, Bob Whitaker, Andrea Reid, Lutfi Shahrani, Carla Breber, Gretchen Mrozinski, Carol Tertadian, Dick Tillema, Brian Bradley, Tom Smith and Terese Wojick
Others present: John Metcalf, Tom Devine, Larry Smith and Bob Anderson
Minutes from February 18, 2005 UIAC meeting were approved. Meeting Adjourned.
Carol Tertadian presented a handout titled, “2004 UI Advisory Council Annual Fraud Report.” Carol reviewed the handout. The biggest fraud issue is when claimants work and earn wages while they are claiming and do not report the work or wages. When the number of claims are high, then the number of fraud cases rise. The D.A.’s do not always like prosecuting UI fraud cases.
Ed Lump would like the department to prepare a handout on fraud and collusion to distribute to his members. This handout could help educate, inform and advise employer’s that they are hurting their UI accounts and the fund’s balancing account by acts of fraud or collusion.
Hal Bergan will have Ed Pyykonen (audit staff member) speak to the Council about employer fraud. Andrea Reid advised that the return on bankruptcies are low as there is much manual labor involved for little return. Collection activity usually starts about 120 days after the payment is late.
Tom Smith stated that with benefits, fraud overpayments are not dischargeable in bankruptcy, but the typical benefit overpayment is dischargeable. Anonymous fraud reports are accepted, but fraud is difficult to prove without the complaining party willing to identify themselves.
Hal Bergan mentioned that we are still working on the issue of overpayments as a result of employers/agents failing to respond to requests for information. There is a potential for national action regarding this issue. Any action will likely not affect PEOs for benefit purposes.
Carla Breber presented D05-27 involving treating claimants with partial weeks of absence equally. Currently, if a claimant misses a partial week of work and is on a 1B1 suspension or FMLA, benefits are denied for the entire week. But, if a claimant is on a definite leave of absence for a partial week, then benefits may be payable.
A handout was prepared and distributed detailing this proposal. Management did not see the logic in this proposal. Some Council members were confused. Greg Frigo, Lutfi Shahrani and Carla Breber attempted to explain the inequities in the current system and how the proposal will reduce work and treat similar situated claimants equally. Dick Tillema explained that if this proposal was passed, the fiscal significance would be less than $50, 000 in benefits paid. Labor stated that it probably cost more to debate this proposal than to pass it. This issue will remain on hold for now and will be taken up at a later Council meeting.
Brian Bradley presented D05-35 involving assessing non-profits for bad debt. A handout was prepared and handed out at the last meeting. Currently there are about 850 nonprofits that elect reimbursement financing. We require the nonprofits to file a security. However, when and if a larger nonprofit goes out of business, the security does not always cover all of the bad debt. If this happens, the fund’s balancing account covers the payments/debt.
The proposal would assess all of the nonprofits or just the larger ones for the bad debt instead of taking money from the balancing account. James Buchen commented that this would be similar to the Worker’s Compensation self-insured’s fund.
Brian stated that we would only assess when needed. The largest assessment would be around $65,000 and would apply to the largest nonprofit with about $315 million in annual payroll. Government entities would not be affected by this proposal. Brian stated that even if we raised the security requirement, it would still not cover the bad debt associated with the largest nonprofits going out of business.
The Council would like a list of the nonprofits affected by this proposal as well as the number of employees/amount of payroll for the nonprofits. This will be included as a topic at the next Council meeting.
LUNCH (12:00 P.M.) Meeting resumed at 12:35 p.m.
Bob Anderson provided a handout concerning the D05-41 Levy change proposal. Bob’s handout stated that the $5 per levy would be excessive when compared to earnings garnishment actions. Andrea Reid will look at the handout and explore Bob’s suggestions.
Since several people need to leave soon, future UIAC meetings were scheduled: April 28th at AFCSME and June 2nd. Both sides will present their law change proposals at the April 28th meeting.
Tom Smith presented D05-49 involving SUTA Dumping Prevention. It was explained that this proposal was a federal requirement. The department is currently litigating 19 cases where LIRC failed to follow federal policy and law concerning eligibility requirements.
There is a contract between the U.S. DOL and Wisconsin which requires Wisconsin to follow federal law, guidelines, policy and/or interpretation. It is the department’s interpretation that LIRC violated this contract. The litigation involves statutory construction.
The department’s arguments will be: this is a case of first impression and LIRC’s interpretation should be given no weight and, Wisconsin and LIRC are bound by the contract terms as LIRC is part of the Wisconsin’s executive branch. If the U.S. DOL determines we are out of conformance, this could cost Wisconsin around $65 million—partial loss of the offset credit against the FUTA credit. If we lose in Court, the DOL may start conformity proceedings. BOLA will be speaking with the feds soon about this litigation.
Gretchen Mrozinski presented O05-1, the Americorps exclusion from employment. The proposal was handed out in final form. The Council approved it at an earlier meeting.
A motion for a closed caucus was made and passed.
Before going into closed caucus, a letter to the Council was addressed from a constituent in Manitowoc who is attending the UW and would like to know why her schooling is not considered approved training. The Council agreed that the letter contained valid points, but decided not to act on the letter.
Members of Council went into closed caucus.