Department of Workforce Development

Unemployment Insurance Advisory Council
Meeting
Wednesday, December 17, 2002, 1:00 p.m.
Quality Inn South
4916 E. Broadway
Madison, Wisconsin

MEMBERS PRESENT:

Management: Robert Oyler, Earl Gustafson, James Buchen, Daniel Petersen, Ed Lump
Labor: Red Platz, Dennis Penkalski, Robert Lyons, Michael Bolton
Chair: Greg Frigo

Department staff present: Bruce Hagen, Al Jaloviar, Richard Tillema, Carol Laudenbach, Mary Anderson, Carla Breber, Len Wroblewski, Michelle Kho, Frances Healy, Tim Haering

Others present: WCCF’s Bob Anderson, WMC’s John Metcalf, NFIB’s Bill Smith, Les Wakefield of Sen. Reynold’s office, Mike Mikalsen of Rep. Nass’ office

1:00 p.m. – Frigo called the meeting to order, introduced new Council member Ed Lump, commented on plans for the Al Peck luncheon and commemorative plaque, working toward having the luncheon at a future Council meeting.

Frigo highlighted the public hearing comments. Gustafson appreciated the topical format rather than geographic organization. Frigo offered more detailed public hearing comments upon request.

Laudenbach gave a UI caseload update, noted its increase at a decreasing rate shows progress, commented on adjudication, human resource allocation to manage the caseload.

Laudenbach detailed TEUC caseload statistics, noted the December 31, 2002, expiration date is coming as the Bush administration expressed strong interest in renewing TEUC, which US DOL expects Congress to pass, in some form or another, in January.

Laudenbach said Benefits is remaining flexible, ready to implement whatever sort of TEUC extension is passed.

Laudenbach noted WSB, while not likely to trigger, based on current trends, is at greatest chance of triggering ON in late February. She also noted WSB is paid from employer accounts, while TEUC is federally funded.

Laudenbach highlighted benefit exhaustion statistics. Jaloviar asked how many TEUC beneficiaries exhausted benefits before finding work, requested that statistic for next Council meeting. Laudenbach said it was possible, commented on data extraction strategies.

Frigo noted the governor’s power to suspend WSB by Executive Order if TEUC is ON, added the suspension has a 4-week waiting period, during which both programs would run and state benefits must be paid first. Several commented on the possibility of needing a pre-emptive EO to prevent WSB from starting.

Laudenbach, Hagen, Frigo discussed hypotheticals, Congressional scenarios. Laudenbach noted WSB software has not run in 10 years, has not been Y2K tested, needs to be tested to see if it still works.

Buchen, Frigo, Petersen, Jaloviar, Laudenbach discuss strategies for getting a pre-emptive EO. Buchen, Jaloviar, Laudenbach discuss caseload increases and the WSB threshold.

Hagen briefly reviewed the federal UI-ES reform bill, not a top Bush priority. Frigo asked whether the Council was now prepared to send a letter stating their position on the bill. Buchen needed more time to survey his constituents.

Oyler moved, Penkalski seconded approval of the November 7, 2002, Council meeting minutes. Frigo, without objection, declared them approved.

Frigo highlighted the $50 exemption for non-profits reimbursing volunteers’ expenses, explained the process of acting on the proposed rule. Buchen commented on the other de minimus exemptions, suggested approving the rule to fix the anomalous problems.

Penkalski, Buchen discussed looking into potential abuses of the "per event" standard in the rule, suggested further defining the exemption. Lump, Petersen commented. Frigo, Hagen noted previously concerned non-profits and lawmakers did not comment on the proposed rule. Jaloviar, Frigo, Anderson commented on potential fixes to the rule. Penkalski suggested tightening the definition.

Buchen moved, Penkalski seconded moving the rule to a formal public hearing. Oyler, Gustafson, Buchen, Petersen, Lump, Platz, and Penkalski approved the motion. Frigo said suggested revisions will be made, the rule will return before the Council after a hearing.

Tillema commented on the financial report, compared Thanksgiving week claims year over year, used 1Q02 to project 1Q03 outlook, suggested unemployment has stabilized.

Tillema commented further on the DOA-DOR economic forecast, discussed 3 scenarios to be included in the Council report, commented on 3 reasons for GDP growth, noted economic growth may not translate immediately into lower unemployment.

Frigo, Tillema, Buchen commented on government spending. Buchen said state and local government spending will increase, despite projected state budget deficit. Penkalski noted fewer military bases meant smaller federal spending in the state.

Tillema commented on technical factors in economic forecasting and the reliability of the state report. Buchen noted 2001 UI forecasts were based on overly pessimistic state forecasts. Frigo, Buchen, Laudenbach, Tillema, Jaloviar comment on earlier UI forecasts and how they panned out.

Hagen noted the timeline for Council review and approval of the UI financial report to meet the Jan 15 deadline. Buchen commented on the report’s historical value. Gustafson asked about some financial details.

Frigo highlighted the Council report draft, noted Council members have time to suggest changes. Buchen suggested a paragraph or so on lawmaker’s proposals that were ultimately adopted by the Council. Frigo noted Sen. Jauch’s pressure for TSB. Hagen, Jaloviar mentioned some other lawmaker initiatives. Frigo promised to review the report with an eye to highlighting lawmakers’ proposals.

Breber highlighted the written DWD 129 code reform proposal. Tillema questioned some wording, Breber agreed it should be corrected. Frigo asked about putting the draft into the formal rule process. Buchen suggested further study.

Frigo commented on the 2-work search rule, which expires this year, asked if the Council preferred to renew it or change. Buchen asked about progress on the rules approved in the 2002 UIAC bill, noted 4 rules were pending. Frigo commented on the status of pending rules.

Penkalski, Frigo, Buchen discussed the efficacy of the 2-work search rule. Laudenbach said evidence is inconclusive on whether 2 searches yields more jobs. Breber noted some UI forms are awaiting a decision on the work search rule. Penkalski suggested holding the rule for the next meeting.

Oyler asked about, Laudenbach commented on the work search verification process. Oyler asked whether the work search self-reports are truthful. Jaloviar noted quality control statistic showed 10% of claimants said they made a valid search but did not.

Frigo commented on work search waivers, noted the possibility of triggering a 2-work search requirement for claimants without a recall date. Buchen asked about, Hagen commented on other states’ practices in work search verification, noted the high caseload has prevented UI from initiating random work search audits.

Buchen commented on potential abuses of work searches. Lump added employer’s perspective on work search exemptions. Frigo, Jaloviar, Laudenbach comment on work search requirements, separation versus termination, work search exemptions with recall dates.

Buchen, Frigo, Laudenbach, Breber, comment on the practical effect of letting the 2-work search rule lapse to 1. Frigo said the rule could be carried over to the next meeting.

Gustafson commented on the problems arising from customizing work search rules. Hagen suggested profiling claimants in creating work search thresholds. Jaloviar suggested more strict work search requirements for claimants truly terminated from their jobs.

Buchen noted the subjectivity of profiling claimants for work searches. Laudenbach, Gustafson commented. Buchen worried may become easier to apply for UI benefits than to apply for another job. Laudenbach clarified that non-compliance with a weekly work search requirement disqualified a claimant only in the non-compliant week.

Frigo commented on the Bush administration revoking the Clinton Executive Order allowing states to use UI funds to pay for new parents’ leaves of absence, aka "Baby UI." Hagen noted no state ever exercised that power. Jaloviar noted the new California parental leave plan is funded by employee tax withholding.

Frigo asked if the Council would like to take any action on the proposed DOR-DWD data collection plan. Buchen said his constituents needed more time. Oyler asked about DWD’s stance. Hagen noted the plan has been in the works since 1997 and will ultimately benefit all parties. Oyler was wary about the effect on small employers. Petersen was also concerned about the effect on low-tech employers.

Anderson, Laudenbach commented on UI’s electronic filing requirements, current level of paper filers, the demographics of employers who file only with DOR but not currently with DWD, noted joint reporting would create a new DWD work burden.

Lump, Oyler, Jaloviar, Anderson, Laudenbach discussed who would answer employers’ questions about filing new forms. Laudenbach commented on documenting cost-allocation to prevent finger-pointing over the use of funds.

Oyler, Buchen noted DOR benefits most from joint reporting. Anderson, Laudenbach agreed. Hagen suggested some detailed interviews with employers to understand the direct effect of joint reporting.

Oyler, Peterson commented on the added burden to manual filers. Oyler, Buchen noted joint filing creates an added burden for all employers, even e-filers. Hagen, Oyler discussed meeting with employers to hear their concerns.

Buchen, Anderson discussed DOR’s implementation timeline. Oyler asked about the implications of Council refusal to approve the plan. Frigo said joint reporting is likely moribund without Council approval. Buchen said the plan faces an uphill battle. Anderson said if the Council is leaning toward rejection, that message should be conveyed ASAP to DOR.

Penkalski asked about the fiscal effect. Hagen noted not everyone wins, said fiscal effect is largely unknown. Anderson noted some DOR cost savings. Laudenbach said cost calculations are in progress. Jaloviar said DWD will pay more to process to forms but will charge-back the largely unknown costs to DOR, noted DOR lacks the computers and funding to unilaterally implement the plan.

Hagen noted joint reporting would appear to employers like DWD is tripling its reporting requirements. Penkalski noted that joint reporting meant only one agency would audit employers, not 2. Hagen agreed.

Frigo asked, Lump and Smith [of NFIB] agreed to work with agencies on employers concerns about joint reporting.

Wroblewski commented on UI for returning military reservists, with respect to the military wages being lower than their private sector wages, concluded that most returning reservists’ military wages are higher than their private sector pay.

Jaloviar, Wroblewski discussed the maximum benefit rate, reached for reservists ranking e-5 and above. Penkalski noted time on-duty could affect benefit year calculations and reduce benefits. Hagen, Frigo commented on ways to supplement such reduced benefits. Hagen suggested further study. Frigo promised a return to the topic in Summer 2003.

Jaloviar clarified that the issue is limited to reservists who were called to active duty, then return and are laid off. Platz noted that a 3 or 4 year tour at a lower rank could disadvantage some returning reservists. Buchen noted that reservists quitting jobs to go on active military duty is not the same as those being called up. Platz noted some labor contracts cover reservists who re-enlist after their reserve tour of duty.

Kho commented on letters to the Council re: exemptions for "casino night" workers and Rep. Lehman/Cedarburg proposal to refuse benefits for anyone under a misconduct investigation and require repayment of erroneously paid benefits.

Buchen suggested a letter noted the "casino night" fix would complicate other areas of the law. Frigo noted non-profits that push suspected thieves to resign inadvertently open themselves up to paying UI benefits.

Petersen, Oyler, Lump, Frigo, Jaloviar, Platz discuss potential complications caused by exempting "casino night" workers.

Frigo scheduled the next Council meeting for Jan. 7, 2003, 10 am., noted the Peck tribute luncheon was a possibility, carried over the remaining agenda items and adjourned.

END OF MEETING