8033 Excelsior Drive
Management: James Buchen, Earl Gustafson, Daniel Petersen, Ed Lump and Robert Oyler
Labor: Dennis Penkalski, Red Platz and Robert Lyons
Chair: Greg Frigo
Department staff present: Hal Bergan, Bob Whitaker, Tom Smith, Gretchen Mrozinski, Carol Laudenbach, Dick Tillema, Terese Wojick, Carla Breber, Elaine Pridgen, Andrea Reid, Terry Ludeman, and Brian Bradley
Others present: Mike Michaelson of Rep. Nass’ office, John Metcalf of WMC and Larry Smith of UC Management
Meeting began with Frigo announcing that he will be transferring to Appleton and working as an ALJ sometime in the near future. Laudenbach is retiring. Mrozinski (an ALJ from the Madison Hearing Office) is working in BOLA temporarily to help with research work
The August 17, 2004 minutes are approved with the correction noted on page 5. The September 16, 2004 minutes are approved.
Elaine Pridgen gave presentation on Basic Rule Making Procedures after 2003 Wisconsin Acts 118 and 145. Pridgen provided a handout and her presentation was true to the handout. The latest changes to rule making are the requirement that the new rule include comparisons to federal regulations and that the new rule include description of all entities affected. Pridgen also noted that when a proposed rule may have a significant economic impact on small businesses, then that proposed rule must be submitted to the Small Business Regulatory Board. Buchen noted that the intention was to be an extensive analysis on the effect the proposed rule would have on the economy. Pridgen would be interested in hearing comments concerning Wis. Stat. § 895.59 and what should be in a proposed rule relative to this section. Frigo noted that if the statutes call for a penalty, then we follow the statutes. The new rule making requirements will lengthen the rule making process.
Bergan discussed the Reed Act Funding issues. The current budget proposal asks for Reed Act funds for the Apprenticeship program, UI administrative purposes and reemployment services. Bergan explained that the Apprenticeship program for the current cycle involves a small increase of Reed Act funds as compared to last year. Bergan stated that federal funds for UI have been reduced, so Reed Act funds are needed for administrative costs. Department is working hard to determine why we are losing federal UI funds and to hopefully stop this loss in the future. Department needs to identify performance issues because federal funds are based on performance. Bergan stated that Reed Act funds will be used for reemployment services because we need to tighten connection between UI claimants and job services people. When UI claimants are re-employed, then it is a positive outcome for UI program. The feds are telling us to pay more attention to this area because this is one of the criteria on how they judge our UI program. We have a pilot program in Milwaukee and Oshkosh right now and we are looking at a program in Georgia concerning reemployment services. The Georgia program involves a UI claimant being available to train with a private employer while still receiving UI benefits, but does not receive wages from the private employer. To do this in Wisconsin would require a statute change under approved training. Bergan is aware that there is concern that the use of Reed Act funds will adversely affect the amount in the trust fund. But, if the program works, it would help the trust funds because UI claimants would be back at work sooner. The Department wishes to take an aggressive posture with reemployment services. Currently, there is $158 million in the trust fund.
Buchen stated that the basic problem with this is that we are spending more out of the Trust fund than what we are putting back. If we didn’t have Reed Act funds, we would have to raise employer UI taxes. Buchen stressed that the Apprenticeship program has been around forever and was paid for by other sources, so why fund it with Reed Act funds now? Buchen stated that this would set a terrible precedent. Buchen understands that UI administrative services are part of UI and we have to pay for such services so Reed Act funds for these services are not as problematic. Buchen stated that reemployment services is a good idea, but he is unsure how much Reed Act money to put into it. Penkalski responds that the Apprenticeship program is a good investment in keeping people off of UI. Buchen responded that there are 100’s of training programs funded by DWD and what is to stop Reed Act funds from paying for these? Buchen stated that we need to say that Reed Act funds are for UI and we need to use such funds to pay for UI benefits—nothing else.
Bergan stated that there is $5 million in the proposed budget coming from Reed Act funds. Buchen stated that there may be $5 million this time, but what about next time?—we will end up raising solvency taxes. Buchen stated that for years, taxes have not covered benefits and only because of the interest in the fund have we met benefit payments. Tillema stated that in 2003, the Department took in $500 million in taxes, $600 million in taxes in 2004 and expects $686 million in 2005. Buchen stated that of the collected taxes, this only covered 50% of paid out benefits. Bergan responded that he is working on funding such as trying to reduce overpayments and this, with the programs at issue, may help balance out the taxes paid and benefits paid. Frigo reminded everyone that Reed Act funds can be used for broad, UI purposes and federal law prohibits Reed Act funds for being used to pay for actual training. Laudenbach stated that the Milwaukee and Oshkosh pilot sites are working with employment plans—they provide referrals, match the UI claimant with job openings. Such pilots began in July with Oshkosh and in September with Milwaukee. Laudenbach stated that no hard data has been collected yet with regard to the pilot programs. Laudenbach will try to have preliminary data on these pilot programs for the next council meeting.
Lump stated that he told his employers/small businesses about tax increases and it was not well received. Lump stated that it becomes difficult to then tell them that taxes could increase again because of spending Reed Act funds—“We continue to leak.” Yes, the programs are potentially worthwhile, but this is a hard sell to employers. Buchen stated that the Department did not consult with the council on the use of Reed Act funds and he wants to encourage the Governor to find a different source of funding for the Apprenticeship program. Buchen made a motion in this regard. Penkalski disagreed with motion. Oyler seconded the motion. Platz stated that he would be more comfortable if he spoke with the labor members regarding this motion before dealing with the motion. Buchen, fine, but wants motion mentioned in meeting minutes. Frigo said that motion will be tabled at this point, but will be dealt with at next meeting.
Bergan stated that although it is not on agenda, we are looking at another round of staff reductions. Worse case scenario is a 10% reduction through the biennium.
Issues juggled a bit and next topic is “Temporary Help Issue.” Frigo sated that the Department policy has been that when an assignment ends and the employment agency advised the claimant that a new job will begin within 7 days of the last assignment, that the employment relationship continues. The employee can claim benefits, but if he/she walks away, then the employee has quit. The employer can extend the “new assignment” for 7 more days—giving the employer 14 days total to find/begin the employee on a new assignment. LIRC and ALJs are not following this policy. LIRC wants the policy made into a rule before it will follow it. Senator Reynolds wrote a letter stating that he is concerned that the Department is applying different standards concerning this policy—he wants the policy made into a rule. Bergan did not respond to letter yet because wanted to talk to the council about this issue. Buchen stated that an administrative rule can proceed anytime and we do not have to wait for the bill. Frigo and Laudenbach note that you cannot apply Labor Standards to subsequent temporary help assignments—only the first. Buchen stated that he had proposed this rule as part of the last package, but labor nixed it. Labor stated that they would vote against it again. Lump stated that we need to deal with this issue because we get a lot of temporary help agencies at our hearings and these employers fill a niche. Penkalski stated that temporary help agencies are one-sided and the employers own the employees. Buchen suggested that we need a small group to work on this issue—the council as a whole is not dealing with this issue very well. Bergan said good idea and he will be part of the small group. Buchen will be involved also. Bergan will solicit a volunteer from labor and will contact LIRC. Buchen left for the day.
Labor Standards. Breber explained how and why we use Labor Market information. See handout (which Breber followed closely). Oyler commented that the term “similar” can cause some problems, namely that it may be defined too broadly. Oyler suggested that the LIRC decision defining “similar” should be revisited. Ludeman responded that when “similar” was first defined, it was even broader than what is used today and that the LIRC decision said that the Department’s definition of “similar” was too broad. Now, “similar” is defined as the very specific occupational title of the job involved. “Similar” is not the same as “suitable.” “Suitable” is much broader and encompasses a multitude of jobs that the claimant could perform. “Similar” is the specific job title. The problem with “similar” is that the COED looks at all of the wages for the job at issue. Example: an electrical engineer could earn anywhere from $20 per hour to $67 per hour. The array of wages paid to an electrical engineer are all used to determine what wage is substantially less favorable—from the $20 all the way to the $67 per hour. Lump would like some sort of summary of what are all of the job titles and corresponding wages that are used in the COED. Ludeman explained that the COED goes by job titles—not what the job duties are. The COED also looks at what the training level is for a specific job and does not go below it. Ludeman stated that the council should give him specific job titles and then he can provide the corresponding wage information. Ludeman goes on to state that with “similar” the COED does look at specific geographic areas that encompass 6-7 counties when determining corresponding wages. Therefore, some geographic areas have higher wages than others. Some markets have very broad wage ranges for specific jobs. Breber stated that the adjudicators are trained to ask what the job duties are before determining the correct job title. Gustafson stated that he would like some examples of what constitutes unskilled labor. Ludeman replied that the Department follows the D.O.L. standards such as how long it takes for a worker to learn his or her job (0-30 days, 30-90 days, etc.). Ludeman stated that when COED was developed, he had 23 people in his office and now he has 8. Ludeman does not know how we can deal with a change to the COED system with only 8 people in his office. Frigo stated that for the next council meeting, we will have a live COED presentation on a PC, with Ludeman presenting. Breber stated that transportation to work is not a labor standard. Labor Standards are normally conditions imposed by the employer. The distance from the employee’s residence to the job site however, may qualify as “good cause” for quitting or refusing the work.
Letters by Smith. First letter from Duane Schulze involving the reduction of benefits while working part-time. Lump stated that the Department’s response to Schulze’s letter did not give enough information on the current system of reducing benefits when wages are earned. Frigo will look into Schulze’s claim and do more investigating. Griggs' letter involved non-charge of small business owners for UI taxes. Council elects not to pursue this letter. Engel's letter involved benefit fraud. Smith explained that DA’s do not want to prosecute benefit fraud. Council elects not to pursue this letter. Morgenson's letter involved “free rent” being counted as wages. For UI purposes, rent at issue not wages. Council elects not to purse this letter. Amercorps' letters—Smith stated that federal law specifically states that Americorps' participants are not federal employees. LIRC ruled that there was no requirement that same non-employee treatment be given at state level. Some states exclude and others include the participants as employees. The participants are receiving a stipend. Frigo stated that Tom Devine will be at the next council meeting and we can go into more detail about the Americorps issue at the next meeting. Gajeski's letter involved an employee with a non work-related injury who is receiving benefits but who cannot work for the employer due to restrictions or lack of work—employer would like benefits charged to general fund. Buchen is interested in this letter/subject. Haase's letter involving an LLC who did not elect voluntary coverage. If LLC had elected to be treated as corporation for federal tax purposes, claimant would have received 4 weeks of benefits. In this case, claimant wanted 26 weeks. Council elected not to pursue letter.