Council on Workers' Compensation
Meeting Minutes
GEF-1 Building
Madison, Wisconsin
March 14, 2017


The Department of Workforce Development provided public notice of this meeting under Wis. Stat.§19.84

Members present :  Ms. Bloomingdale , Mr. Buchen,  Mr. Dernbach(Chair),  Ms Frank, Mr. Fugina, Mr. Gunderson,  Ms. Johnson, Mr. Kent, Mr. Reader,   Mr. Schwanda, and Mr. Tindall 

Member Excused:      Mr. Redman, Ms. Seiler, and Ms. Thomas

Staff present: Mr. Aiello, Mr. Brockman, Ms. Brown, Mr. Dahlen, Mr. Evenson, Mr. Krueger,  Ms. McCormick, Mr. Moreth, and Mr. O'Malley

  1. Call to Order/Introductions:  Mr. Dernbach convened the Worker's Compensation Advisory Council(WCAC) meeting at approximately 10:05 a.m. in accordance with Wisconsin's open Meetings law. Mr. Dernbach called the role of members and introduced new WCAC member Nicole Frank of Dave Jones, Inc. Members of the audience and Worker's Compensation Division staff introduced themselves.

  2. Approval of minutes:.  A motion was made by Ms. Bloomingdale  to approve the minutes of the February 14, 2017 meeting . Mr. Reader seconded the motion.  The minutes  were unanimously approved without correction.

  3. Correspondence:  Mr. O'Malley stated two items of correspondence had been received since the last meeting. The first item was a letter dated March 8, 2017, from Attorneys Charlie Domer and Doug Feldman on behalf of Kids' Chance of Wisconsin. Attorney Domer appeared at the meeting to present the organization's proposal.
  4. The second item was an e-mail message dated March 13, 2017 from Attorney John Edmonson of Edmonson Law Office. Attorney Edmonson proposed amending s. DWD 80. 13 of the Wisconsin Administrative Code to allow the parties to worker's compensation cases the option to audiovisually record testimony at hearings. Currently the rule permits parties to record the audio of proceedings in an unobtrusive manner.

  5. State of Wisconsin Open Records Video:  Karl Dahlen, DWD Chief Legal Counsel, introduced a video created by the Department of Administration related to Wisconsin Public Records Law. Each agency is required to ensure all employees and members of all boards, councils, and commissions attached to the agency complete public records training on an annual basis. The five public record responsibilities of all employees are: 1. Recognize when you have a public record, 2. Understand what is not a public record, 3. Understand how to properly maintain public records, 4. Recognize a public records request and handle that request appropriately, and 5. Know where to go for help. Questions or issues that may arise in the future by WCAC members regarding records should be brought to Mr. Dernbach. Attorney Dahlen and Dawn Bluma, DWD Records Officer, are available to support Mr. Dernbach and the WCAC with compliance of the Public Records Law. Resources are also available on the Department of Justice's website.

  6. Kids Chance of Wisconsin: Attorney Charlie Domer explained that Kids' Chance of Wisconsin is a 501 (c) (3) non-profit organization, affiliated with the national organization Kids' Chance of America, created to provide educational opportunities and scholarships exclusively for the children of workers seriously injured or killed in workplace accidents. The organization's Board is comprised of 14 members from almost all areas of the worker's compensation community. Kids' Chance of Wisconsin was founded in 2012 and has increased scholarship awards over the years for attendance at colleges, universities, or technical colleges, preferably located in Wisconsin. In 2014, two scholarships totaling $6,000 were awarded; in 2015, five scholarships, $25,000 in total, were given; and in 2016, nine scholarships valued at $39,000 were awarded. To be eligible for a scholarship, the individual's parent has to suffer a workplace injury or fatality that seriously impacted the family's economic situation. Recipients may accept the award for up to four years but must renew their applications each year.
  7. Kids' Chance is seeking the Council's help to reach a broader audience and has proposed a statutory change similar to a provision that passed in the State of Washington. The first part of the proposal would allow a link on the Worker's Compensation Division (WCD)'s website for injured workers and their families to get information regarding Kids' Chance and the opportunities it offers. The second provision would allow for a discussion with the WCD to develop a process to disseminate information, such as pamphlets or brochures, to injured workers, the cost of which would be borne by Kids' Chance of Wisconsin.

    Mr. Dernbach added that last year Governor Walker proclaimed November 14 to18, 2016 as Kids' Chance Awareness Week.

  8. Other Business of the Council.: Mr. Dernbach turned the Council's attention to the packet regarding the state budget that was distributed. The information reflects Assembly Bill 64 (AB-64) as it was introduced and does not include any possible changes that could be put forth in the Governor's errata. Mr. Dernbach indicated that he would e-mail the WCAC members with a summary of changes in the Governor's errata, once it is issued, that affect the worker's compensation system.
  9. The first agenda item from the budget bill (AB-64) was the elimination of the Labor and Industry Review Commission (LIRC). The Governor recommends eliminating the Commission and adding a secondary review process for administrative law judge (ALJ) decisions to streamline appellate functions and decrease the time to decision for unemployment insurance, equal rights and worker's compensation cases. Instead of petitioning LIRC for review, a party will have 21 days to petition the Administrator of the Department of Hearings and Appeals (DHA) for a second-level review of an ALJ decision. This new review authority will have similar powers as LIRC currently does. However, instead of reversing, the DHA Administrator will only be able to remand a case. In addition, findings of fact will now be conclusive by the examiner (ALJ), in the absence of fraud. Appeals of the DHA Administrator's decision will go to Circuit Court, as they do now with LIRC. The Attorney General's Office will represent DHA Office of Worker's Compensation Hearings (OWCH) upon any appeal that goes to the courts, very similar to how it is currently with LIRC. The elimination of LIRC will save the Worker's Compensation Division (WCD) approximately $700,000 a year in segregated operating funds.

    Once the budget bill is signed, for the first 21 days after signing, a party will have a choice to pick either DHA or LIRC to submit their appeal. Following the 21-day period from the date when the budget bill is signed, all appeals will be to DHA. LIRC's funding will end January 1st, 2018, or six months after the publication of the budget bill, whichever is later. In addition, DHA will have the power to make emergency rules to determine the process for filing petitions for review. All property of LIRC, such as case decisions on their website, will become the property of DHA/DOA; none of the materials that LIRC has will be lost.

    Ms. Bloomingdale made several inquiries including asking the reason for this proposal, where the savings will actually be realized, how many employees LIRC has, and the number of reviews requested by each division. Mr. Dernbach advised the reason for the proposal is for fiscal savings and administrative efficiencies. The $700,000 savings estimate would be in segregated funds not taxpayer dollars; essentially the end-of-year assessment to the insurance carriers would be $700,000 less. LIRC has 26 employees. Last year LIRC reviewed 171 worker's comp cases, probably 1,700 to 1,800 unemployment cases, and approximately 100 cases from Equal Rights.

    Mr. Kent and Ms. Bloomingdale expressed concerns that eliminating LIRC removes an important check and balance in the worker's compensation system and that the proposal was not first presented to the WCAC. There was also concern that the increased workload on administrators could not be managed at current staffing levels. Mr. Kent feared potential bias since there would be no vetting by the Senate of the DHA Administrator and the same person who is reviewing decisions could also be the one promulgating emergency rules and making ALJ hiring decisions.

    Mr. Reader stated that with the proposal to eliminate LIRC the appeal process remains but the adjudicator would be different.  He voiced some drafting concerns that he hoped would be fixed in the errata letter, namely, that the DHA Administrator would be the final finder of fact and would have the power to reverse, not just remand, an ALJ decision. He also expressed some concern regarding a possible need for additional staff to handle the appeal process. Mr. Reader asked whether the DHA Administrator Brian Hayes currently handles appeals and if so, the approximate number and from which agencies they come.

    Mr. Dernbach advised that Mr. Hayes handles reviews under Chapter 227, Wis. Stats., for about 15 agencies including the Department of Corrections, the Department of Natural Resources, the Department of Health Services and, for DWD, reviews for the Division of Vocational Rehabilitation.

    In response to concerns that this proposal was not first brought to the WCAC, Mr. Reader suggested that since this proposal involved three divisions, two of which have councils, it would be difficult to coordinate separate agreed upon bills and implement a process to make such a broad change through the council process.

    Ms. Bloomingdale formally asked members of Management to sign on with members of Labor in a joint letter of concern to be sent to the Governor or the Legislature stating opposition to the elimination of LIRC until further review and study can be completed. Mr. Reader responded that Management would need to first have a discussion in caucus before answering.

    Mr. Reader requested that the WCD create a side-by-side comparison of the current appeal process with LIRC and the proposed process through the DHA Administrator. It was agreed that the WCD would wait until the errata comes out and would then provide an analysis of the current and proposed appeal processes.

    The second item related to the budget bill (AB-64) involves the transfer of 5.5 staff positions associated with adjudication functions from the WCD to DHA-OWCH. Three and a half of those positions and one attorney position are now performing work on cases after a hearing application is filed. These positions have already been performing work for OWCH so there are no concerns regarding the formal transfer at this time. The remaining 1.0 position, the Computations Technician, would be a new position transfer that would allow OWCH to compute benefit awards without the need to interact with the WCD.

    The third item related to the budget bill (AB-64) involves elimination of the requirement that stenographic court reporters record testimony at worker's compensation hearings and to add the option that testimony may be recorded by a recording machine instead. Mr. Dernbach indicated his understanding of the process would be that a digital audio file would be created at hearing via a recording device and then these files would be transcribed by someone from a stenographic pool on an as needed basis. This would allow for the elimination of 4.00 positions at DHA for a cost savings of segregated funds.

    Mr. Reader asked if this process was used for other departments or division for cases on appeal and raised a concern regarding the accuracy of the transcript without having the stenographer in the same room as the person giving testimony.Ms. Bloomingdale asked who would be making the decision if a stenographer or a recording device would be used at the time of the hearing. Mr. Dernbach advised that Unemployment Insurance hearings use a recording device to take testimony. Mr. Dernbach could not address the issue of accuracy; he deferred to DHA Administrator Hayes who will be asked to explain how the process would work. Another potential issue to be addressed is what would constitute the official hearing record.

    Mr. Kent wanted to know what led to the proposal to eliminate stenographic court reporters and discussed his previous experience/challenges with the use of a recording device and the difficulty in transcribing a recording when there is cross-debate and people talking over each other. Mr. Kent suggested a careful study of this proposal is needed and pointed out that both the applicants' and employers' attorneys' bars have raised potential problems with eliminating stenographic court reporters at WC hearings. Mr. Dernbach explained that all agencies had to submit a proposal with a five percent reduction in their official budget requests and this was how DHA determined it could meet this requirement.

    Ms. Bloomingdale asked Management to oppose this change until further study and discussion could take place and to send a joint letter with Labor stating this position to the Joint Finance Committee. Mr. Reader replied that a discussion in caucus would again be needed before Management could give an answer to this request.

    The fourth recommendation included in the budget bill (AB-64) would allow the transfer of 5.0 positions within DWD to the WCD to address the increase in workload and to maintain customer service levels. Health cost disputes have gone up 44% between 2011 and 2016 and two of the positions will be allocated to that unit so the WCD can meet the 90-day timeline to issue decisions as required by the administrative code. The other positions will be transferred, one each, to the Claims Monitoring Unit, the Dispute Resolution Unit, and the unit that deals with the Uninsured Employers Fund. The WCD did not ask for any increased spending authority for these positions.

    The fifth and final recommendation in AB-64 affecting the WCD would adjust the Work Injury Supplemental Benefit Fund (WISBF) spending authority to more closely reflect current payments from the fund. A few years ago the spending authority was increased to handle three years' worth of backlog. Since the backlog has been resolved, the WCD believes the additional $5,000,000 in spending authority is no longer needed. This is an accounting adjustment and does not substantively change the WISBF.

    Management and Labor will each collect and compile their questions about the proposals in the budget bill (AB-64) and send them via email to Mr. Dernbach.

    Mr. O'Malley presented an additional proposal from the WCD for the Council's consideration in the Agreed Upon bill. The proposal is to remove ambiguity in a provision of the law that deals with subjectivity, specifically what employers are subject to the Worker's Compensation Act. The current law in s. 102.04 (1) (b), Wis. Stat., states that employers who usually employ three or more employees are subject to the Act; if an employer who usually employs less than 3 people pays $500 or more in wages in any calendar quarter, the employer become subject on the 10th day of the month next succeeding that quarter. A recent Court of Appeals decision, Noyce v. Aggressive Metals, Inc., called into question the WCD's interpretation, based on the Stapleton v. Industrial Com. case that employment of three persons for a single moment is sufficient to make an employer immediately subject to the Act.  In Noyce, the employer claimed that its owners were the sole employees and the third individual was to only be employed for about a week so that the employer would not fall under the meaning of "usually" employing three or more employees. On appeal, LIRC agreed with the employer, overruling the ALJ who found the employer subject to the Act; the circuit court and Court of Appeals affirmed LIRC's finding. The result of this decision is that WCD staff charged with enforcing this section, which frequently involves claims against the Uninsured Employers Fund, no longer have a bright line rule and must interpret the word "usually." To remove ambiguity, the WCD is proposing the removal of the word "usually" from s. 102.04 (1) (b) 1. and 2., Wis. Stats.

  10. Adjournment:  A motion was made by Ms. Bloomingdale to adjourn the meeting and for the Labor and Management members to go into caucus. The motion was seconded by Mr. Reader. The motion passed unanimously. The meeting was adjourned at approximately 11:40 a.m.
  11. The next Worker's Compensation Advisory Council meeting will be held on Tuesday, May 9, 2017. The Council will not meet in April.