Various changes in the unemployment insurance law, providing a penalty, and making appropriations

Benefit changes Concealment and program integrity Currently, if a claimant conceals any material fact relating to his or her eligibility for benefits or conceals any wages earned in or paid or payable for a given week, the claimant is subject to graduated monetary penalties that increase in severity with the number of determinations of concealment by the claimant. In addition, if a claimant conceals any wages for a given week, the claimant is ineligible to receive any benefits for that week.

This bill provides instead that a claimant who conceals any material fact relating to his or her eligibility for benefits or conceals any wages is subject to a graduated forfeiture of benefit amounts equivalent to specified weeks of benefit eligibility that increases in severity with the number of determinations of concealment by the claimant. In addition, a claimant who is found guilty of concealment is subject to a penalty equal to 15 percent of the benefit payments paid to the claimant.

The bill also creates a segregated fund called the unemployment program integrity fund for deposit of all penalties collected under the above described penalty provision created by the bill. Under the bill, moneys in the fund are to be used for the payment of costs associated with program integrity (fraud detection and prevention) activities.

Partial unemployment Currently, with certain exceptions, if an employee earns wages or certain other amounts treated as wages in a given week, the first $30 of the wages or other amounts are disregarded and the claimant's weekly benefit payment is reduced by 67 percent of the remaining amount earned, but no employee is eligible to receive benefits for any week if the benefits would be less than $5, and any wages that the employee would have earned in any week for work performed for his or her employer had the claimant accepted available work from that employer are treated as wages earned for that week.

This bill provides that an employee is ineligible to receive any benefits for a week if the employee receives from one or more employers 1) wages earned for work performed in that week of more than $500; or 2) sick pay, holiday pay, vacation pay, or termination pay which, by itself or in combination with wages earned for work performed in that week, is equivalent to more than $500.

Eligibility of claimants who engage in full-time work Currently, if a claimant receives wages or certain other amounts treated as wages from an employer who paid at least 80 percent of the claimant's wages in his or her base period (period preceding a claim during which benefit rights accrue) for any week, the claimant is not eligible to receive benefits for that week if the claimant works for at least 32 hours for that employer in that week and receives pay at not less than the rate of pay that the claimant received during the calendar quarter in his or her base period in which the claimant received his or her highest wages, or the claimant receives certain other payments from that employer for that week that alone or in combination with any paid wages equal at least the pay the claimant would have received for 32 hours per week.

This bill substitutes a rule which provides that a claimant is ineligible to receive any benefits for a week in which one or more of the following applies to the claimant for 32 or more hours in that week: 1) The claimant performs work; 2) The claimant receives certain amounts treated as wages for that week; or 3) The claimant receives holiday pay, vacation pay, termination pay, or sick pay that is treated as wages under current law.

Failure or refusal to take a test for illegal drugs Currently, unless federal law otherwise provides, with certain exceptions, if an employee fails, without good cause, to accept suitable work when offered, the employee is ineligible to receive benefits until four weeks have elapsed since the end of the week in which the failure occurs and the employee earns wages, or certain other amounts treated as wages, equal to at least four times the employee's weekly benefit rate in employment covered by the unemployment insurance law of any state or the federal government. An employee's failure to accept an offer of work includes either a) the employee's refusal without good cause to take a test for illegal drugs conducted in a manner approved by the Department of Workforce Development (DWD) that is given on behalf of the employer as a condition of employment; or b) the employer's withdrawal of or failure to extend an offer of work due to a positive test result on such a test.

This bill deletes an employee's refusal to take a test for illegal drugs or a withdrawal or failure to extend an offer of employment due to a positive test result as an element of failure to accept suitable work.

Ineligibility for failure to perform work searches Currently, a claimant must conduct a reasonable search for suitable work during each week that the claimant receives benefits unless DWD waives the work search requirement by general rule under stated conditions. This bill provides that a claimant is ineligible to receive benefits for any week for which there is a determination that the claimant failed to conduct a reasonable search for suitable work and DWD has not waived the work search requirement. If benefits have been paid to a claimant for such a week, the bill permits DWD to recover the benefits in the same manner as other overpayments are recovered.

Tax changes Contribution liability of successor employers Currently, when a business is transferred from one employer to another employer, DWD must treat the transferee as the successor employer to the transferor if the the transferee and the transferor are owned, controlled, or managed by the same interests. DWD redetermines the contribution (tax) rate of a successor employer as of the first quarter beginning after the effective date of the transfer. This bill provides instead that DWD shall redetermine the contribution rate of a successor employer as of the beginning of the first calendar year beginning after the effective date of the transfer.

Other changes Determining who is the employer of certain employees Currently, when an employee has some relationship with more than one employer in the course of performing a job, DWD must determines which employer is considered to be the employee's employer for purposes of the UI law. Except in certain limited circumstances, current statutes do not address the issue of how employment status and employer responsibility for a particular employee is determined. This bill provides that, except with respect to providers of home health care and personal care services for medical assistance recipients, DWD must consider nine factors concerning an employer's relationship to an employee and three other factors concerning the beneficiary of an employee's services, maintenance of a staff of employees to perform the employee's services, and responsibility for employee compliance with regulatory laws in determining who is the employer of a particular employee. The bill also provides that notwithstanding these factors, a provider of home health care and personal care services for medical assistance recipients may elect to be the employer of employees providing those services, if the provider notifies in writing the recipient of the services of its election and the provider is treated by the federal Internal Revenue Service as an employer for purposes of compliance with federal unemployment tax laws.

Treatment of interest assessments and assessment-related revenue Currently, when there are insufficient moneys in the unemployment reserve fund to make full payment of benefit claims, DWD is authorized to borrow moneys from the federal government sufficient to make full payment of claims. DWD then levies an annual assessment against employers that engage employees in employment covered by the UI law sufficient to pay the interest due on the federal advances to the fund. Any interest earned on the assessments pending transfer to the federal government is credited to the state general fund, and any amount remaining after an interest payment is made is retained for the purpose of making future interest payments or for certain other authorized uses relating to the UI program. This bill creates a segregated fund called the unemployment interest payment fund for deposit of all unencumbered moneys collected on interest assessments and all moneys to be collected on assessments previously made. Under the bill, any interest earned on the assessments pending transfer to the federal government and any interest or penalties collected from employers who are delinquent in paying their assessments is credited to this segregated fund. The bill provides that DWD shall use the moneys in the fund to make interest payments due to the federal government on advances made to the unemployment reserve fund. The bill directs DWD to use excess moneys in the fund to pay interest due in future years, or if DWD determines that additional interest obligations are unlikely, the bill directs DWD to use the excess moneys to pay benefits. The bill also makes delinquent assessments subject to a simplified collection procedure that is currently used by DWD for collection of other UI liabilities.

Recovery of UI liabilities resulting from incorrect earnings reports Currently, DWD may utilize procedures available under state and federal laws to set off adjudicated UI liabilities against refunds or other payments that may be payable to a liable individual under state law or to offset adjudicated UI liabilities for fraudulent practices against refunds that may be payable to a liable individual under federal tax laws. This bill permits DWD to offset adjudicated UI liabilities for failure to report earnings in the same manner.