Friday, August 27, 2010

Understanding Unemployment Compensation in Wisconsin

Unemployment benefits is a very misunderstood concept--for lack of a better term. As an attorney that focuses on labor and employment law, anytime I get phone calls from people with potential labor or employment law claims, I almost always delve into the topic of unemployment benefits because often times I am dealing with someone who was recently separated from their employment.

I first ask whether they are receiving or have applied for unemployment compensation, and, depending on the answer, sometimes I have to probe a little more to determine whether or not they are eligible.

Have Enough Wages Been Earned?
In Wisconsin, the calendar year is divided into quarters and the first quarter begins in January. To determine whether you have enough wages to qualify and how much you can be paid, you take the first four of the last five completed calendar quarters before the week you file an initial claim application for a new benefit year. If you do not have enough wages to qualify for a claim using the base period described above, an "alternate base period" will be used. The alternate base period will be the four most recently completed calendar quarters before the week you filed your initial claim application for a new benefit year.

Covered and Excluded Employment
Covered employment is work you perform for an employer who is subject to the unemployment insurance law. However, some work is "excluded" (not covered) even when performed for a covered employer. Only wages paid from covered employment can be used to qualify for unemployment benefits and to calculate how much you can be paid. Examples of "excluded" employment are if you work for an educational institution while you are a student there or work as a real estate or insurance salesperson if paid only by commission.

Qualifying Wages
To qualify for unemployment benefits you must have been paid wages from covered employment in at least two quarters of your base period. You need:

■Enough wages in your high quarter to qualify for the minimum Weekly Benefit Rate ("WBR");
■Wages in your 3 lowest quarters that equal at least 4 times your WBR when added together;
■Total base period wages equal to at least 35 times your WBR; and
■If you were paid benefits in a prior benefit year which has ended, you must have worked since the beginning of that benefit year and earned at least 8 times the WBR of that claim.
Your base period wages will not automatically include monies you may have authorized with-held as part of a cafeteria or similar plan. You may request that these monies be added to your base period wages by calling a claims specialist.

There is a lot more that goes into computing benefits that are beyond the scope of this article and most telephone conversations with potential clients. After it appears the person has earned enough wages, I then ask them how the separation occurred--i.e., were they terminated or did they quit. The burden lies with the party that caused the separation from employment.

Common Disqualifications from Benefits
Most people I encounter almost always have severe misconceptions of whether they are eligible for unemployment benefits. People who are terminated think that just because they are terminated that they are automatically ineligible and people who quit think that just because they quit that are automatically ineligible for benefits.

If You Are Terminated Employer Must Show "Misconduct"
Whenever I encounter a person who was terminated from their employment, I explain to them that, because it was the employer who caused the separation from employment, it is their burden to show that they engaged in "misconduct connected to their employment." Misconduct is a legal term that isn't defined by statute but was defined by the Court in Boynton Cab v. Neubeck, 237 Wis. 249, 296 N.W. 636 (1941):

". . . the intended meaning of the term 'misconduct' . . . is limited to conduct evincing such willful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to his employer. On the other hand mere inefficiency, unsatisfactory conduct, failure in good performance as the result of inability or incapacity, inadvertencies or ordinary negligence in isolated instances, or good-faith errors in judgment or discretion are not to be deemed 'misconduct' within the meaning of the statute."

So, believe it or not, a garbage truck driver who gets into three accidents at no fault of his own, should be eligible for unemployment benefits because the accidents were not "misconduct"--they were not willful or in wanton disregard, but merely accidents.

If You Quit Your Employment, You Must Show Good Cause
It is usually a lot more difficult for someone to be eligible for unemployment benefits when they quit because then the burden is on them to show that they quit for "good cause." Good cause is another term not defined by statute and held to be a broad and subjective concept and involves an assessment of the reasonableness of the employer's conduct and of the employee's response.

There are a number of other reasons one may be disqualified for unemployment benefits, but these are often the main mistaken concepts I encounter as a practitioner. If you have questions regarding your eligibility feel free to contact me!

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