Wednesday, September 2, 2015

Wisconsin Unemployment and "Misconduct" vs "Substantial Fault"

For decades, in Wisconsin, whenever an employee was discharge (i.e., "fired," "terminated") from their job and applied for unemployment benefits, the inquiry was whether the employee (the "claimant") engaged in "misconduct."  The term "misconduct" is a legal term that was addressed in the seminal case of Boyton Cab Co. v. Neubeck, 237 Wis. 249, 259-60, 296 N.W. 636 (1941).  I discussed that case in an old post that can be found here.

Over the years, many employers and legislators believed that it became more and more difficult for employers to meet their burden and show misconduct and beginning on January 5, 2014, the State began considering a two-tier standard for disqualifying claimants who are discharged. A claimant is now disqualified if they are discharged for misconduct or for "substantial fault" connected with the employment.  As is true with any new language or change in the law, how this is to be interpreted in unemployment cases is still developing.

As amended by 2013 Wis Act 20, Wis. Stat. § 108.04(5g)(a) defines substantial fault as:
those acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the job but shall not include:
1. Minor infractions of rules unless such infractions are repeated after a warning was received by the employee,
2. inadvertent mistakes made by the employee, nor
3. Failures to perform work because of insufficient skill, ability, or equipment.

As explained on the Department of Workforce Development's website:
An employee’s behavior may be substantial fault when the employee violates a requirement of the employer but the violation does not rise to the level of misconduct. Substantial fault does not include: minor violations of rules unless the employee repeats the violation after warning, unintentional mistakes made by the employee or not performing work because the employee lacks skill, ability, or was not supplied the equipment.
More than a year has passed since the Act 20 provisions were applied and there are ZERO cases on the Labor and Industry Review Commission's (LIRC) website discussing this standard.  Thus, at best, claimants ought to do their best to show the three (3) exceptions listed under Wis. Stat. sec. 108.04(5g)(a), though the burden remains with the employer to show misconduct or substantial fault.

As I always advise potential clients, if you are denied unemployment, or are receiving unemployment benefits and the employer has appealed, it is ALWAYS best to retain an attorney to represent you in these appeal hearings as, even though they are relatively relaxed, they can cost you a lot of money in overpayment and penalties.  

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