Proposed Unemployment Insurance Changes Threaten Benefits

On Behalf of | May 30, 2013 | Unemployment Insurance

Yesterday, Wisconsin State Legislature’s Joint Finance Committee, a 16-member standing committee, proposed substantial changes to the Unemployment Insurance system, including big changes to the definition of “misconduct” in unemployment insurance cases.

The Committee’s proposal would change the standard so that discharged workers would not receive unemployment insurance payments if their employers could establish that the employees were at “substantial fault” for the termination. The new standard would no doubt be thoroughly defined both by statue and eventually by Court interpretation. However, with a Republican controlled legislature, the changes proposed by the Republican led committee (Republican Senator Alberta Darling and Republican Representative John Nygren co-chair the committee) are likely to eventually become law, and the new standard will clearly put employees in a less favorable position than they are in today. The change would alter the more than 70 year old Wisconsin Supreme Court “misconduct” standard which is currently as follows:

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 interest, 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 incidents or good faith errors in judgment or discretion are not to be deemed ‘misconduct’ within the meaning of the statute.”

Boynton Cab Co. v. Neubeck & Ind. Comm., 237 Wis. 249 (1941) (emphasis added).

Under current law, performance deficiencies and mistakes are not considered misconduct. With a “substantial fault” standard, depending on the definition and interpretation, benefits could apparently be denied if an employee makes an honest mistake, provided he is at fault. The proposed changes would also reportedly eliminate nine instances in which a worker can quit a job and still claim benefits, including the exception for employees quitting jobs to relocate with their non-military spouses who receive new work at locations far from their current residences.

The Committee has taken an unusual path by skirting the Unemployment Insurance Advisory Council, which is comprised of five business representatives, five labor representatives and a nonvoting chairperson. Legislators have based their changes to the unemployment insurance system on the Council’s recommendations since before the Wisconsin Supreme Court’s 1941 Boyton Cab decision.

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Nicholas M. McLeod is an associate attorney with Alan C. Olson & Associates. Contact him at: [email protected]

Watch Attorney McLeod in a PBS special about UI here.


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