SPN MacIver Institute 2012 National Think Tank of the Year
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Unemployment Insurance Slamming Small Business

Comments | Posted in News | By MI President Brett Healy | Posted January 25, 2013 9:09 AM

[Madison, Wisc...] It is not surprising employers have a keen interest in how unemployment insurance is distributed, given that they pay for the program through their payroll taxes. The State of Wisconsin's 2013 Regulatory Review Report reveals they have reason to be concerned.

"Unemployment laws place an unnecessary burden on businesses (particularly small businesses), it has a crushing impact on the morale of hard working citizens and facilitates a culture of entitlement dependent non tax paying people leaving the burden to sky rocket for those who remain to pay taxes," responded one business owner to a survey included in the report.
The report reveals how Wisconsin's rules for collecting unemployment are far more lax than the federal government's and other Midwest states'.

For example, there are 18 different reasons a person can quit his/her job and still collect unemployment in Wisconsin. In Minnesota there are only 9 reasons, the second most number of exemptions of any Midwest state.

"We have employees fired for verified theft or other infractions who still receive unemployment compensation," said an unnamed veterinarian quoted in the report.

People can also refuse a job and still collect unemployment. The federal government lists specific reasons for this, but Wisconsin's additional reasons are "subjective and much more open ended depending on DWD's determination," according to the report.

The Department of Workforce Development discovered about 37,000 cases of unemployment fraud in 2011. A MacIver News Service story on June 29, 2011 reported in order to be prosecuted for unemployment fraud a person must have frequently received more than $5,000 and committed 5 acts of concealment. In 2010, 2,169 people met those requirements, yet only 31 of them were prosecuted. That resulted in 11 convictions. See the story here.

DWD cannot recover UI payments made in error under current law. MNS's report on June 29, 2011 found overpayments cost the state $40.5 million in 2010.

UI recipients are required to conduct two work searches per week, but half of all recipients in Wisconsin are exempted from this requirement.

DWD recommends changes based on the information it learned in compiling its report. It wants to change its regulation requiring 4 work searches per week instead of 2. The other changes, however, must go through the legislature and be passed into law.