Senate Passes Unemployment Insurance Reform

MacIver News Service | June 12, 2013

[Madison, Wisc…] A package containing some major reforms to Wisconsin’s unemployment insurance policy passed the State Senate late Tuesday afternoon on a 17-15 vote.

Democrats argued the bill undermined the authority of the Unemployment Insurance Advisory Council, a group of lobbyists who meet regularly at the Department of Workforce Development and set the state’s UI policy.

“We have always unanimously supported their decisions,” said Sen. Dave Hansen (D-Green Bay). “The way [this bill] came before us violates the very tradition we’ve had in place for decades.”

This year Senator Frank Lasee (R-De Pere) and Representative Dan Knodl (R-Germantown) challenged that tradition.

As the MacIver News Service previously reported, the state ran out of UI funds in 2009 and had to start borrowing funds from the federal government, which eventually resulted in a debt of $1.24 billion, plus interest. Federal law does not allow for the interest payments to come out of the UI reserve fund, and so DWD has been sending Wisconsin employers extra bills to cover the interest.

Lasee and Knodl believe that situation arose because Wisconsin is far more generous with UI benefits than most other states. For example, there are 18 reasons a worker in Wisconsin can quit their job and still receive UI benefits. Also, a worker can be fired for stealing from their employers, and then still receive benefits.

Reasons like those prompted Knodl (and other lawmakers) to send a list of 33 recommendations to the UI council. The council made recommendations for changes, that were then included either in the state budget or in AB 219/SB 200. Most were adopted entirely and others were modified. It does not appear any of the council’s recommendations were rejected altogether.

Senator Hansen suggested the Advisory Council does not currently, and should not in the future, be limited to an advisory role.

“We are setting up a path where our Unemployment Insurance Advisory Council is either ignored or becomes strictly advisory and that is not a path that we want to take,” he said.

Senator John Lehman (D-Racine) argued it wasn’t right to interfere with the council’s work.

“We shouldn’t pose as front line members of a committee that historically works on compromises that in the past Republicans didn’t like that Democrats didn’t like, but we did not touch it,” he said.

Seven of the 33 items were adopted by the Joint Committee on Finance in the budget, like changes to misconduct language, elimination of many quit exceptions, and using GPR to make the interest payments instead of charging employers.

Four of the items were eliminated. The remaining 22 were included in the Senate and Assembly bills. That included things like job search requirements, how DWD overpayments are handled and increase the agencies ability to recoup overpayments.

Washington is also tuned into UI concerns. A recent federal law prevents individuals from collecting both UI and Disability at the same time. That was also one of the 33 items for reform in Wisconsin.

The State Assembly is expected to take up the UI bill on Wednesday.