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Godfrey & Kahn Updates

Employers take note: Wisconsin unemployment compensation overhaul has taken effect

February 14, 2014

Last session, the Wisconsin legislature revised Wisconsin’s unemployment compensation statute as part of the 2013-15 biennial budget bill. The changes will largely benefit employers and affect employee claims for unemployment compensation benefits. The changes began affecting unemployment compensation benefit determinations on January 5, 2014.

Each entry in this series of blog posts will address a key aspect of the new unemployment compensation provisions, how the changes may affect employers and any affirmative steps employers may consider taking in response. This post provides a general overview of the changes and a brief discussion regarding attendance policies.

General Overview

The most significant changes made by the new unemployment compensation provisions were to redefine what behavior and actions will constitute misconduct for unemployment compensation purposes. In addition, the provisions created a two-tier standard that will be used to disqualify applicants for benefits. In addition to disqualification for misconduct, an employee’s benefits may be delayed or denied if the employee was terminated for “substantial fault.” According to the Wisconsin Department of Workforce Development (DWD), “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.” These changes allow employers to challenge more benefit claims that are made by terminated employees.

The new provisions also eliminated eight of the eighteen quit exceptions that allow employees to collect benefits after they have resigned or quit their employment. Further, the new unemployment compensation provisions now require that applicants for benefits complete at least four work searches each week to collect benefits. There are additional provisions that limit benefits in certain circumstances, increase consequences for fraud, and provide additional requirements for requalification for benefits following disqualification.

Tardy or Absent Employees and “Misconduct”

In the past, it was much more difficult for employers to contest collection of unemployment benefits by former employees based on terminations for poor attendance. Wisconsin law required that

  1. employers establish a very specific attendance policy which defined absenteeism and tardiness,
  2. employees be permitted at least five instances of absence or tardiness before termination, and
  3. employers demonstrate that the employee was aware of the policy.

The new provisions eliminate these requirements. Under the revised law, misconduct includes an employee who is

  1. absent “on more than 2 occasions within the 120−day period before the date of the employee’s termination,” unless the employer has a policy stating otherwise in an employee manual (and of which the employee has acknowledged receipt with his or her signature) or the employee is excessively tardy in violation of the employer’s policy and
  2. the employee did not provide his or her employer notice and one or more valid reasons for the absenteeism or tardiness. Wis. Stat. § 108.04(5)(e) (2013-2014).

As a result of these changes, an employer may contest an employee’s application for benefits if the employee was terminated for at least two absences within a 120-day period and the employee failed to give notice and a valid reason for the absences, even if the employer does not have an attendance policy. As a result, employers should revisit their attendance policies with their legal counsel to ensure they can benefit from these recent changes. Employers must ensure they have an acknowledgement from the employee which indicates that the employee received the employer’s attendance policy. Furthermore, in attendance‑based terminations, employers should follow their policies and document an employee’s failure to give notice or an explanation for absences/tardiness if they plan to contest the employee’s application for unemployment benefits.

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