Department of Employment and Workforce Findings

At this point this is report is my opinion and not necessarily that of the LCI sub committee. I hope i’m wrong and these problems are fixed and taxes come down, however, I remain skeptical.

The Obama Administration’s Department of Labor has warned the committee to not have the appearance of influencing ongoing UI claims. We will make an attempt to obtain closed cases for review. I’ll try to get the 5 pager from the US DOL up soon.

SUMMARY
UI rates for all employers in 2013 may rise as much as 12% or more based upon the application of UI law by DEW in the latter half of 2012. Individual employers, furthermore, may see their rates triple or quadruple if a separated employee is found “eligible” under the application of UI law by DEW in the latter half of 2012. The basis of that application of UI law by DEW remains undetermined at this time as DEW has provided no consistent, uniform or verifiable explanation of its actions under the statutes.

The sub and staff have reviewed only a portion of the cases deemed “eligible” by DEW. Staff initially disregarded those determined “eligible” because of “non-response”, but staff subsequently determined that DEW frequently fails to follow its policy regarding employee contact. DEW indicated that it would execute its policy and attempt to contact the employers in question. DEW has not responded to staff inquires concerning the follow up.
Review of the cases otherwise deemed “eligible” reveals no discernible set of uniform or consistent standards with which DEW adjudicates claims either under the new law (Act 247) or law that has been in existence for decades. DEW apparently has no definitions of the terms “inefficiency”, “inability” and “incapacity”. DEW testified that it relies upon state case law to inform its adjudicators on these terms, but DEW has not responded to requests for those citations.

None of the cases reviewed exhibit any uniform or consistent application of these terms. Such inconsistency has resulted in dozens of incorrect rulings of “eligibility” and the employers in question will see their UI rates rise two to three-fold or more.

DEW testified that “’cause’ is something less than misconduct” and that “’cause’ includes any type of fault that does not rise to the level of ‘misconduct’ or drug use or ‘gross misconduct’”. Federal law apparently grants each state the ability to define “fault” for itself. DEW apparently has no definition of “fault”. None of the cases reviewed exhibit any uniform or consistent application of the term.
DEW testified that it has some set of standards concerning the weight of evidence. DEW provided training material that indicates that adjudicators should defer to a “preponderance of the evidence”. None of the cases reviewed exhibit any uniform or consistent application of any standards relative to evidence.

Review of the claims revealed that DEW frequently fails to follow its stated policies. The failure to follow the stated employer-contact policy has been noted. DEW also failed, in the claims reviewed, to follow its policy concerning medical absenteeism. DEW has not responded to requests for further information on these particular claims.

DEW failed in many of the claims reviewed to apply the proper statute or standard of review. Act 247 contemplates full ineligibility for claimants who exhibit “wilfull and wanton disregard of an employer’s interests….” DEW, as previously noted, apparently has no definitions for the terms of exceptions, and therefore it remains unclear how the determinations occurred—other than that the adjudicator was “convinced” as DEW testified was necessary.

DEW, finally, has failed to supply the sub with information requested both at the hearing and afterwards. It remains impossible for staff to determine why or how DEW is executing the law, new or old, without the information requested and promised.

The failure of DEW to properly or even consistently apply the law, new or old, will result in two major consequences: 1) since the claimant is fully eligible, each of these claims goes directly on the employer’s record, and that means a rise in assessment tier next year for that employer. 2) DEW has informed staff that there are, on average, now 150 claims each week ruled eligible under Act 247. At an average weekly benefit of $239, DEW will pay out $17,900,000 in benefits just for half the year that the Act 247 will be in place. Based upon historical trends, this may result in an approximately 20% or higher rate increase for all employers.
No review has been conducted of the hundreds of claims ruled partially eligible, but it appears unlikely that those claims are adjudicated with any greater consistency or fidelity to the law than the ones ruled “eligible”. The failure of DEW to provide the requested information leaves no conclusion other than DEW neither is following the law nor has a legitimate or consistent understanding of its meaning.