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State Lawmakers Consider Wisconsin Unemployment Insurance Reform

Posted by admin on April 09, 2013

Citing hundreds of millions of dollars in debt owed to the federal government, a coalition of Republican lawmakers in Wisconsin have proposed a number of changes to overhaul the state's unemployment insurance (UI) program that would modernize laws to tighten regulations and save the Badger State money.


Reforms would limit eligibility in some cases
In a letter to the Wisconsin Unemployment Insurance Council, a group of Republican state lawmakers outlined a proposed package of UI reform that included more than 30 possible changes.

The motivation behind the quest for reform was the large amount of debt Wisconsin owes the federal government, which resulted from the state's fund being unable to cope with the claims for jobless benefits that skyrocketed during the recession. Lawmakers said the state owes more than $900 million, the seventh-highest amount in the nation, though it is an improvement from the $1.5 billion it once owed.

In an effort to substantially reduce the debt and ensure such a scenario does not come into play again, the lawmakers proposed a number of reform to the state's insurance fund operations that would limit eligibility of some claimants.

For instance, a focus point of the reform is linking the length of benefit payouts to the unemployment rate. If Wisconsin's jobless rate is 8 percent of higher, the unemployed would receive a maximum of 26 weeks of state benefit eligibility. From there, the maximum amount of time is reduced by two weeks for roughly every half-percentage point drop in the jobless rate, leaving those without a job with 12 weeks of eligibility if the unemployment rate is 4.99 percent or below.

Time passed since quitting also addressed
To help reduce the state's debt, the Republican lawmakers also suggested Wisconsin use some $36 million in leftover taxpayer dollars to pay off interest accrued on the federal government's loan.

In addition, the proposal would restrict insurance eligibility for employees who have recently quit their job. Lawmakers noted Wisconsin currently has 18 different exceptions that allow employees to receive benefits after quitting; the proposal would slash that number by 10 exceptions.

Lawmakers also pressed the state to adopt a two-tiered definition of workplace misconduct that would qualify a refusal to take a drug test that was required in the employer's policy manual as an instance of misconduct.

Administering unemployment insurance obligations is often a legally dense and confusing responsibility for businesses. Considering the various reforms of such programs occurring across the country, firms can work with an HR service provider to ensure compliance in all matters.

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Topics: Wisconsin, HR Compliance, Unemployment

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