REPRESENTING THE INTERESTS OF EMPLOYERS AND WORKERS TO IMPROVE WISCONSIN'S UI LAWS

UNEMPLOYMENT INSURANCE ADVISORY COUNCIL

ACTIVITIES REPORT
2024

   

UCD-16480-P (R.01/2024)
 STATE OF WISCONSIN

January 31, 2024

The Honorable Tony Evers

Office of the Governor
115 East, State Capitol Building
Madison, WI 53702

Wisconsin State Legislators

State Capitol Building
Madison, WI 53702

Dear Gov. Evers and Members of the Legislature:

The Department of Workforce Development (DWD) is pleased to present the 2024 report on ac vi es of Wisconsin's
Unemployment Insurance Advisory Council.

Wisconsin's thriving economy rests on a long tradi on of collabora on among employers, employees, educators,
government en es, and community stakeholders. This collabora ve spirit has contributed to recent historic economic
successes such as a record-low monthly unemployment rate of 2.4% last year and an all- me high of 3,026,500 total
nonfarm jobs in December 2023. Meanwhile, Gov. Tony Evers' groundbreaking efforts to remove employment barriers
and address a worker quan ty challenge that has been decades in the making are advancing Wisconsin's workforce and
ensuring a robust talent pipeline for employers in need of workers.

Wisconsin's tradi on of collabora on also is reflected in the Legislature's crea on of the Unemployment Insurance
Advisory Council almost a century ago. The council advises the Legislature and DWD on ma ers concerning Wisconsin's
Unemployment Insurance (UI) program, and it recommends changes to improve the state's UI laws. Recommenda ons
of the council represent the interests of employers and workers.

The council and the DWD look forward to con nuing the collabora ve spirit that has guided council ac vi es for decades
to further support and strengthen Wisconsin's UI program.
Sincerely,

Secretary-designee, Amy Pechacek

Department of Workforce Development
 CONTENTS

1 EXECUTIVE SUMMARY

1 INTRODUCTION

2 ABOUT THE UNEMPLOYMENT INSURANCE ADVISORY COUNCIL

3 COUNCIL MEMBERSHIP

4 COUNCIL PROCEDURES
BUSINESS MEETINGS
PUBLIC HEARING

5 LAW CHANGES ENACTED DURING THE REPORTING PERIOD

BENEFITS CHANGES
TAX CHANGES
ADMINISTRATIVE CHANGES
2022 FINANCIAL OUTLOOK REPORT RECOMMENDATIONS
2023 AGREED BILL DELIBERATIONS

8 LAW CHANGES RELATED TO UI NOT CONTAINED IN THE AGREED BILL

8 OTHER DELIBERATIONS OF THE COUNCIL

9 ISSUES PENDING WITH THE COUNCIL

RULEMAKING PROPOSAL

9 CONCLUSION

STATE OF WISCONSIN
EXECUTIVE SUMMARY
The Unemployment Insurance Advisory Council has worked to ensure interests of employers and
employees are represented in Wisconsin's UI laws for close to a century. These laws have been
founda onal to the success of Wisconsin's UI program in suppor ng an economy that works for
everyone, including those who are out of work through no fault of their own, and employers who
financially support the program.

The 2024 Unemployment Insurance Advisory Council Ac vi es Report summarizes council ac vi es

during a me of unprecedented transforma on in the UI program and record-breaking performance
of Wisconsin's labor market economy. In calendar year 2023, Wisconsin's monthly unemployment rate
reached an all- me low of 2.4% and the state saw an all- me high of 3,026,500 total nonfarm jobs in
December. The state's labor force par cipa on rate remained above the na onal average, and ini al
and weekly unemployment claims reached seasonal historic lows. Meanwhile, Gov. Tony Evers'
groundbreaking efforts to remove employment barriers and address a worker quan ty challenge
decades in the making helped thousands of workers and supported a robust talent pipeline for
employers in need of workers.

During this me, Wisconsin con nued its unprecedented, mul -year effort to modernize and strengthen
its UI system, building on efforts launched in the wake of the COVID-19 pandemic using American Rescue
Plan Act funds and other federal funds. Among the largest of moderniza on efforts is the replacement of
a 1970s-era COBOL-based mainframe with a modern, secure, and agile system to process UI claims.
Addi onal projects supported by federal funds have addressed equity and access to benefits, increased
accuracy and security, introduced efficiencies, and improved customer service. More recently, DWD
announced upcoming upgrades to the UI employer portal. In addi on, federal funds allowed Wisconsin
to build upon the state's program integrity and fraud preven on and detec on efforts.

The significant progress Wisconsin has made to improve and modernize its UI program is grounded
in a proud legacy that dates to 1932, when Wisconsin enacted the na on's first unemployment
compensa on law. The ac vi es in this report con nue this progress and reaffirm the cri cal role that
the council plays in the success of Wisconsin's UI program.

INTRODUCTION
This report summarizes the delibera ons of
the Unemployment Insurance Advisory Council
and outlines the posi on of the council
concerning each proposed change to UI laws.
This report is prepared by the DWD Secretary
and provided to the Governor and Legislature
as required by Wis. Stat. § 16.48(3). As this law
was amended last session to change the
repor ng period for this report, the report
covers relevant ac vi es since 2022.

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 1

ABOUT THE UNEMPLOYMENT
INSURANCE ADVISORY COUNCIL
The Legislature created the council in 1932 to advise DWD and the Legislature on policy ma ers
concerning the development and administra on of UI law. For over 90 years, the council has acted as
a catalyst for labor and management members to work together to ensure stability in the UI system
and collaborate on posi ve changes to enhance the UI program.

The council's main responsibili es are:

Advise the department in its administra on of UI law;
Report its views on pending legisla on affec ng the UI program to legisla ve commi ees; and
Submit its recommended changes to Wisconsin's UI law to the Legislature.
The council examines poten al UI law changes on an ongoing basis, providing a balanced forum
where the interests of both employees and employers are considered. The council's final nego ated
recommenda ons to change UI law are presented to the Legislature as an "agreed bill" for the
Legislature's considera on.

The Legislature has tradi onally recognized the value of the council process in bringing together the
two groups most affected by the UI program: employees and employers. The Legislature's support
of the council process has helped to ensure Wisconsin's UI law con nues to conform to federal
requirements, allowing Wisconsin to receive the federal funding necessary to administer the UI
program and for employers to receive federal tax credits.

The council regularly communicates with the Legislature about specific issues that impact the UI
program. Members of the Legislature are encouraged to a end council mee ngs and present their
proposed changes to UI law to the council before introduc on.

1
The council responsibili es are specified in Wis. Stat. § 108.14(5)(a).

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 2

COUNCIL MEMBERSHIP
The DWD Secretary appoints council members to serve six-year terms. The council is composed of five
management members represen ng the interests of employers, and five labor members represen ng
the interests of employees. The management and labor members come from various backgrounds to
portray the different sectors of Wisconsin's economy. State law requires one management member to
be an owner of a small business or represent an associa on primarily composed of small businesses. In
addi on to these 10 vo ng members, a permanent classified employee of the department serves as the
nonvo ng chair of the council.

Employer Representatives (Management Members)

David Bohl – General Counsel, J.H. Findorff & Son Inc.: Term expires Sept. 14, 2027.
Michael Gotzler – Shareholder, Li ler Mendelson and Director, Wisconsin Associa on of Staffing
Services: Term expires June 30, 2029.
Sco M. Manley – Execu ve Vice President of Government Rela ons, Wisconsin Manufacturers &
Commerce: Term expires Aug. 31, 2027.
Susan G. Quam (Small Business Representa ve) – Execu ve Vice President, Wisconsin Restaurant
Associa on: Term expires June 30, 2029.
Kathy Thornton-Bias – President and CEO, Boys & Girls Clubs of Greater Milwaukee: Term expires
April 30, 2027.
Employee Representatives (Labor Members)
Di Ann Fechter – Business Representa ve, Interna onal Associa on of Machinists and Aerospace
Workers District Lodge 10: Term expires Nov. 13, 2024.
Sally Feistel – Sub District Director, United Steelworkers District 7: Term expires May 31, 2026.
Corey Gall – President, Wisconsin Pipe Trades Associa on: Term expires Aug. 31, 2027.
Shane Griesbach – Business Representa ve, Interna onal Union of Opera ng Engineers Local 139:
Term expires June 30, 2029.
Christopher Harris – Execu ve Board Member, United Steelworkers Local 7-209: Term expires
Aug. 31, 2027.
Chair (non-voting)
Janell Knutson – Director, Bureau of Legal Affairs, UI Division, State of Wisconsin Department of
Workforce Development.

Wis. Stat. § 15.227(3)

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 3

COUNCIL PROCEDURES
Business Mee ngs
During the biennial term, council members nego ate proposed changes to Wisconsin's UI law and
review administra ve rules dra ed by the department, and evaluate unemployment-related legisla on
proposed by lawmakers. The council typically meets monthly to allow labor and management the
opportunity to exchange ideas and opinions so the interests of employers and employees are
represented and considered. Council mee ngs are open to the public, and no ce is provided under
Wisconsin's open mee ngs law. In addi on to the public part of council mee ngs, management and
labor members can convene in separate, closed caucus sessions to discuss poten al law changes.

The chair leads council mee ngs and, generally, presents departmental proposals to change UI law to
the council for review. Departmental proposals generally include an analysis and ra onale of each
suggested law change with a descrip on of such change; the history and background of current law;
poten al federal conformity issues; the policy and fiscal effects; and the administra ve feasibility and
effect of the proposal. Council members deliberate department proposals, their own proposals, and
any unemployment-related bills pending in the Legislature. A vote of seven of 10 vo ng council
members is needed for the council to act on any ma er.

Public Hearing
The proposals for inclusion in the agreed bill are developed based on input from various sources
including employer representa ves, employee representa ves, legislators, the department, and
the public. Each biennium, the council holds a statewide hearing for the public to suggest possible
changes to the UI program.

Before the public hearing, the council invites wri en comments on poten al UI law changes. The
public can send sugges ons to the department by le er or email to a dedicated account. The
department compiles all comments submi ed directly or at the public hearing to present to the
council. The council considers the public comments as they develop poten al reform ideas for the
upcoming agreed bill. The council held a public hearing in November 2022 and factored the input
received from the public into the UI law changes included in the most recent agreed bill.

3
Closed caucus sessions are permissible under Wis. Stat. § 19.85(1)(ee).
4
Wis. Stat. § 108.14(5)(ag)

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 4

LAW CHANGES ENACTED DURING
THE REPORTING PERIOD
As in the previous legisla ve session, the agreed bill was bifurcated into two bills: one bill
encompassed the appropria ons items that needed to be referred to the Joint Commi ee on Finance;
the other bill included the policy items. The two bills were introduced in the Legislature in early 2022.
While a public hearing was held in the Senate on SB 899, no ac on was taken on the appropria ons
bill in the Assembly. The policy bill (AB 910 / SB 897) was enacted on April 8, 2022, as 2021 Wis. Act 231.
Following are summaries of significant provisions in 2021 Wis. Act 231:

Benefits Changes
Effect of a Criminal Convic on
Administra ve determina ons are typically issued before the department refers ma ers for criminal
prosecu on. But criminal prosecu ons may result in court-ordered res tu on in instances where the
department has not yet issued an administra ve determina on that a debt is owed. Act 231 provides
that final criminal convic on judgments are binding on criminal defendants for the purposes of related
departmental determina ons.

Departmental Error
Under prior law, the department waived the recovery of benefits that were erroneously paid if the
overpayment was the result of departmental error, such as a computa on error, misapplica on or
misinterpreta on of law, or mistake of eviden ary fact. However, an amendment, modifica on, or
reversal of a departmental determina on by an appeal tribunal, the Labor and Industry Review
Commission (LIRC), or a court is not departmental error for the purposes of waiving the overpayment.
LIRC had waived some overpayments if it found an appeal tribunal allowed benefits in error, even if the
appeal tribunal followed a LIRC or court decision that was later overturned. LIRC considered appeal
tribunals part of the department since administra ve law judges are department employees. Act 231
amends the law to provide an error made by an appeal tribunal is not departmental error.

Camp Counselor Exclusion

Federal unemployment law excludes the services of camp counselors from the defini on of
"employment" if specific criteria are met. Act 231 adds a corresponding exclusion to state law
for private for-profit employers of camp counselors.

Tax Changes
Reimbursable Employer Debt Assessment Charging
When employers subject to reimbursement unemployment insurance financing ("self-insured") are
charged for UI benefits resul ng from iden ty the , the department restores those charges to the
employers' accounts from the UI balancing account. The 2015 – 2016 UIAC agreed bill (2015 Wis. Act 334)
required the department to set aside $2 million in the UI balancing account, plus interest, to restore
iden ty the charges to reimbursable employers' accounts. Nonprofit reimbursable employers may also
need to pay an annual reimbursable employer debt assessment (REDA) payment for uncollec ble benefit
reimbursements owed to the department from other reimbursable employers who are no longer in
business. Act 231 requires a limited amount of the reimbursable employer iden ty the funds

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 5

set aside in the UI balancing account be made available to recover uncollec ble reimbursements
instead of assessing the REDA (or to reduce the amount of the REDA). This law change provides that the
iden ty the fraud funds may be used to pay the REDA only if the use of those funds would not cause
the balance of the set aside funds to drop below $1.75 million.

Fiscal Agent Elec on of Employer Status

Individuals who receive long-term health support services in their home through government-funded
care programs are considered employers under Wisconsin's unemployment insurance law. These
employers receive financial services from fiscal agents who directly receive and disperse funds from
government programs. The fiscal agent must report employees who provide services for the employer
to the department and pay UI taxes on behalf of the employer. Under current law, if the worker is a
certain class of family member of the person receiving care, the worker is ineligible for UI benefits
when the employment rela onship ends. Act 231 permits private fiscal agents, not government units,
to choose to be the employer of workers who provide care services under chapters 46, 47 and 51.

Work Share Amendments

2019 Wis. Act 185 and 2021 Wis. Act 4 temporarily provided more flexibility for work share plans such
as: reducing the number of employees needed for a work share plan from 20 to two and increasing the
highest amount an employee's hours can be reduced from 50% to 60%, which is the most allowed
under federal law. Act 231 makes these changes permanent and permits a plan to extend up to 12
months in a five-year period.

Administra ve Changes
Act 231 changes the deadlines for the department to submit certain statutorily required reports to the
Legislature to improve the usefulness of the reports to the Legislature, the Governor, and the council.
The deadline for the UI Financial Outlook Report was changed from April 15 of each odd-numbered
year to May 31 of each even-numbered year. The deadline for the report summarizing the
delibera ons of the Unemployment Insurance Advisory Council was changed from May 15 of each
odd-numbered year to January 31 of each even-numbered year.

Prohibi ng DOR Collec on of UI Debts

Prior law required state agencies and the Wisconsin Department of Revenue (DOR) to enter into an
agreement for DOR to collect debts owed to agencies under certain condi ons. Act 231 prohibits DOR
from collec ng debts on behalf of the UI division.

Administra ve Rule Changes

In addi on to the statutory changes in
Act 231, the council acted on the
department's dra administra ve rule
conver ng from SIC to NAICS codes for
use in determining employer tax rates,
along with other minor and technical
changes. The dra rule was approved by
the council at the January 2022 mee ng
and final rule became effec ve
July 1, 2022.

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 6

2022 Financial Outlook Report Recommenda ons
The 2022 Financial Outlook Report projected the UI Trust Fund balance at the end of 2023 to be $1.42
billion. In the 2022 Financial Outlook Report, the DWD Secretary recommended the council review and
advance legisla ve measures that strengthen UI Trust Fund solvency while suppor ng the integrity of
the UI system.

The Secretary urged the council to pursue a balanced approach to rebuilding the UI Trust Fund that
acknowledges the impera ve of delivering on UI's promise to fairly distribute benefits, as well as
decrease and prevent, the economic burdens resul ng from unemployment.

No ng that the UI Trust Fund will need to grow again to avoid borrowing in a future recession, the
Secretary encouraged the council to review the UI financing system, including the rate schedules, to
determine if any adjustments should be made to ensure adequate funding for a solvent UI Trust Fund
that will be able to pay benefits in mes of economic downturn without the financial burden on
employers of borrowing. When reviewing UI Trust Fund financing, the Secretary encouraged the council
to also consider benefit rates and eligibility policies that are sufficient to provide workers the financial
assistance necessary to withstand temporary periods of unemployment.

The council reviewed the Financial Outlook Report and considered the Secretary's recommenda ons.
No adjustments to the UI financing system, including the rate schedules, were included in the agreed bill.

However, the actual UI Trust Fund balance as of Dec. 31, 2023, was $1.6 billion. During 2023, revenue
was higher than projected and benefit payments were lower than projected.

The next Financial Outlook Report is due to the Governor, Legislature, and council in May 2024 and will
have updated UI Trust Fund balance projec ons along with department recommenda ons.

2023 Agreed Bill Delibera ons

The council members considered the comments gathered at the public hearing in November 2022,
the departmental proposals, and their own proposals in the development of the agreed bill. At the
Jan. 4, 2024 mee ng, the council agreed to the following statutory changes in the pending
agreed bill:

Appropria on Provisions
Various changes to the unemployment insurance law and making an appropriaƟon (UIAC
"AppropriaƟons" Bill)
This proposed provision would create an administra ve fund for receiving the employer interest and
penal es collected under Wis. Stat. § 108.221(1) and any amounts the UI division collects that are not
designated for another fund. Like other funds related to the UI program, the amounts in the newly
created administra ve fund would be designated as "nonlapsible." With the crea on of the
administra ve fund, the department will be able to provide consistent treatment for the amounts
collected and ensure amounts paid by employers remain within the UI program.

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 7

Benefit Provision
Imposter Penalty
The council proposes imposing a new imposter penalty of $5,000. This penalty would be assessed
against known imposters who make false statements with the intent to receive UI benefits in the name
of another person. Specifically, this penalty relates to a fraudulent ini al claim where the imposter
a empts to receive benefits but does not actually receive any benefits.

Tax and Benefit Provision

Electronic CommunicaƟon and Filing
The council proposes statutory changes to expand requirements for electronic filing, electronic
communica on, and electronic payments. Currently, employers with at least 25 employees must use
electronic tax filing and make electronic payments. This proposal makes such provisions mandatory
for all employers, unless the employer shows good cause for being unable to use electronic methods.
Also, this proposal mandates electronic communica on for claimants and employers, unless the
claimant or employer has good cause for being unable to use electronic methods. Finally, the proposal
provides that the department may use electronic records and electronic signatures. The provision related
to electronic communica on will become effec ve when the department has the technological capability
to fully implement it.

LAW CHANGES RELATED TO UI NOT

CONTAINED IN THE AGREED BILL
No other UI program-related bills were enacted during the repor ng period.

OTHER DELIBERATIONS OF THE

COUNCIL
2015 Wis. Act 334 created a new program integrity assessment of 0.01% and reduced employer taxes by
the same amount, resul ng in no tax increase for Wisconsin employers. The proceeds of this assessment
are deposited into the UI Program Integrity Fund and used by the department for program integrity
ac vi es.
In July 2022, the council approved the DWD Secretary's request to implement the 0.01% program integrity
assessment for 2023 and did so again in August 2023 for 2024. The proceeds from this assessment allow
the department to con nue an -fraud and other program integrity efforts without raising taxes. The
council recognizes the value of the assessment as it relates to the department's program integrity efforts,
and has unanimously approved this request every year since the assessment was created.

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 8

ISSUES PENDING WITH THE
COUNCIL
Rulemaking Proposal
Unemployment Insurance Appeal Hearings
UI appeal hearings are currently held by telephone, and processes are governed by departmental rules.
The council is considering rule changes related to the following items:
Hearing no ces;
In-person, telephone, and videoconference hearing procedures;
Hearing records;
Requests for reasonable accommoda ons for hearings;
Requests for in-person hearings;
Postponement of a benefit hearing when hearing exhibits are not mely sent to a party; and
Release of UI records to a person who is not a party or a party's representa ve.
The proposed scope statement for UI hearings - DWD 140 is pending review and approval with the
council.

CONCLUSION
Since its incep on, the council process has fostered collabora on among those most invested in the UI
program and developed reforms that maintain the integrity of the UI program and the solvency of the
UI Trust Fund. This collabora on has ensured that UI benefits remain available to workers who lose
their job through no fault of their own.
The council looks forward to con nuing its posi ve working rela onships with the Legislature and the
Governor.

| UI ADVISORY COUNCIL ACTIVITIES REPORT 2024 9

 STATE OF WISCONSIN

201 E. Washington Ave.

Madison, WI 53703
608-266-3131 | dwd.wisconsin.gov

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