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Mar 21, 201711:11 AMLaw at Work

with Jessica M. Kramer and Ashlie B. Johnson

How badly does my employee have to mess up to be denied UI benefits?

(page 1 of 2)

An employee messed up and now you need to fire him or her. That sounds more cut and dry than it is because the questions remains — will he or she receive unemployment insurance (UI, also sometimes referred to as unemployment compensation) benefits?

Well, the UI division at the Wisconsin Dept. of Workforce Development and the courts look at just how bad the conduct was. In a recent decision, the Wisconsin Court of Appeals provides employers with additional guidance on what type of conduct is bad enough to justify a denial of UI benefits. (If you like reading court decisions, you can find the Court of Appeals’ full decision in Easterling v. LIRC here.)

The standard for decades was “misconduct.” If an employee was terminated for misconduct connected to employment, the employee was ineligible to receive UI benefits. If the conduct did not rise to the level of misconduct, benefits were — generally speaking — allowed. Then, the law changed in 2013. Misconduct remains relevant. However, since 2013, an employee can be found ineligible for UI benefits for conduct that involves the “substantial fault” of the employee, despite whether that conduct amounts to misconduct.

“Substantial fault” is defined by statute to include acts or omissions of an employee that the employee controls and which violate the employer’s reasonable requirements. However, this definition of substantial fault exempts the following conduct: (1) one or more minor rules infractions, unless the employee repeats it after warning from the employer; (2) one or more inadvertent errors made by the employee; (3) any failure of the employee to perform work because of insufficient skill, ability, or equipment. See, section 108.04(5g) of the Wisconsin Statutes.

The issue in the Easterling case focused on the definition of an inadvertent error that does not amount to substantial fault under the statute. In that case the employee, who was employed as a driver for a transportation service, failed to properly secure a passenger’s wheelchair before transport resulting in the wheelchair tipping over. The employer had a clear policy requiring that drivers secure wheelchairs. The employee violated the policy and was consequently terminated.

The court found that the employee’s error in failing to secure the wheelchair was inadvertent. Why? The circumstances matter, the court said. Not every failure to follow an employer’s policy would be inadvertent error. In fact, not every failure to properly secure a wheelchair would be inadvertent error. In this case, however, there were several facts that led the court to find the employee’s error was inadvertent. First, the employee usually had an experienced volunteer along to assist passengers, but did not that day. Second, the employee was trying to secure three other passengers at the same time. Third, the employee was rushing because she was parked in a busy crosswalk. Finally, she completed the first two steps of securing the wheelchair — she positioned the wheelchair properly and applied the brakes — but she forgot to complete the final step of securing the floor straps. As a result of these circumstances, her error was found to be inadvertent. Thus, she was allowed UI benefits.

What does this mean for employers? It drives home the message that each situation is unique. Each termination must be viewed on a case-by-case basis to determine whether the employee will likely be entitled to UI benefits. The bottom line: violation of a clear policy of the employer does not automatically mean an employee would be ineligible for UI benefits.

(Continued)

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Mar 22, 2017 01:35 am
 Posted by  Anonymous

My experience as a small business owner has been that there is virtually nothing that will cause an employee to be declined unemployment benefits, including these examples in my company:

- Employee quit their job with me after 2 weeks citing that the work schedule conflicted with their volunteer activities. Benefits approved!

- The employee quit after they saw a job posting of a competitor that was offering $1/hour more than I was paying them, and even though they were not offered a position by the other company, they claimed that they quit my company because I wasn't paying market rate for them, using a Craig's List posting as evidence. Benefits approved!

- Employee was terminated after drug paraphernalia and the drugs themselves (partially smoked joint) were found in my company truck they had been driving all day, a violation of written company policy, a violation of my insurance policies, and illegal. Benefits approved!

- Employee terminated for repeated no call/no show problems...literally not showing up for work at all on at least 4 or 5 occasions, and being significantly late (more than an hour) on many other occasions. Benefits approved!

- Employee was sent on an out of town, overnight trip. They did not have a credit card, so we provided them with cash for the trip, roughly $800 if I recall. They signed a receipt and were instructed to bring back receipts for what they used the money for...food, fuel, etc., and return the unused portion of cash. They returned, did not turn in any receipts, nor cash. Eventually they claim that they had put the money in a drawer in their work area and a co-worker stole it. No explanation for no receipts. Police were called, claim investigated, but even with the police report rejecting claim the money had been stolen by someone else, when we terminated and withheld missing dollars from his check...benefits approved! And we were forced to reimburse the $800 we withheld.

We appealed each one, and lost each time!

Mar 23, 2017 02:29 pm
 Posted by  Anonymous

I am sorry to read about your unfortunate experiences. You may wish to consult with an attorney regarding terminations and UI appeals in the future, if you have not done so already.

Apr 3, 2017 06:55 pm
 Posted by  Anonymous

I used to work for the UI department. Regarding the above small business owner, there is more to each one of the stories you are posting. An employee who quits within the first 30 days is eligible for UI benefits if the pay or other conditions of the job are substandard, specifically in the bottom 25% of pay or number/arrangement of hours compared to similar work in the labor market--regardless of the reason they quit. This is a protection for employees from being offered substandard pay or conditions. This isn't median pay, it is the bottom 25%. My guess is that this covers your first two situations.

Regarding the drug paraphernaleia, did you drug test the employee? How did you prove that the items/drugs were actually the employee's vs. someone else's? The department will not deny benefits based on hearsay or circumstantial evidence--you are making the decision to fire the employee and thus has the burden to prove the misconduct. I would have had that employee drug tested, then fired them for testing +.

Regarding the no call/no show issues. There is a specific law in place regarding this--108.04(5)(e) which would deny benefits if the employee had more than two no call/no shows within the 120 days prior to the discharge. IF this happened several years ago, before this law took place, did you warn the employee in writing that they would be fired for this? And then follow through? Or did you let it go until it got to be too much?

And regarding the overnight trip, again, there seems to be more to the story. I would not reimburse an employee who did not present receipts of some sort.

I'm not saying that you did anything wrong or that you are lying, only that there is more to these stories. Many small businesses are not thorough when it comes to documentation or evidence. If the employer is the separating party, they have the burden to establish proof but often don't have enough because "we are like family here" so they don't warn or document or prove

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About This Blog

Jessica M. Kramer is a partner at Kramer, Elkins & Watt LLC in Madison and writes about employment law. At KEW she handles employment law matters for businesses and individuals, and represents landlords in all aspects of landlord-tenant law. Jessica received her undergraduate degree from UW–Madison in 2000 and her Juris Doctor from the UW Law School in 2004.

 Ashlie B. Johnson, PHR, is the owner of Brooke Human Resource Solutions, serving the Dane County area. BrookeHR operates as an independent HR contracting resource for small businesses, providing a wide range of support as well as policy language, documentation, and employment agreements that meet today’s complex compliance standards. Ashlie received her B.S. in Human Resource Management from St. Cloud State University in 2002 and has been a certified PHR since 2007.

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