Unemployment Insurance (UI)
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Unemployment insurance (UI) is a joint state-federal program that provides temporary financial assistance to eligible individuals who have lost their jobs through no fault of their own. Benefits are based on a percentage of an individual’s earnings over a recent 52-week period.
To be eligible for UI in Wisconsin, you must have worked in Wisconsin during the past 12 to 18 months and have earned a minimum amount of wages as determined by the Department of Workforce Development (DWD). You must also be able and available to work and be actively searching for work each week that you are collecting benefits. As of November 2015, the unemployment rate in Wisconsin was 4.2%.
To be eligible for UI in Wisconsin, you must have worked in Wisconsin during the past 12 to 18 months and have earned a minimum amount of wages as determined by the Department of Workforce Development (DWD). You must also be able and available to work and be actively searching for work each week that you are collecting benefits. As of November 2015, the unemployment rate in Wisconsin was 4.2%.
The proposed budget makes several changes to the unemployment insurance program, all of which will make it harder for people to receive UI benefits. The most significant change is the requirement that all UI claimants who apply for regular UI benefits submit to drug screenings and drug tests. If the claimant refuses to be tested they will lose their UI benefits for 52 weeks. If the claimant tests positive, they must enroll in a state-sponsored substance abuse treatment program (which DWD is charged with creating under this budget) and job skills assessment in order to remain eligible for benefits.The budget also allows private employers to voluntarily submit to DWD the results of pre-employment drug screenings.
The proposed budget also drastically increases the penalty for UI fraud from a 15% to 40% surcharge on fraudulent overpayments made to claimants, in addition to the reduction of future benefits that is already in place. Additionally, the budget replaced the current fines and criminal penalties with a harsher set of graduated fines and criminal penalties with the possibility of a maximum $25,000 fine and up to 10 years imprisonment under a Class G felony charge.
The proposed budget also drastically increases the penalty for UI fraud from a 15% to 40% surcharge on fraudulent overpayments made to claimants, in addition to the reduction of future benefits that is already in place. Additionally, the budget replaced the current fines and criminal penalties with a harsher set of graduated fines and criminal penalties with the possibility of a maximum $25,000 fine and up to 10 years imprisonment under a Class G felony charge.
Joint Finance Committee Proposed Changes to the 2015-2017 Budget
The Joint Finance Committee made several changes to Governor Walker’s proposals on Unemployment Insurance. The budget initially allocated $500,000 beginning in 2016-17 for substance abuse testing and treatment; the JFC reallocated these funds to allow for $250,000 in 2015-16 and $250,000 in 2016-17. The JFC removed the 52-week ban on unemployment benefits following the refusal of a drug test or a positive test result; instead, they delegated responsibility to the DWD to determine a period of ineligibility that must elapse and/or some type of requalification requirement for such individuals. The JFC further specified that a claimant who does not pass an initial drug screening is allowed one additional positive test result without being considered out of compliance with state substance abuse treatment program requirements. The JFC also made several other minor changes to the language surrounding drug testing, making the requirements slightly less restrictive than Governor Walker’s initial recommendations.
The JFC also deleted Governor Walker’s proposed changes to criminal penalties and fines, maintaining current law on criminal penalties. However, they upheld the drastic increase in the penalty surcharge for fraudulent UI overpayments from 15% to 40% of the overpayment amount, specifying that the funds from fraud penalties be allocated to the state’s program integrity fund. (The initial 15% goes to the state’s Unemployment Insurance trust fund, as required by federal law.)
The JFC also deleted Governor Walker’s proposed changes to criminal penalties and fines, maintaining current law on criminal penalties. However, they upheld the drastic increase in the penalty surcharge for fraudulent UI overpayments from 15% to 40% of the overpayment amount, specifying that the funds from fraud penalties be allocated to the state’s program integrity fund. (The initial 15% goes to the state’s Unemployment Insurance trust fund, as required by federal law.)
Final 2015-2017 Unemployment Insurance Budget
The Legislature approved the Governor's proposed Unemployment Insurance budget as amended by the Joint Committee on Finance.
Impact on Wisconsin Women & Girls
Unemployment insurance is an important social support for low income Wisconsinites. According to the National Women’s Law Center, unemployment insurance kept 1.2 million Americans from falling in to poverty in 2013, including 427,000 women and more than 358,000 children. Furthermore, women are more economically vulnerable when unemployed or when losing UI benefits as they typically earn less while employed due to the gender wage gap and are more likely to head single parent households. By making it more difficult to receive UI benefits due to mandatory drug testing, the proposed budget is only further stigmatizing those who fall on hard times and is not effectively treating the substance abuse problems of UI claimants (see section on Drug Testing). Without UI benefits and other social services, many Wisconsin families risk falling in to poverty, which has negative health, psychological, and social consequences for the entire family.