A union representative is warning that proposed changes to a state statute could result in fraud charges for those who make mere mistakes when filing for unemployment benefits.
Mark Reihl, executive director of the Wisconsin State Council of Carpenters, said he has recently received calls from lawmakers and others listing concerns about proposed changes to the state’s definition of a type of fraud known as concealment. In general, critics contend that the changes would force unemployment applicants to prove that any misinformation they had submitted to the state while trying to obtain jobless benefits had been the result of a mistake. If they couldn’t submit the required proof, the presumption would be that they had committed fraud.
Reihl’s comments came at a meeting of the Wisconsin Unemployment Insurance Advisory Council, which recommends changes to the state’s laws governing jobless benefits. The council, at its May meeting, approved a draft of possible changes to the state’s definition of concealment but has yet to arrive at a final version that could be sent to the Legislature.
Reihl called for moving with deliberation.
“If not done correctly, it could have a negative effect on people who are not intentionally trying to (defraud) the system,” Reihl said Thursday.
State law now defines concealment as an attempt “to intentionally mislead or defraud (the state) by withholding or hiding information or making a false statement or misrepresentation.” Claimants who are found in violation lose their ability to collect unemployment for half a year and must pay a penalty equal to 15 percent of their ill-gotten gains.
The proposed changes would not only redefine concealment — putting less of an emphasis on the need to show malicious intent — but would also limit the evidence claimants could bring forth to defend themselves from fraud charges. In the main, the department’s proposal appears aimed at shifting the burden of proof — making it a claimant’s responsibility to show that misinformation resulted from a mistake rather than the state’s to show that it came from a deliberate attempt to defraud the government.
Reihl said that obtaining unemployment benefits requires following an often times complicated set of rules. Because of the complexity, there could be many claimants, he said, who are consistently, yet unintentionally, submitting misinformation to the state.
“I wish some of this had come out earlier,” Reihl said. “I personally think it needs a lot of discussion. … I just want to make sure that this is done in a way that doesn’t catch up the wrong people.”
The council also received a letter concerning concealment from Barbara Santiago, who wrote that she is a highway worker living in Fond du Lac. The letter, presented at Thursday’s meeting, listed Santiago’s concerns about the proposed changes to the concealment definition.
Santiago, who could not be immediately reached, wrote that a filing mistake had recently caused her to be overpaid unemployment benefits. Her employer’s payroll division did not tell Santiago she was paid benefit wages on a state-funded county project. But when she got her paycheck, Santiago realized that she had been paid the benefit wages and reported the correct wages. The overpayment was then subtracted from the next round of benefits she received.
Santiago said the proposed changes would let state officials pursue her for fraud had she not realized she had been overpaid, and the overpayment likely would have been much higher.
“If the ‘intent’ element is removed,” Santiago wrote, “a claimant in my position may not realize he or she has received benefits to which he or she is not entitled, thus might be accused of concealment. Because the errors may not be discovered for a length of time, this could lead to hefty consequences for an honest mistake.”
EDITOR’S NOTE: The above article was updated on July 1, 2015, to correct an inaccurate summary of Barbara Santiago’s letter to the Unemployment Insurance Advisory Council.