Following rule change, work-search waivers plummet

Listen to this article

In fulfillment of a previous warning, the number of unemployment claimants who were excused from having to look for new jobs because they were on seasonal layoff fell steeply this winter.

Although it’s likely impossible to say what exactly caused the decline, the lower numbers come in the wake of a rule change that critics had predicted would produce just such an outcome. At a meeting last week of a council that advises Wisconsin lawmakers on unemployment policy, state officials distributed numbers showing how often those who filed unemployment claims last winter were able to secure waivers that allowed them to continue receiving benefits even while they were excused from having to search for other jobs.

The data showed that for the nearly 1 billion unemployment claims submitted to the state last winter, the filers were able to obtain work-search waivers 27.5 percent of the time. That was down markedly from the comparable figure for the previous winter (51.8 percent).

The steep decline appeared in the first winter following a rule change that greatly reduced the maximum number of weeks a person could receive unemployment benefits without having to search for other jobs. Before June of last year, an unemployment claimant could get waivers that were good for an entire year.

Starting that month, though, the maximum was reduced to 12 weeks. Contractors and other seasonal employers almost immediately complained that more time should have been allotted.

Their chief concern was that the new requirements would cause them to lose some of their most valued employees to other companies. Unemployed workers whose waiver periods have expired are not only required to begin searching for four jobs a week but also to take any “suitable” ones that are offered. The price of refusal is to see one’s benefits cut off.

John Mielke, president of the Associated Builders and Contractors of Wisconsin, said the recent rule change makes it unsurprising that proportionally fewer work-search waivers were granted this winter. The real question then is: Of the unemployed workers whose waivers expired, how many were forced to take jobs in other industries to avoid being kicked off government assistance?

If a lot of construction workers are having to move into other industries, then contractors who were already struggling with a shortage of qualified labor would have even more reason to be upset, Mielke said. But there is another possibility, he said.

Unemployed workers might just be going through the motions and looking for jobs that they really have no intention of taking. If that’s the case, Mielke said, then the real purpose behind requiring the searches is being undermined.

“So are people conducting kind of faux job searches to comply with the requirement?” Mielke said. “Or are they changing occupations and actually going to a different employer?”

Neither outcome is necessarily welcome, he said. For that reason, Mielke said, he is considering calling on his fellow members of the Unemployment Insurance Advisory Council to think about extending the waiver period. Without going back to a full year, he said, it could probably be taken to 16 weeks or so without defeating the purpose of requiring more work searches.

Another member of the advisory council, Scott Manley, agreed that now might be the time to consider an extension. Still, he cautioned that any change could prove distasteful to as many employers as it pleases.

Construction is not the only industry now struggling with a labor shortage, he said. Manley said business owners who are regularly searching for qualified help often wonder why unemployed workers should be able to receive government benefits for long periods of time without having to look for other jobs.

“You have an employer saying, ‘I’m really upset that my employees have to take jobs with other companies,” said Manley, who is also senior vice president of government relations at Wisconsin Manufactures & Commerce. “Then you have an employer who is saying, ‘I desperately need workers, and I’m having trouble finding them.’ And we just have to find that balance.”

Mielke and Manley meanwhile agreed that lawmakers should perhaps reconsider laws that allow union construction workers to be considered conducting work searches as long as they are registered at their local hiring hall. Mielke, whose association mainly represents non-union contractors, said the system does seem to give unions a special preference.

If nonunion construction workers who are on seasonal layoffs should be up for grabs by employers in other industries, he said, then why not also their union counterparts?

“There is that basic equity question,” Mielke said. Follow @TDR_WLJDan