Employer Issues Update: Federal Unemployment Benefits Have Ended; Class Action Lawsuit Filed by Disabled Residents

Effective September 6, several federal programs providing new or additional unemployment insurance (UI) benefits have ended. Notably, the Federal Pandemic Unemployment Compensation (FPUC) program provided recipients of UI benefits with $300 per week in addition to the state benefits they were eligible for. The supplemental benefit was created in 2020 as part of the first major federal COVID-19 response package (CARES Act). It was established in response to rising unemployment rates as many businesses were made to limit capacity or shut down completely.

The CARES Act also established unemployment benefits for self-employed, part-time, and gig workers who would not typically be eligible for UI benefits, funded additional weeks of benefit payments beyond the standard 26 weeks available under state law, and provided a benefit for people who earn money from a mix of employment and self-employment. These federal unemployment programs were extended twice, first as part of the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) signed by President Donald Trump (R), and then again as part of the American Rescue Plan Act (ARPA) signed by President Joe Biden (D).

In May, Assembly Speaker Robin Vos (R-Rochester) and Joint Finance Committee Co-Chair Senator Howard Marklein (R-Spring Green) introduced legislation (Assembly Bill 336) to end the state’s participation in federal programs to provide or supplement unemployment benefits. The bill also would have prohibited the Department of Workforce Development (DWD), which administers UI benefits, from waiving the work search requirement for UI applicants for any reason related to COVID-19.

AB 336 moved quickly through the committee process. The legislation passed both houses of the Legislature on party-line votes and was vetoed by Governor Tony Evers (D) on June 29. The following month, on July 27, the Assembly met in extraordinary session to attempt to override the governor’s veto of AB 336. The Assembly’s veto override attempt failed 59-37 along party lines; a two-thirds supermajority of the members of each house of the Legislature is required to successfully override a governor’s veto.

Disabled Residents Sue Wisconsin Over UI Benefit Law

On September 7, a group of nine Wisconsin residents filed a class action lawsuit seeking to overturn a state law that prohibits people receiving Social Security Disability Insurance (SSDI) benefits from also receiving UI benefits. The law, implemented in 2013 and updated in 2015, was intended to prevent people who are not working from receiving both unemployment and disability payments. The lawsuit was filed in federal court. It seeks a preliminary injunction and, ultimately, a ruling against the law and an order that DWD back pay the plaintiffs’ UI benefit claims.

Unemployment Benefits Have Become a Key Political Issue in Wisconsin

Since early 2020, Wisconsin’s UI benefit system has become a key political issue and point of contention between the Republican-controlled Legislature and the administration of Democratic Gov. Evers. The emergence of COVID-19 and subsequent public health orders drove an influx of UI claims that DWD had difficulty processing in a timely manner, leading to a large backlog of claims. In his 2021 State of the State address, Gov. Evers called on the Legislature to take up his proposal to modernize the state’s UI system. The Legislature passed a compromise bill with some of the governor’s desired reforms, and DWD later secured a federal grant to fund the initial phase of updates.

Throughout 2021, the Hamilton Consulting Group has provided comprehensive coverage of this issue: