Republican leaders say DWD not following law with benefit payments, could lead to tax hikes for businesses

Department of Workforce Development (DWD)

MADISON, Wis. — Two of Wisconsin’s top Republicans called on Democratic Gov. Tony Evers to correct problems with the state’s unemployment insurance office, alleging the division has been breaking the coronavirus relief law in issuing payments out of the wrong account.

Assembly Speaker Robin Vos, R-Rochester, and Sen. Majority Leader Scott Fitzgerald, R-Juneau, said Act 185, the law created after the passage and signage of the state’s coronavirus relief legislation in April, included a provision that required unemployment insurance claims specifically related to the coronavirus emergency not be charged to a contribution employer’s account, which is the standard practice. Instead, the pair said lawmakers dictated that claims be charged to a balancing account, which they say is supported by interest on the unemployment insurance trust fund and solvency tax paid by employers.

Vos and Fitzgerald said the Department of Workforce Development has not been doing what the legislation laid out, which could lead to tax hikes for businesses. According to the DWD website, the amount in the employer’s account at the end of the fiscal year dictates their tax rate for the following year.

“The purpose of this provision was to attempt to mitigate the huge tax increases that employers most impacted by the COVID-19 crisis would see as a result of the normal June 30 calculation,” they wrote. “The employers who would see the largest tax hikes are the same employers whose businesses have been severely impacted and may struggle to keep their doors open even as the state begins reopening.”

Vos and Fitzgerald said this problem is on top of a backlog of thousands of Wisconsinites still waiting for unemployment benefits.

“It is incomprehensible that the department charged with workforce and employment would mindfully act to make it harder for unemployed workers to get back into the workforce,” they wrote. “Time is short. We urge you to immediately correct this situation and assure that this law is being followed and that the tax rates will be reflective of legislative intent, codified by your signature.”

Evers has not yet responded to the letter. A request to the DWD for comment was not immediately returned. This story will be updated.