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Proposed law would allow state to check, freeze private bank accounts to recover overpayments to jobless

Proposed law would allow state to check, freeze private bank accounts to recover overpayments to jobless

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unemployment benefits

A bill that is speeding through the state Legislature would require jobless people to provide more proof that they are seeking work, and make it easier for the state to recover overpayments — including those made because of government errors — by allowing officials to peek into unemployed people’s bank accounts.

The proposal would also address business concerns that the state hasn’t properly trained administrative judges who rule on benefit disputes between employers and former employees.

“This is to protect the workers and lessen the burden on employers who are paying all the bills,” said Rep. Dan Knodl, a Germantown Republican and co-author of the bill, which was introduced in the Assembly and the Senate on Friday, and is scheduled for committee hearings Wednesday in both houses.

Rep. Christine Sinicki of Milwaukee, the ranking Democrat on the Assembly labor committee, said the proposed changes would hurt workers and the middle class. And Sinicki said she was concerned that Republicans would make the bills worse.

In April, Knodl and other GOP lawmakers sent a list of proposed unemployment benefit changes to the Wisconsin Unemployment Insurance Council, a group of labor and business leaders who advise legislators and the Department of Workforce Development.

Knodl said the council didn’t agree to some of the proposals — such as lowering the number of weeks a person could collect unemployment when the official jobless rate fell. The council also withheld its blessing from a plan to spend $26 million in tax dollars to pay off interest the state owed the federal government. Businesses are currently covering the interest through special assessments.

Knodl said those items aren’t in the bills, but he still supports them. “The goal is to get the fund back to solvency,” Knodl said.

Wisconsin is one of 31 states that borrowed from the federal government to finance unemployment benefits during the recession. At one point, the state owed the federal government nearly $1.5 billion, Knodl said. By last month, it was down to

$476 million, according to the U.S. Department of Labor.

Assembly Bill 219 and Senate Bill 200 would increase the top unemployment benefit by

$7 per week to $370, at a cost of

$11 million annually, Knodl said, but other changes would lead to a net overall yearly savings of

$8 million.

Among the proposed changes:

Someone denied benefits after failing to accept a job offer would remain ineligible until finding a job and earning six times his or her weekly benefit rate. Under current law the requirement is four times the weekly benefit rate.

Jobless benefits would no longer be extended beyond their normal expiration date for people who are completing vocational training or basic education courses.

Unemployed people who failed to keep their identification

number, user name and password secure could be liable for any benefits obtained by unauthorized persons.

Financial institutions doing business with the state would be required to disclose information about accounts held by people who owe money to the unemployment system.

The state would try to collect overpayments made as a result of administrative errors or computer malfunctions. Officials could sue to freeze bank accounts holding money wrongly paid out.

The Legislature’s Joint Finance Committee on May 13 approved a provision in Gov. Scott Walker’s budget proposal that would make Wisconsin the fourth state in the country to require jobless people to apply for four jobs a week — the current standard is two — to get benefits.


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Steven Verburg is a reporter for the Wisconsin State Journal covering state politics with a focus on science and the environment as well as military and veterans issues.

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