Fired workers cost businesses money

MANITOWOC - Thousands of employees are fired from their jobs every year in Wisconsin. Their employers say for good cause.

And a growing number of small business owners are frustrated with the state for paying those workers unemployment benefits. They say that's driving up business costs.

Wisconsin is coming off record unemployment and jobs are still hard to come by for some. FOX 11 News understands the struggle in finding good paying jobs--but this story is not about that. This story offers another view--focusing on the cost of unemployment for small businesses in the state.

Small businesses everywhere are struggling to compete, and owners say they can't afford to pay for employees not willing to work. But when employees are fired--for reasons like not showing up for work without notice--the businesses still end up paying, when the state allows the workers to collect unemployment benefits.

"This is wrong and it's stymieing business in the state of Wisconsin. It is stymieing business for owners," said Lynn Seidl Babcock, who owns HomeCare Health Services and Hospice in Manitowoc with a staff of 140.

Seidl-Babcock has terminated a few employees in the past couple of years. The last one in the file, she says, failed to show up at a client's home numerous times--and was still awarded unemployment benefits by the state.

"Now should someone sit at home and collect a paycheck because they no showed? They didn't call us, they just didn't show up for taking care of an elderly person, who they're supposed to be giving their meds to," explained Seidl-Babcock. "Should that person be collecting an unemployment check?"

Seidl-Babcock blames the system for being too lenient.

State law says a discharged worker is eligible for unemployment benefits unless he or she is discharged for misconduct connected with that employment.

Out of the 700,000 claims submitted last year for unemployment benefits, only 27,000 moved on to an appeals hearing where either the worker or the employer challenged the decision on unemployment benefits.

So we sat in on an appeal hearing to see how it works. In that case representatives of a small business in Madison were contesting the awarding of benefits to one of its fired workers. The company says he failed to follow policy, even received a warning before eventually being fired.

"The burden is on the employer to prove misconduct in this hearing," said Jim Moe, administrative law judge.

Of all the cases that went through the appeal process last year, state officials tell us 55 percent went in favor of the employer with 45 percent won by the fired worker.

While some business owners say they don't bother to challenge the state's decision to pay benefits, there is an incentive for the employer. Every business pays money into an unemployment insurance account. And that tax on the business, a percentage of its taxable wages, goes up when the funds in that account are paid out.

"Anytime there's a decision made to, you know, give benefits--they're going to pay for them," explained Craig Barkelar, administrator of the state's Division of Unemployment Insurance.

Barkelar admits some fired workers who collect the cash don't deserve it.

"Particularly the small business owners, there are some decisions that seem to fly in the face of common sense," said Barkelar.

But he says the administrative law judges likely are not at fault. They are conducting legal proceedings and have to follow the rules of evidence.

"And if an employer fails to provide the appropriate witnesses with firsthand knowledge or the documentation that's needed to prove the case...and if they're not prepared for the hearing, sometimes the decision has to go the other way." said Barkelar.

"It's not really a fair system," said Seidl-Babcock, who's concerns first came to our attention last Fall. That's when she raised her unemployment benefits concern at the Governor's Small Business Summit at Lambeau Field. In a session allowing business owners to raise questions with the way government is run, the room full of fellow business owners seemed to agree with Seidl-Babcock.

"I really feel like something has to give here. Three fourths of the people in this room raised their hand," said Seidl-Babcock.

Walker administration officials indicated they were trying to make the state more small business friendly.

Barkelar says in addition to information on the Department of Workforce Development website, his office is coming up with educational videos to help employers be better prepared at those appeal hearings.

"So they will know how to prepare for these hearings, so they'll have more success in those instances where maybe that person should have been disqualified," said Barkelar.

Small businesses, like all employers, were also hit this year with a new fee in Wisconsin. The $3,000 assessment for Seidl-Babcock will be used to pay interest on money the state borrowed from the federal government to pay off the interest on money it borrow a few years ago to cover