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Immediate Action Required for Employers Seeking Relief From Unemployment Insurance Benefits Charged to Their Accounts Due to COVID-19

Labor & Employment Alert Sean M. Scullen, Tyler Roth

Unemployment insurance form and clipboard on a desk.

The Wisconsin Department of Workforce Development (“DWD”) has announced that employers may qualify for relief from COVID-19-related unemployment insurance (“UI”) benefits that were charged to their accounts between May 17, 2020 to June 30, 2020, but they must act fast due to filing deadlines.

Relief Qualifications and Deadlines
Employers must complete and submit form UCB-18823-E to the DWD to obtain relief from UI benefit charges that resulted from employees who were laid off, had their work hours reduced, or were enrolled in a Work Share Plan due to the public health emergency declared by Executive Order #72, and filed their initial unemployment claims for weeks after May 16, 2020.

The DWD generally requires employers to submit the form within 30 days after an initial claim is filed, but has advised that the deadline to submit the form for initial claims filed from May 17, 2020 to June 30, 2020 is August 15, 2020. The DWD’s specific filing instructions are available here.

Affirmation of COVID-19-Related UI Claims Now Required
Earlier this year, the Wisconsin Legislature enacted Act 185 to ensure that unemployment benefits paid as a result of COVID-19 would not be charged to an employer’s UI account. The DWD will automatically assume that any initial claims filed after the issuance of Executive Order #72 (March 12, 2020) and before May 16, 2020 are the result of COVID-19, and that employer accounts will not be charged for those resulting UI benefits. While not well-publicized, the DWD has since announced that as a condition of obtaining such relief from UI benefit charges for initial claims filed between May 17 and June 30, employers must complete and submit form UCB-18823-E affirmatively stating that such claims were related to COVID-19.

Both “contribution” and “reimbursable” employers are required to submit form UCB-18823-E. According to the DWD’s FAQs, if employees of a contribution employer were laid off after May 16, 2020, and filed initial claims for weeks after May 16, 2020, the employer may qualify for relief from UI benefit charging. For reimbursable employers, half of the benefits for COVID-19-related initial claims during the period March 15, 2020 through December 26, 2020 will be charged to the DWD’s interest and penalty account. Reimbursable employers will receive federal reimbursement for the remaining half after the employers pay those amounts to the DWD.

Example: Employees of a reimbursable employer receive $3,000 of benefits for initial claims related to Executive Order #72 in April 2020. Fifteen hundred dollars will be charged to the interest and penalty account, so the employer is not required to pay for those benefits. The employer must pay $1,500 to the DWD. After payment is made, the reimbursable employer can request relief of the remaining amount ($1,500 in this example) by submitting form UCB-18823-E.

The DWD anticipates that the charging relief will take many months to complete for all employers. The DWD has therefore issued an emergency rule to ensure that UI benefit charges and adjustments for March 15, 2020, through June 30, 2020 will not affect employer contribution rates for 2021, even if the charging relief is not processed for each employer’s account.

More information about relief from benefit charges can be found here.

If you have any questions about the unemployment filing requirements or related issues, please contact your local Quarles & Brady attorney or:

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