'We have rights': Disabled workers file federal lawsuit against Wisconsin over denial of unemployment benefits

Editor's note: This story has been updated to revise the number of Wisconsinites who receive disability benefits and are also employed.

MADISON - A class action lawsuit is aiming to overturn a state law prohibiting disabled Wisconsinites from accessing unemployment benefits after losing their job.

The lawsuit was filed Tuesday by a group of nine residents who have been denied unemployment benefits since 2015 because they receive Social Security Disability Insurance payments as well. Some of the residents have also been forced to repay benefits given to them by the Department of Workforce Development, which contended the payments were made in error.

Attorneys Victor Forberger and Paul Kinne will represent the group throughout the case.

More than 3,500 disabled Wisconsinites are also employed, Forberger said. About 185,00 people in the state get Social Security Disability Insurance.

"As things stand now, workers who receive Social Security Disability Insurance benefits have been deprived of the right to unemployment compensation benefits, even when those workers lost their jobs through no fault of their own," Kinne said. "The state's interpretation and application of Wisconsin's unemployment compensation eligibility statute is a violation of the Americans with Disabilities Act, the Rehabilitation Act and the due process clause of the 14th Amendment."

Wisconsin's statute regarding unemployment payments for those receiving disability payments dates back to 2013. The first iteration of the law made those receiving disability payments ineligible for state unemployment only during the weeks when they received their monthly disability check. But an update to the law in 2015 made people wholly ineligible for unemployment if they also received disability payments, Forberger said.

Wisconsin and North Carolina are the only two states with the prohibition on unemployment for those who receive disability checks.

At the time, the department estimated the change would only impact about 50 people, but as the years have gone on, it's become clear that it actually impacted thousands of people.

"Essentially, we're taking a very large part of the working population of the state, and saying they are ineligible for unemployment benefits," Forberger said.

Law aimed to prevent 'double-dipping'

When the law was passed, it was to prevent people from "double-dipping" and getting both unemployment and disability payments without working. But residents getting both benefits weren't really doing that, Forberger said, because those recipients actually rely on funds both from disability and from employment.

"That is a complete myth," he said. "They have to work to make ends meet. But now they can't collect unemployment benefits when they lose their jobs, which is how unemployment is supposed to work."

Forberger said those he has spoken with who are getting disability checks get anywhere from $600 to $1,600 a month, which isn't enough money for most.

"Even if you're at the high end, you've got to pay rent, you've got to eat, you've got to pay bills, you've got to pay for your cell phone, and $1,600 isn't going to be enough," he said. "Unless you're living extremely frugally."

'We have rights'

Judy Fintz of La Crosse is one of those named in the class action suit. Fintz has worked at the University of Wisconsin-La Crosse cafeteria for 13 years part-time, and since 2015 has been unable to collect unemployment benefits during the summer months when school isn't in session and she isn't working.

She receives $995 a month in disability payments, which goes toward bills. She also receives $16 in SNAP benefits a month for food during school breaks when she's not working, but it doesn't go far.

"It's very difficult in the summer, because I struggle with money, Fintz said.

Fintz said the other workers in the cafeteria who don't receive disability have no problem accessing their unemployment benefits.

"They shouldn't discriminate (against) us. We have rights, we're human. They should be able to give us unemployment no matter what the disability is," she said. "They've got to be fair and not judge people too much."

Fintz said she's even more worried for the coming months, now that federal unemployment benefits have ended, too. Her boss recently informed her that her hours are going to be reduced further because of COVID-19.

"I might get like 10 hours a week, and it's still not a lot for paying the bills and making ends meet," she said. "It's going to be difficult, you know."

'The money is there'

Forberger is hoping the lawsuit will help to bring relief to those who have been denied unemployment benefits since 2015. The suit is seeking back pay for all claims that have been denied under the statute since it took effect.

"What we want to do is overturn the discrimination that prevented access to regular unemployment," Forberger said. "And for the future, to overturn this discriminatory eligibility ban, so that when you get laid off from your job, you can get unemployment benefits."

Forberger and Kinne have been working on the lawsuit for the last six months, they said, and are first seeking a preliminary injunction from the federal courts to halt Wisconsin's practice of denying disabled Wisconsinites their benefits.

Forberger said if the suit is successful, the Department of Workforce Development would be required to back pay the claims, with the money coming from the taxes collected by the state for unemployment.

"The money is already there, it's already in the trust fund," he said.

Forberger didn't have an estimation of how much money could be owed but said the sum will likely be large.

The department did not return a request for comment Tuesday afternoon.

The lawsuit won't impact any of the payments made by the federal government during the coronavirus pandemic, because those payments have already been made. The suit will only focus on regular benefits denied over the last six years.

The issue caused by the lack of benefits for disabled residents rose to the forefront for Forberger and Kinne at the beginning of the coronavirus pandemic. As thousands of people were laid off and businesses across the state shuttered their doors, those who received disability benefits in Wisconsin were denied even federal benefits like the Pandemic Unemployment Assistance, which was created to get benefits to those who didn't qualify for regular benefits.

Eventually, the state did allow disabled residents to apply for the federal benefits, after Caleb Frostman, the former secretary of the Department of Workforce Development, argued the federal government misunderstood the state's laws.

He said that in Wisconsin, those getting disability benefits are disqualified from getting regular unemployment and therefore should not be excluded from the special pandemic benefits intended to support the self-employed and others outside the scope of regular unemployment benefits.

At that time, the labor department also decided that the amount of federal assistance would not be deducted from disability benefits, either.

Forberger is hoping to see swift action on the case, so people with disabilities aren't forced to go without the income that helps them afford food, rent or bills.

"Before you debate or say anything about this issue, you need to explain how this eligibility ban can exist. Over disabled workers in the state are working every single year," he said. "There's no rational explanation for this ban, other than to discriminate against the disabled."

Social Security Disability Insurance recipients who have questions about the case can call 608-841-2150 for more information.

Laura Schulte can be reached at [email protected] and on Twitter at @SchulteLaura.