Wisconsin Department of Workforce Development's secretary designee, Amy Pechacek, right, with Gov. Tony Evers at a 2023 DWD event held at the Plumbers Local 75 training center in Madison. Pechacek held a news conference online Thursday where she spoke about the impact of the federal government shutdown on DWD and the state. (Photo courtesy of DWD)

As the federal shutdown drags on, Wisconsin is likely to feel the impact — in employment, in agriculture and in the safety net for workers, according to the state’s labor secretary.

“Right now, we have the ability to continue to operate and our goal is to not disrupt our current workforce programs or state workforce,” said Amy Pechacek, secretary of the Wisconsin Department of Workforce Development, during an online news conference Thursday.

Governments in some other states have started to reduce their workforces, Pechacek said. Wisconsin is holding off on filling vacancies and taking other steps “to try and preserve all of the funding we can so that we don’t have programmatic or employment disruptions,” Pechacek said.

Nevertheless, 75% of the DWD’s $500 million annual budget — three out of every four dollars — comes from the federal government, she said.

The remaining 25% that comes from the state isn’t “just one big pot,” Pechacek added, but funds specific programs. For example, the state workers compensation program, which covers treatment costs and lost income for people injured on the job, is entirely state funded. That includes the cost of administering the program.

But job support services — local job centers, career counseling, unemployment insurance administration, state apprenticeship programs, and the division of vocational rehabilitation for people with disabilities — are “all tied to federally funded programs,” Pechacek said.

“We need the federal government to come together, come up with a funding mechanism and continue to support their obligations to all the states and to all the people to ensure that we can move forward with the economic health and prosperity that we have enjoyed without this chaotic massive interruption,” she said. “The longer this goes, the continued adverse and exponentially worse impacts to our workforce will compound.”

Pechacek’s virtual news conference Thursday took the place of DWD’s monthly report on Wisconsin employment data. The usual reports draw on the federal Bureau of Labor Statistics surveys that poll employers on the number of jobs they have and poll households to calculate the unemployment rate.

The data BLS compiles and analyzes is one of the casualties of the shutdown, Pechacek said, hampering employers, job seekers, nonprofits, economic development agencies and governments.

All of them rely on BLS data “to guide fiscal decision making, determine whether to open or expand their businesses, determine if they’re going to hire or lay off, figure out how to allocate resources, and understand really how best to train their current workforce,” Pechacek said. Without that information, “employers are putting off important decisions, essentially fumbling around in the dark until Congress can get around to turning back the lights on.”

Unemployment claims can serve as one indicator, and Scott Hodek, section chief in the DWD Office of Economic Advisors, said the department is looking at other data sources to fill in some of the missing information. Those sources include various private sector organizations as well as the regional federal reserve banks.

“But really it’s pretty difficult to get an accurate picture of what’s happening,” Hodek said. “It will get more difficult as time goes on.”

Another federal report on inflation is expected to be released soon, even with the shutdown, because the findings are used to calculate annual cost-of-living increases for Social Security recipients, Hodek said.

That report will also figure into the deliberations of the Federal Reserve’s Open Market Committee when it meets at the end of October to decide whether to cut interest rates. The Fed’s dual mission includes keeping inflation as close to 2% as possible while encouraging maximum employment.

“That becomes very difficult to do if you don’t have any of that data to make those decisions,” Hodek said.

Looking at the coming months, Pechacek said, the process of applying for H-2A agriculture visas is on hold. The visas enable about 3,000 migrant workers to come in annually to work in specific seasonal agricultural operations, including planting, harvesting and food processing, she said.

DWD is required to verify that there is a worker shortage in the occupations to be covered, and the U.S. Department of Labor must certify the state’s verification report before the federal government issues the visas, she said, but the federal certification of the state’s report is on hold because of the shutdown.

December and January are the months when the most requests come in for H-2A visas, Pechacek said, so if the shutdown continues for too long, the agricultural employers depending on those workers would be unable to get the needed certification.

Pechacek said the department is also watching to see how many federal employees file for unemployment insurance.

There are about 18,000 federal employees in Wisconsin, and DWD has estimated that 8,000 might be affected by the shutdown. By comparison, she said, one of the largest layoffs in Wisconsin took place in 2018 when a larger retailer shut down, laying off 2,200 employees.

So far, however, there have been just 30 initial claims from federal workers, Pechacek said.

If federal workers who file unemployment claims get back pay when they return to work, however, they’ll have to repay the unemployment insurance fund.

Pechacek noted that President Donald Trump has threatened to permanently fire federal workers in the shutdown as well as to withhold back pay for furloughed federal workers who return to work. Between uncertainty about those threats and court rulings that have blocked some mass federal layoffs, however, “it is really an ongoing situation,” she added.

Pechacek several times criticized Trump and the Republican leaders in Congress for the shutdown.

“The president and congressional Republicans have shut down our nation’s government trying to force massive health care cuts and cost increases to the nation’s working and middle class families and we are in a stalemate,” she said.

“We really need our federal government to return to work so they can restore some predictability and reliability to our economy and continue to be the partner that we need to ensure the economic health and prosperity of Wisconsin workers.”

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The offices of the Wisconsin Department of Workforce Development, in Madison. The department administers the state unemployment insurance program. (Wisconsin Examiner photo)

A change to unemployment compensation that would penalize people who receive federal disability payments has made it into a draft bill to revise Wisconsin’s unemployment insurance law — despite vocal opposition from Democrats in the state Legislature.

For people who receive Social Security Disability Insurance (SSDI) income, the change would sharply reduce their jobless pay if they lose work. For many, it could wipe out their unemployment compensation entirely, according to Victor Forberger, a veteran unemployment insurance lawyer.

The SSDI provision is part of the agreed-upon draft legislation that was approved Wednesday by the Unemployment Insurance Advisory Council.

The council includes an equal number of management and labor representatives and was established in 1932 to give labor and management an equal voice in shaping the state’s unemployment insurance (UI) program. The council’s members negotiate and draft changes to the state’s UI laws every two years.

On Wednesday Forberger called the council’s 2025 draft bill “a terrible deal for workers.”

Less than a week ago, the Department of Workforce Development (DWD) walked back an earlier proposal to penalize SSDI recipients who apply for jobless pay. The return of a similar provision in the draft bill caught critics by surprise.

“I was pretty shocked when I heard about it this morning,” said state Rep. Christine Sinicki (D-Milwaukee), a vocal critic of the earlier proposal. “I thought it was put to rest.”

The SSDI unemployment pay ban

Since 2013, under a law enacted in then-Gov. Scott Walker’s first term, people who receive SSDI income are automatically disqualified from collecting unemployment insurance — despite the fact that many SSDI recipients hold part-time jobs and would otherwise qualify for jobless pay if they get laid off.

In July 2024 a federal judge ruled that 2013 law violated two federal laws: the Americans with Disabilities Act and the Rehabilitation Act. The ruling came in a lawsuit that a team of lawyers including Forberger filed on behalf of SSDI recipients who were denied unemployment compensation when they were thrown out of work.

This summer, the judge, William Conley, ordered DWD to stop disqualifying unemployment compensation applications simply because an applicant also receives SSDI.

In August, Conley ordered the department to reconsider the applications of people denied UI because of the ban since 2015 and to award them the jobless pay they would have qualified for without the ban. Conley also ordered DWD to repay applicants who had originally received jobless pay, then had it clawed back after the department belatedly found that they were also SSDI recipients.

Also in August, the joint labor-management advisory committee reviewed a dozen proposed changes in state unemployment insurance law requested by DWD.

One of those proposals was to repeal the 2013 state ban on unemployment pay for people on SSDI. The memo noted the court’s ruling invalidating the ban.

But that proposal also called for offsetting an SSDI recipient’s weekly unemployment pay by the weekly value of the SSDI income. The memo acknowledged that the proposal would probably eliminate unemployment compensation for most SSDI recipients who applied.

“In 2024, the average SSDI payment in Wisconsin was $1,500 per month,” the DWD proposal memo stated. “The average weekly SSDI payment for UI purposes is calculated at $346.20 per week. This weekly amount will in many cases fully reduce the UI benefit a SSDI recipient can receive.”

The memo concluded, “In summary, most SSDI claimants will not be able to receive UI benefits. While some may be able to receive UI benefits, it is expected that the weekly UI payment would be small.”

Offset proposal walked back — then returns

The proposal sparked backlash from Forberger and Democratic lawmakers. On Sept. 18, DWD submitted an amended version of the proposal to the advisory council.

The revision removed the offset provision entirely and called for simply repealing the ban on jobless pay for SSDI recipients.

The department noted in its amendment memo that the process of paying past unemployment insurance applicants under the court order had begun, and that those payments were being made without a deduction for SSDI income.

“The Department is amending its proposal to repeal the SSDI disqualification provision and remove the offset provision,” the Sept. 18 memo stated. “This will align with the effect of the court’s order that is now allowing claimants who receive SSDI to be eligible for the full amount of their weekly benefit without a reduction for any SSDI received.”

At the Unemployment Insurance Advisory Council’s meeting on Wednesday morning, the body approved a draft bill for updates to Wisconsin’s UI law on a unanimous vote.

The draft includes a repeal of the SSDI unemployment compensation ban. Despite DWD’s Sept. 18 memo, however, the draft includes language that claws back some of an SSDI recipient’s jobless pay.

“If a monthly social security disability insurance payment is issued to a claimant, the department shall reduce benefits otherwise payable to the claimant for a given week by one-half of the amount [of a] security disability insurance payment that is allocated for that week,” the draft bill states.

While the offset in the draft bill is half what the original DWD proposal called for, Forberger said Wednesday that even the 50% offset would likely mean no unemployment pay for many SSDI recipients.

Sinicki and state Sen. Kristin Dassler-Alfheim (D-Appleton) introduced a bill of their own earlier this month to repeal the ban.

“Receiving SSDI should not prevent working Wisconsinites from receiving unemployment insurance if they’re laid off,” Dassler-Alfheim told the Wisconsin Examiner on Wednesday. “That’s why Rep. Sinicki and I have proposed legislation to remove that ban from state statute, and I’m really hoping that we can see it across the finish line and put this problem to rest once and for all.”

The draft bill is the product of provisions worked out by each caucus — management and labor — in separate closed sessions. The Wisconsin Examiner contacted two senior representatives in the labor caucus of the council for comment Wednesday on the process, but received no response.

“I’m looking forward to finding out how this language got in there,” Sinicki told the Wisconsin Examiner Wednesday afternoon.

“If that language is in there, it is in violation of the Americans with Disabilities Act and you know the courts have already said that. I’ve already said that,” Sinicki said. “And now they’re just going to end up right back in court with this. It makes no sense to me.”

Sinicki has long championed the advisory councils for unemployment insurance as well as for workers comp for negotiating legislation that represents the interests of both labor and management. She’s often chided Republican lawmakers who have authored and passed bills affecting either of those systems without going through the councils.

This time, “I’m struggling with it — I’ll be honest — because it is the agreed-upon bill,” Sinicki said of the unemployment insurance draft. “But first of all, as a Democrat and as somebody who prides herself in the fact that we take care of our most needy, I can’t vote for this.”

Sinicki said the legislation after it’s introduced is subject to being amended like any other bill, and that she would expect an amendment removing the offset proposal.

By tradition, the bill that comes from the advisory council is introduced under the names of the committee chair and the minority party ranking member on the Assembly’s labor committee — which is Sinicki.

Unless the draft is changed, however, “I will not be putting my name on this bill,” she said.

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Unemployment benefits application (photo by Getty Images)

The state labor department has backed away from its controversial proposal to change state unemployment insurance law that critics say would have perpetuated discrimination against people with disabilities.

A newly amended proposal from the state Department of Workforce Development (DWD) calls for repealing Wisconsin’s ban on jobless pay for people who receive Social Security Disability Insurance (SSDI) income.

The proposal follows a federal court ruling that found the ban violates two federal laws protecting people with disabilities.

Until this week, however, DWD’s proposal to repeal the ban included an additional provision: While a person receiving SSDI payments would be eligible for unemployment insurance after losing a job, disability income would “offset” — cancel out — some or all of the individual’s unemployment compensation.

The SSDI proposal was one of a dozen changes to the state’s unemployment insurance law that DWD submitted to the joint labor-management Unemployment Insurance Advisory Council earlier this year. The council, a long-standing body with equal representation from business and labor, negotiates changes to the state’s unemployment insurance laws every two years.

On Thursday, DWD submitted an amended version of its SSDI proposal. The new version repeals the ban on jobless pay for SSDI recipients and omits the offset provision.

“This is wonderful news for everyone involved and for the state of Wisconsin in general, disabled or non-disabled,” said lawyer Victor Forberger.

Forberger has specialized in representing people whose unemployment insurance claims have been rejected. He was one of the lawyers who sued DWD in federal court in 2021 to overturn the state law banning jobless pay for SSDI recipients.

Jobless pay ban violates federal law

U.S. District Judge William Conley ruled in July 2024 that the jobless pay ban violated the Americans with Disabilities Act and the Rehabilitation Act.

Even after that ruling, DWD continued to deny unemployment claims made by people on SSDI. This July 14, Conley ordered DWD to stop disqualifying SSDI recipients from unemployment compensation.

In August, the judge ordered DWD to pay jobless benefits to eligible applicants who were denied because they received SSDI payments between Sept. 7, 2015 — when the SSDI-unemployment ban law was last revised — and July 30, 2025. Conley also ordered DWD to pay back people who had collected jobless pay but then ordered to pay back the money because they were on SSDI.

The federal Social Security Administration program allows and encourages disability insurance recipients to work part-time if they are able to.

During the administration of Gov. Scott Walker, however, DWD asserted in a  proposal that disability payment recipients who applied for unemployment insurance were probably “double-dipping” and committing “fraud.” The ban on unemployment pay for SSDI recipients was enacted in 2013, during Walker’s first term, and revised in 2015 during his second term.

DWD proposes unemployment insurance changes

Earlier this year DWD drafted 12 proposed revisions to Wisconsin’s unemployment insurance law for the joint labor-management Unemployment Insurance Advisory Council to consider.

The department’s SSDI proposal called for repealing the ban on jobless pay, but also called for offsetting an SSDI recipient’s unemployment compensation on the basis of the disability income.

When Forberger read the DWD proposal and saw the offset provision, he wrote about it on his blog about unemployment insurance policy and wrote to the labor caucus members of the advisory council urging them not to support it.

The offset provision was still part of DWD’s SSDI repeal recommendation when the department presented its proposals to the advisory council in August.

The offset provision surprised state Rep. Christine Sinicki (D-Milwaukee) when it came to her attention. Sinicki has often scolded lawmakers when they introduce bills to change the unemployment compensation system without sending them through the joint labor-management council.

“I’ve always been a stickler for, you vote yes on the agreed-upon bill [from the advisory council] because it was a compromise between both parties,” Sinicki told the Wisconsin Examiner on Thursday. But when she learned of the offset provision, “I made it very clear that I would not vote for any bill that had that in there.”

Sinicki along with Sen. Kristin Dassler-Alfheim (D-Appleton) have authored their own proposal to repeal the SSDI jobless pay ban after the court ordered DWD to stop enforcing it. Both said they opposed DWD’s offset proposal and that they were glad to see that the department scrapped it Thursday.

‘Discrimination. Full stop.’

“What’s happening right now is discrimination. Full stop,” Dassler-Alfheim said in a written statement to the Wisconsin Examiner. “That’s why the federal judge ruled against it, that’s why Representative Sinicki and I have proposed legislation to remove it from state statute, and I’m glad to see that DWD has put forth this amendment” removing the offset.

Three proposed budgets from Gov. Tony Evers included recommendations to end the SSDI jobless pay ban, but with an offset provision as well. Those largely went unnoticed at the time, and were removed along with hundreds of other Evers proposals by the Republican leaders of the Joint Finance Committee during budget deliberations.

It wasn’t clear Thursday what prompted DWD to remove the offset provision from its latest proposal. The department memo to the joint advisory council said that it was already complying with Conley’s order to process benefit claims for SSDI recipients and would do so for previously-denied claims without an offset.

Amending its proposed change in the law to remove the offset provision “will align with the effect of the court’s order that is now allowing claimants who receive SSDI to be eligible for the full amount of their weekly benefit without a reduction for any SSDI received,” the memo states.

Sinicki said that while she was outspoken about her opposition to the offset provision, she had not directly communicated that either to DWD or to members of the advisory council.

A spokesperson for Dassler-Alfheim said she also had not been in direct contact with DWD or the Evers administration about her opposition to the offset.