Perry & Associates, LLC v. Illinois Department of Employment Security
72 N.E.3d 754
| Ill. App. Ct. | 2017Background
- Perry & Associates (employer) fired employee Clarence Passons in Nov 2011; Passons filed for unemployment benefits and the employer contested for misconduct.
- A referee initially found Passons ineligible (Dec 2012), leading the Department to set Perry’s 2013 contribution rate at the minimum (0.55%) because benefit charges had been cancelled.
- The Board of Review reversed the referee (Apr 2013), reinstating Passons’s benefits; the Department added the benefit charges back to Perry’s account and retroactively raised Perry’s 2013 rate to 2.85%.
- Perry protested the revised rate and administrative hearings followed; the Director affirmed the upward revision and the assessment of interest for unpaid additional contributions.
- Circuit court affirmed the Director; this appeal challenges the Department’s authority to revise a calendar-year contribution rate retroactively, the imposition of interest, and the Director’s refusal to reconsider benefit-charge calculations in the rate proceeding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to revise contribution rate midyear | Section 1509 makes mailed rate "final and conclusive" and bars Department from revising rate after notice | Winakor allows Director to revoke/revise rate; rate not conclusively binding on Director | Department may revise rate when circumstances change; section 1509 does not bind Director |
| Applicability of Marco v. Doherty | Marco limits Director's ability to retroactively change a final adjudicated decision | Marco is distinguishable; it addressed revisions to a Director’s final adjudicatory decision, not administrative rate assignments like here | Marco inapplicable; Winakor governs this context and permits revision when not a final adjudicatory determination |
| Interest on retroactive additional contributions | Interest on retroactive amounts is unconstitutional or improper because revision is retroactive | Illinois regs and Northern Trust permit interest accruing from date contributions were originally due; employer could avoid interest by timely paying under protest | Interest assessment is proper; employer could have avoided interest by paying additional contributions within 30 days under protest |
| Challenge to benefit-charge computation in rate proceeding | Director should have considered employer’s claim that claimant had other income reducing benefits and charges | Section 1509 bars challenging benefit-charge amounts in a rate dispute if employer was served the statement; benefit-charge disputes belong in a benefit action | Director correctly barred challenge to benefit charges in the rate proceeding; employer must litigate benefit amounts in the benefits forum |
Key Cases Cited
- Winakor v. Annunzio, 409 Ill. 236 (1951) (rate notice language "final and conclusive" does not bind the Director; Director may revoke rate where statute does not expressly limit agency)
- Northern Trust Co. v. Bernardi, 115 Ill. 2d 354 (1987) (interest accrues from date contributions were due; accrual on deficiencies is proper)
- Marco v. Doherty, 276 Ill. App. 3d 121 (1995) (Director may not retroactively change a prior final adjudicatory decision; limited to circumstances where rate was set as result of an adjudicatory hearing)