Wasserbahn employees denied unemployment after sudden closure of hotel and waterpark

Published: Mar. 24, 2022 at 4:48 PM CDT
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CEDAR RAPIDS, Iowa (KCRG) -Employees left hanging with the sudden closure of Wasserbahn say they are now being denied unemployment. The hotel and waterpark closed permanently on March 1st catching staff off guard, including some who live in the hotel.

When the hotel closed some of the workers applied for unemployment to try and make ends meet, but they were sent denial letters.

”I applied I believe it was the second week of March for it and about a week later I was sent a letter saying that I was denied,” said Ruth Wheeler, who still lives at the hotel with her two sons.

Wheeler’s letter explained she was denied because the ‘employer’s business did not permanently close, it actually was sold to a new owner.’

That’s despite multiple news reports the first week of the closure, and the hotel now advertising an auction online, which state the ‘owners have closed this entire facility and are moving fast to liquidate all of the assets.’

“We’re just begging, pleading, screaming for help from people and no one is helping us,” Wheeler told TV9.

Another employee who received the same letter as Wheeler says he eventually did get approved.

”I had to call into Workforce and be a little stern with them I guess and then finally once they opened the file up and started digging a little bit they saw all the red flags,” John George explained.

Other workers said they were denied because Wasserbahn had not reported paying them to the state.

“I was told when I was on the phone with workforce that he only had 5 people listed as employees. And we I know when the doors were shut we were approximately 50,” said George.

To top it off, staff say they’ve still not received their final paychecks, all while their former boss Thomas Smock has filed for a new business down in Florida.

“He’s down in Florida with his new bar open and we’re sitting here stranded, strapped,” Wheeler said.

We tried multiple ways to contact Smock between Wednesday and Thursday, he did not answer any of them.

We asked Iowa Workforce Development about the situation and they sent us this statement: “IWD cannot comment on individual cases. In general, workplaces are required to accurately report the wages they pay and to pay unemployment tax on those wages. If an unemployment claimant believes that a former employer has not followed these rules, he or she is encouraged to contact IWD. Additionally, any unemployment claimant that believes his or her place of business has permanently closed is encouraged to share that fact with IWD so we can investigate to determine the status of the business. This determination usually is based on a detailed tax investigation that may include reviewing employer records, visiting business, gathering information from former employees and reviewing financial records to determine whether a sale occurred.

The above factors are some of the many things taken into consideration when determining what benefits are available to an unemployment claimant. Once that availability has been determined, claimants are provided a notice that lists the benefits they are eligible for based on current information. This notice also contains information about the possibility of an appeal if the claimant believes any information is incorrect. In some cases, investigations into wages or business status can take additional time to ensure a thorough review takes place. Each claim is unique and is processed according to the particular facts and circumstances of that situation. IWD is here to help claimants and encourages anyone to contact UI customer service at 1-866-239-0843 or uiclaimshelp@iwd.iowa.gov for any assistance.”

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