Michigan House Approves Unemployment Insurance Reform

by Scott McClallen


The Michigan House approved a range of bills that aim to reform the embattled Unemployment Insurance Agency (UIA) that has mishandled at least $8.5 billion since March 2020.

When the UIA acknowledged losing $4 billion of taxpayer money, it admitted: “mistakes were made.”

The bills follow after Gov. Gretchen Whitmer shuttered most of the economy in 2020 apparently to slow the spread of COVID. In spring 2020, fraudsters and real claimants thrown out of work filed a peak of over 388,000 claims in one week – 77 times more than an average pre-pandemic week – overwhelming the system. The UIA approved most of the claims, including many fraudulent ones – including one identified him- or herself as “Kimberly Kardashian” – despite some real applicants who qualified for benefits but spent months without answers from the UIA.

Rep. Julie Alexander, R-Hanover, said the reform should help Michiganders.

“Since the start of the COVID-19 pandemic, many Jackson families have contacted my office with the same message: The unemployment agency is slow, unresponsive and chaotic,” Alexander said in a statement.

  • HB 5555 aims to create an unemployment insurance advocate with authority to oversee and investigate the UIA.
  • HB 5528 aims to prohibit the UIA from charging an improperly paid benefit to an employer’s account or certain funds.
  • HB 5549 aims to require a quarterly report by the UIA to the advocate’s office regarding appeals made by claimants and employers to an administrative law judge and appeals by the UIA to the Unemployment Insurance Appeals Commission.
  • HB 5550 aims to require the UIA to post monthly the amount of money in the Unemployment Compensation Fund and notify the state budget director and legislative appropriations committees if the amount drops below certain levels.
  • HB 5551 aims to shorten, from three years to one, the UIA’s claim determination time frame to issue restitution for wrongly-given benefits and stop the UIA from clawing back benefits unless the UIA provides the claimant with notice of certain rights.
  • HB 5553 aims to require a claim determination within 15 calendar days (or within 20 calendar days if the claim was received during a difficult period).
  • HB 5554 aims to require the UIA to provide certain items relevant to a hearing before an administrative law judge and require the administrative law judge to give those items to interested parties when providing notice of the hearing.

Additional legislation would correct UIA-caused mistakes that left Michiganders footing the bill.

HBs 5265 and 5528 would ensure that nearly 700,000 Michiganders wrongly paid Pandemic Unemployment Assistance (PUA) because of a UIA mistake are not required to return benefits.

HB 5525 would spend $250 million federal COVID funds into Michigan’s unemployment trust fund to ensure Michigan job providers aren’t forced to pay for billions of benefits fraud.

House Appropriations Chair Rep. Thomas Albert, R-Lowell, welcomed the plan.

“Many businesses are still struggling to survive the pandemic. First it was shutdown orders, and now it’s runaway inflation, labor shortages, changing customer behavior and a host of other challenges,” Albert said in a statement. “The least we can do to help our businesses get back on their feet is make sure they aren’t asked to pay for the massive fraud allowed by the UIA.”

The state’s unemployment trust fund had $4.6 billion before the pandemic but is now below $1 billion. The $250 million injected into the unemployment fund would pile into an additional $150 million investment recently signed into state law.

The bills advance to the Senate for further consideration.

– – –

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
Photo “Michigan Unemployment Insurance Agency” by Scott McClallen.




Related posts