Chamber Supported Bills to Reform Unemployment Agency, Address UI Identity Theft, Clear House

November 13, 2017

Last week, the Michigan House unanimously passed a seven-bill package supported by the Michigan Chamber to address key issues facing Michigan’s 100-percent employer-financed unemployment insurance (UI) program.  While the legislation has many components, it works to address the critical issues that have been plaguing the UI system in recent years, including UI identity theft, or so-called imposter claims. 

From wrongly accusing over 40,000 individuals of UI fraud to the growing problem of identity theft claims to a compromise of their database this past winter, it is overwhelmingly clear that the UI program needs reforms. The Legislature has stepped in and is pursuing balanced, common sense legislation (HBs 5165-5172) to do just that. The bipartisan package passed by the House would:

  • Address UI identity theft – The legislation would mandate the UIA create new firewalls during the claim application process to prevent the fraudulent claims from ever being filed. The legislation would dramatically strengthen the UIA’s identity verification processes and arm the UIA with better information to verify a claimant’s identity, including driver’s license or state identification numbers, I-9 documentation and the employer’s federal ID number. The legislation requires UIA to verify a claimant’s identity before making a payment on the claim. This reform is long overdue. 
  • Protect employers and innocent employees who are victims of identity theft – With the goal of protecting employers and innocent employees who have fraudulent claims filed using their name and social security number, the legislation would prevent benefit payments from being issued to an imposter and would require the UIA to issue a formal determination indicating the claim was fraudulent and, thus, null and void. Specifically, the bill would allow an employer to file a report about the imposter claim to begin a UIA investigation. Alternatively, an affected employee would be able to file an affidavit attesting that he or she did not file the claim and that action would initiate a UIA investigation. If both an employer report and an affected employee affidavit are submitted on the same claim, the UIA would be able to stop all payments and nullify the claim.  All of the interested parties would be required to be kept informed throughout the process.
  • Other miscellaneous changes - Other bills in the package address the assessment of interest on claimants who owe money the UIA, a reduction in the monetary penalties for UI fraud and requirements that employers and claimants keep their addresses up-to-date with the UIA.

The Michigan Chamber and other business, labor and claimant groups are working together to support the legislation. It is our hope that, now that the bills have cleared the House, that the Senate will consider the bills yet this winter.

For more information, contact Wendy Block at wblock@michamber.com.