Unemployment Insurance Reform Legislation Signed By Governor

March 28, 2011

Governor Snyder, on Monday, March 28, signed a significant unemployment insurance (UI)  reform bill in Lansing.  It marks one of the biggest UI reforms Michigan has seen in decades and will save job providers, who fund the UI system, nearly $1 billion over three years. 

The Michigan Chamber played a leadership role in passing this legislation (HB 4408, Rep. Stamas) but it couldn’t have happened without the help of the Senate Majority Leader, House Speaker or Governor and the 24 Senators and the 65 House members voting for the bill.  We cannot thank them enough for their vision and leadership on this complicated issue. 

HB 4408 is a win-win for job providers hoping to create jobs and individuals struggling to find work because it:

  • Reduces state weekly benefit duration from 26 to 20 weeks for new claimants beginning in January of 2012. This change is expected to produce $300 million in annual savings.
  • Requires the Unemployment Insurance Agency (UIA) to more aggressively pursue fraud and abuse in the UI system, which totaled over $143 million in 2009 alone. This change is expected to save $50-80 million in the first year.
  • Fulfills a promise made by Congress to allow displaced workers to continue receiving weeks 79 to 99 of benefits through December 2011.

UI reform is a top legislative priority for the Michigan Chamber during the 2011-12 legislative session.  And although this bill was a significant victory, there is more work to be done to solve the state’s current UI crisis, mainly that Michigan’s UI Trust Fund has borrowed more than $3.9 billion from the federal government to continue paying benefits and people are still struggling to find work. 

Without further reforms, which the Michigan Chamber will be pursuing in the months ahead, Michigan’s businesses’ total additional tax burden will automatically increase by as much as $240 million in 2011 and increase progressively over the next decade to repay the federal debt plus interest.  We must thank and congratulate lawmakers for passage of HB 4408 but stay focused on the prize of doing more to reform the system, which will ultimately help struggling job providers and put Michigan citizens back to work.

Please contact Wendy Block if you have any questions at wblock@michamber.com or 517/371-7678.