Legislation Introduced to Clean Up Unemployment Insurance Processes at Urging of MI Chamber

October 23, 2017

For years, the unemployment insurance agency (UIA) has been plagued with problems. From wrongly accusing over 40,000 individuals of unemployment insurance (UI) fraud to the growing problem of identity theft claims to a compromise of their database this past winter, no one can deny the UIA is facing many challenges and needs to clean up its act. 

The Michigan Chamber is supporting legislation (HBs 5165-5172) to do just that. The bipartisan package of bills introduced last week 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 and labor groups participated in a press conference in support of the package last week. It is our hope that the House will begin considering the bills as early as this week. 

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