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House Committee Advances Bill to Make $250M Deposit to Unemployment System, Hold Employers Harmless for Agency’s Mistakes

Advocacy News – January 27, 2022

On Wednesday, the Michigan Chamber testified before the House Appropriations Committee in support of a $250 million deposit into Michigan’s 100 percent employer-financed Unemployment Trust Fund, to hold it harmful for the fraudulent benefits and improper payments the Unemployment Insurance Agency (UIA) made out over the course of the last 18 months. The bill passed Michigan House later that day by a vote of 101-1.

The reports are jaw-dropping: A Deloitte audit, released in December of 2021, found the UIA paid an estimated $8.4 to $8.51 billion in fraudulent and improper unemployment insurance (UI) claims from March 1, 2020, to September 30, 2021. This is money that most likely will never be recouped.

The Deloitte audit found that 97 percent of the fraudulent and improper benefits came from the federal UI program. But it also found that as much as $249 million, or 2.9% of the total estimated fraudulent benefits, were paid with employer-financed benefits (benefits paid out of the UI Trust Fund).

Absent this appropriation, the state’s employers will end up eating the costs of the $249 million in fraudulent and improper state unemployment benefits. The Michigan Chamber has insisted this is unacceptable.

The Michigan Chamber will push for this appropriation to be approved by the Michigan Senate and will continue to advocate for reforms to the system, to ensure there is better oversight of the UIA and controls put in place, to ensure mistakes like these aren’t repeated.

Please contact Wendy Block with questions at wblock@michamber.com.

Advocacy News – January 27, 2022

On Wednesday, the Michigan Chamber testified before the House Appropriations Committee in support of a $250 million deposit into Michigan’s 100 percent employer-financed Unemployment Trust Fund, to hold it harmful for the fraudulent benefits and improper payments the Unemployment Insurance Agency (UIA) made out over the course of the last 18 months. The bill passed Michigan House later that day by a vote of 101-1.

The reports are jaw-dropping: A Deloitte audit, released in December of 2021, found the UIA paid an estimated $8.4 to $8.51 billion in fraudulent and improper unemployment insurance (UI) claims from March 1, 2020, to September 30, 2021. This is money that most likely will never be recouped.

The Deloitte audit found that 97 percent of the fraudulent and improper benefits came from the federal UI program. But it also found that as much as $249 million, or 2.9% of the total estimated fraudulent benefits, were paid with employer-financed benefits (benefits paid out of the UI Trust Fund).

Absent this appropriation, the state’s employers will end up eating the costs of the $249 million in fraudulent and improper state unemployment benefits. The Michigan Chamber has insisted this is unacceptable.

The Michigan Chamber will push for this appropriation to be approved by the Michigan Senate and will continue to advocate for reforms to the system, to ensure there is better oversight of the UIA and controls put in place, to ensure mistakes like these aren’t repeated.

Please contact Wendy Block with questions at wblock@michamber.com.