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Improvements to the Unemployment System on the Move as Auditor General Reveals State Improperly Paid Out $3.9 Billion

Advocacy News – December 2, 2021

On the heels of a November Michigan Auditor General report revealing Michigan’s Unemployment Insurance Agency (UIA) improperly paid $3.9 billion in benefits to 347,000 claimants now classified as ineligible, the Michigan Chamber is supporting several bills introduced in the Michigan House to address the problem and countless other issues that have come to light over the course of the pandemic.

The Auditor General report specifies “[t]he improper payments were UIA’s fault and not that of the claimants.”

Earlier today, the House Oversight and House Workforce, Trades and Talent committees took testimony on sweeping legislation to ensure that Michigan employers, who normally pay 100 percent of the cost of the unemployment (UI) system, are not held liable for the cost of the state’s errors related to the $3.9 billion in improper payments. The bills also seek to improve work search requirements and improve service to unemployed individuals.

There are many bills in the package that are well-intentioned but require additional conversations and work.  Currently, the Chamber supports the following bills under consideration:

Prohibit the State from Passing Along the Cost of Improper and Fraudulent Claims to Employers – House Bill (HB) 5528 would prohibit the state from charging the cost of improper and fraudulent benefits to the Unemployment Trust Fund, the 100 percent employer-financed fund that pays benefits to claimants.  As demonstrated by the Auditor General’s report, the state has made many serious mistakes and errors in handling claims during the pandemic and employers should not be held financially liable for these mistakes.

Revamp Work Search Requirmenets – HB 5179 and HB 5180 would modify Work Search requirements for unemployed individuals to ensure there is an open the line of communication with employer, the UIA and local MI Works! agencies. The bills would codify and modify UIA rules to ensure the statute is clear about what is required of claimants.  The bills would require individuals to take certain work search or training steps at least three times a week and to report to a Michigan Works! agency weekly in order to be considered actively engaged in seeking work. Work search activities could include:  applying for a job, interviewing for a job, enrolling or participating in a workforce development program, enrolling or participating in a program that assists the individual in obtaining a high school diploma or high school equivalency certificate or obtaining professional assistance to create or update the individual’s resume. In each report submitted to the Michigan Works! agency, the individual would have to include the name and contact information of the employer to which the individual applied, the date the individual submitted the job application, a copy of the application, the date of the job interview and other specified information regarding program participation and assistance received. To be eligible for unemployment benefits, an individual would have to register for work with a Michigan Works! agency within 21 days after applying for benefits. The bill also would allow an employer to notify the UIA that a claimant refused suitable work with the employer or of a job opening with the employer.

Trust Fund Transparency – HB 5550 would require the UIA to post the balance of the Unemployment Trust Fund (“Trust Fund”), the employer-financed fund that pays benefits to claimants, to post the balance of the fund on its public website.  During the pandemic, the state paid out over $4 billion in benefits and has teetered on the edge of bankruptcy over the last 18 months.  Often, getting a status update from the UIA on the fund’s balance has been difficult.  This legislation would ensure that employers and other taxpayers have open access to information about the Trust Fund balance.

The committee hearings this week were testimony only. We expect hearings to continue later this month or in early January.

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

Advocacy News – December 2, 2021

On the heels of a November Michigan Auditor General report revealing Michigan’s Unemployment Insurance Agency (UIA) improperly paid $3.9 billion in benefits to 347,000 claimants now classified as ineligible, the Michigan Chamber is supporting several bills introduced in the Michigan House to address the problem and countless other issues that have come to light over the course of the pandemic.

The Auditor General report specifies “[t]he improper payments were UIA’s fault and not that of the claimants.”

Earlier today, the House Oversight and House Workforce, Trades and Talent committees took testimony on sweeping legislation to ensure that Michigan employers, who normally pay 100 percent of the cost of the unemployment (UI) system, are not held liable for the cost of the state’s errors related to the $3.9 billion in improper payments. The bills also seek to improve work search requirements and improve service to unemployed individuals.

There are many bills in the package that are well-intentioned but require additional conversations and work.  Currently, the Chamber supports the following bills under consideration:

Prohibit the State from Passing Along the Cost of Improper and Fraudulent Claims to Employers – House Bill (HB) 5528 would prohibit the state from charging the cost of improper and fraudulent benefits to the Unemployment Trust Fund, the 100 percent employer-financed fund that pays benefits to claimants.  As demonstrated by the Auditor General’s report, the state has made many serious mistakes and errors in handling claims during the pandemic and employers should not be held financially liable for these mistakes.

Revamp Work Search Requirmenets – HB 5179 and HB 5180 would modify Work Search requirements for unemployed individuals to ensure there is an open the line of communication with employer, the UIA and local MI Works! agencies. The bills would codify and modify UIA rules to ensure the statute is clear about what is required of claimants.  The bills would require individuals to take certain work search or training steps at least three times a week and to report to a Michigan Works! agency weekly in order to be considered actively engaged in seeking work. Work search activities could include:  applying for a job, interviewing for a job, enrolling or participating in a workforce development program, enrolling or participating in a program that assists the individual in obtaining a high school diploma or high school equivalency certificate or obtaining professional assistance to create or update the individual’s resume. In each report submitted to the Michigan Works! agency, the individual would have to include the name and contact information of the employer to which the individual applied, the date the individual submitted the job application, a copy of the application, the date of the job interview and other specified information regarding program participation and assistance received. To be eligible for unemployment benefits, an individual would have to register for work with a Michigan Works! agency within 21 days after applying for benefits. The bill also would allow an employer to notify the UIA that a claimant refused suitable work with the employer or of a job opening with the employer.

Trust Fund Transparency – HB 5550 would require the UIA to post the balance of the Unemployment Trust Fund (“Trust Fund”), the employer-financed fund that pays benefits to claimants, to post the balance of the fund on its public website.  During the pandemic, the state paid out over $4 billion in benefits and has teetered on the edge of bankruptcy over the last 18 months.  Often, getting a status update from the UIA on the fund’s balance has been difficult.  This legislation would ensure that employers and other taxpayers have open access to information about the Trust Fund balance.

The committee hearings this week were testimony only. We expect hearings to continue later this month or in early January.

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