Advocacy News – April 8, 2025
What’s new: Two new state laws aimed at substantially increase unemployment insurance (UI) benefits – and increase costs on employers who fund 100% of the cost of the UI system – took effect April 2.
The big picture: The new state laws (SB 40 and HB 5827), which were signed by the Governor in December:
- Expand the maximum number of weeks claimants can collect benefits from 20 to 26 weeks.
- Increase the maximum weekly benefit rate from $362 per week to $446 in 2025, $530 in 2026 and $614 in 2027.
- Increase the dependent allowance from $6 to $12.66 per dependent (up to 5) in 2025, $19.33 in 2026 and $26 in 2027.
- Tie both the maximum weekly benefit rate and dependent allowance to the Consumer Price Index in 2028 and annually thereafter, putting annual increases on autopilot.
Why it matters: It will be nearly impossible to enact a benefit payout of this size without creating the need for a corresponding increase in state UI taxes on employers in the years to come.
- In fact, the UI Trust Fund, the employer-financed fund that pays benefit to claimants, is still recovering from the COVID-19 pandemic; its current balance is only $2.7 billion — down significantly from the $4.54 billion balance it had in March of 2020 — due to an explosion in COVID claims and fraud and mismanagement of the Fund.
- The increased benefits are expected to raise costs and complicate staffing — and comes at a time when businesses are already dealing with rising costs, economic uncertainty and other workplace mandates, including the new Earned Sick Time Act (ESTA) and minimum wage mandates.
Our thought bubble: Despite our strong opposition, the Legislature jammed through this benefit increase in the final days of the Lame Duck session.
- Moving forward, the Michigan Chamber will be keeping a close eye on how these UI benefit increases impact the balance of the Trust Fund and reminding lawmakers and regulators that businesses continue reporting difficulty finding workers ready and willing to fill the more than 200,000 open jobs across Michigan today.
- Rather than focusing on ways to increase unemployment benefits, the Chamber will continue to advocate for solutions to matching unemployed workers with available jobs.