The Michigan Unemployment Insurance Agency (UIA) has received preliminary approval of a class action settlement in a lawsuit by workers who said the agency ordered them to pay back pandemic-era jobless benefits before resolving a protest or appeal. The settlement is a key step in the UIA’s efforts to resolve issues that arose during a national public health crisis and its continued focus on transforming into a national model for fast, fair, and fraud-free service.

UIA will seek Legislative approval of $55 million for a settlement fund. A claims administrator will determine which workers would qualify for payments. The Michigan Court of Claims approved the preliminary settlement in Saunders v Unemployment Ins. Agency et al. on April 25.

“This settlement agreement lets us focus staff and resources on customer service and the reforms we are making at the Unemployment Insurance Agency to benefit Michigan workers and employers alike,” UIA Director Julia Dale said. “Throughout this legal process, the parties worked cooperatively with each other and the court to establish new processes and procedures so Michigan residents won’t find themselves in a similar situation in the future.”

At issue are millions of dollars in benefits that were ordered to be repaid before the UIA could determine whether a wave of protests or appeals were filed on time or filed at all on a rush of claims during the pandemic.

Under the settlement agreement, UIA will refrain from reinitiating attempts to collect overpayments until protest or appeal rights have been exhausted. The agency will also implement a process for workers to seek waivers.

As part of the litigation process, the Court of Claims ordered the UIA to stop most overpayment collections on claims after March 1, 2020, where a worker may have filed a protest or appeal. UIA agreed to put in place remedial actions and reforms before the order pausing collection activity is lifted. The Court will decide when collections resume.

Under the agreement, UIA is not admitting to liability in the case. Workers who join the settlement must agree to release all claims against the UIA.

A commitment to helping workers

The settlement agreement is among a number of reforms implemented by Director Dale – the agency's 11th director in as many years – to help workers apply for jobless benefits:

• The UIA Claimant Roadmap is an easy-to-follow, user-friendly six step guide to applying for and understanding your benefits. You can find the roadmap at Michigan.gov/UIAClaimantRoadmap.
• First-time filer coaching sessions use online group sessions to guide claimants through the steps needed to complete an application and qualify for payments.
• UIA’s Advocacy Program has added new advocates and raised their compensation by 30 percent. The Advocacy Program provides free legal advice to workers and employers who appeal UIA determinations.
• Planning and design are under way to replace the decade-old MiWAM computer system used by workers to apply for benefits and employers to pay unemployment insurance taxes. The new computer system will be easy to use, speed claims processing, and build on the agency’s aggressive anti-fraud tactics. It is expected to be fully operational in 2025.
• The number of days available to schedule appointments has been extended to 14 days in advance.
• UIA staff are located in 10 regions across Michigan as part of the UIA Community Connect program to provide hands-on expertise to employers and workers about the unemployment insurance application process. Liaisons also connect workers and employers to UIA’s outreach and education resources.
• A revamped public website at Michigan.gov/UIA that is user-friendly and responsive for those accessing services using cell phones or tablets.

Tools benefit employers, fight fraud

Since being named to lead the UIA in October 2021, Director Dale has launched other significant resources to help employers navigate unemployment insurance and that bolster the agency's fight against fraud:

• Developing the innovative Employer Help Center, which can be found at Michigan.gov/UIAEmployerHelpCenter. The plain language Help Center provides answers to employers on unemployment tax and claim issues and UIA programs.
• Naming a Legal Advisor and creating the Legal and Compliance Bureau to leverage collaborative anti-fraud practices to pursue bad actors, in collaboration with the Michigan Attorney General’s office, and local, state and federal law enforcement. To date, 162 people have been charged, 91 convicted, and 71 sentenced.
• Creating the UIA Modernization Workgroup, consisting of labor, business and jobless advocates to advise the UIA on significant improvements in how it can better serve Michigan workers and employers.
• Scoring 100 percent for the third year in a row from the U.S. Department of Labor (U.S. DOL) on employer audits, meeting the department's reasonable assurance of quality benchmark, in 2022, 2021, and 2020.
• Rebuilding to more than $2.3 billion (and growing) the UI Trust Fund, from which weekly benefits are paid to workers.
• Winning six national awards since 2017 for anti-fraud efforts from the U.S. DOL.
• Implementing new ethics and security clearance policies for employees and contractors.
• Renovations at five Local Offices – Sterling Heights, Saginaw, Grand Rapids, Lansing and Detroit – to improve the user experience for claimants who want to speak directly with an agent.
• Reassigning staff and resources to address the largest categories of claims that are contributing to the agency’s case backlogs.

Need help with a claim or have questions?

• Speak with an agent: Schedule an in-person, phone, or virtual appointment at Michigan.gov/UIA.
  Call Customer Service: 1-866-500-0017 during regular business hours.
  Chat with Ava: Our chatbot can answer many questions at Michigan.gov/UIA.