Legislative Dems Outline Plan to Fix UIA, Help Families Hurt by False Fraud Claims

Bills to reimburse families, fix unemployment system, address employer fraud
Tuesday, February 14, 2017

LANSING — Legislative Democrats are preparing to introduce a package of bills that will restore lost income, fees and penalties to people falsely accused of unemployment fraud, improve the state’s Unemployment Insurance Agency and hold accountable employers who fail to pay into the state’s unemployment fund. The legislation comes after revelations that the state made approximately 50,000 false accusations of unemployment fraud against 40,000 Michigan workers. Of those, 93 percent have been found to be false so far. The UIA also leaked personal information, including Social Security numbers, of nearly 2 million people.

“Families across the state have been harmed by a state Unemployment Insurance Agency that falsely accused them of fraud and punished them with wrongful fees and penalties,” House Democratic Leader Sam Singh (D-East Lansing) said. “Our governor claims to treat citizens as ‘customers,’ but this has to be one of the worst examples of his customer service yet. This scandal has had families go into bankruptcy while some employers have evaded paying into the system with limited consequences. Legislative Republicans have been more interested in removing unemployment protections than fixing this broken system.”

Problems in the Michigan Unemployment Insurance Agency date back to at least 2012, when an audit found that the agency had failed to hold accountable employers who didn’t pay their unemployment taxes. According to Michigan’s Department of Talent and Workforce Development, which oversees the UIA, the agency falsely accused tens of thousands of Michiganders of fraud, costing them not only benefits, but fees and penalties as well. The false allegations cost the average victim thousands of dollars. Problems with the agency continue, and just last month, the UIA revealed that it may have exposed the private information of nearly 2 million people in Michigan.

“I’m very pleased to see Democrats in our state Legislature putting forward legislation to address problems that have come to light in our unemployment insurance system,” Michigan Congressman Sandy Levin (D-Royal Oak) said. “I’ve long called for the state to make whole those who were wronged by false claims of fraud. I also support changes to make our system fairer in the future, including reducing the 400 percent penalty — which is the highest in the nation —  for those accused of faulty claims, and restoring benefits that were recklessly eliminated. Supporting this legislation should be an easy decision for anyone truly wanting to make right a wrong.”

Michigan House Democrats and Michigan Senate Democrats are putting together a package of legislation to address the pervasive problems at the Unemployment Insurance Agency. Bills in the legislative package will:

Assist Workers Harmed by False Fraud Allegations and Data Breaches

  • Reimburse costs incurred by victims of false fraud allegations, including lost benefits, fees, penalties, legal fees, late fees and other expenses. Expand the statute of limitations on claims related to false fraud allegations against the UIA to include people harmed between Jan. 1, 2007, to Dec. 31, 2016. Require state departments that compromised citizens’ personal information to help victims of identity theft.

Fix the Unemployment Insurance Agency

  • Make Michigan’s unemployment benefits comparable to other Midwestern states by restoring the maximum duration of benefits to 26 weeks, increasing the weekly maximum benefits to $483 plus an additional $120 for claimants with children, and indexing the benefit the cost of inflation. Reduce penalties assessed to fraudulent claimants to a maximum of 100 percent.

Hold Employers Accountable

  • Increase the penalty to employers that are more than 30 days late with unemployment tax payments by 100 percent.

          “Folks claiming unemployment benefits have already fallen on hard times, and the state isn’t helping by rubbing salt in their wounds,” said Senate Minority Leader Jim Ananich (D-Flint). “There has been one scandal after the next and they are too disastrous and frequent to ignore. Democrats are committed to righting the state’s wrongs and mending the UIA so people can get back on their feet and back to work.”