Hertel: UIA Bills Protect Workers from False Fraud Allegations

Lawmaker sees first bill passed bringing fairness to fraud penalties
Wednesday, November 8, 2017

LANSING — State Rep. Kevin Hertel (D-St. Clair Shores) saw his first bill passed today when the House approved a bipartisan package of bills bringing needed reforms to the Unemployment Insurance Agency. The bills address problems that resulted in the agency making 44,000 false fraud allegations against 50,000 people between Oct. 1, 2013, and Aug. 7, 2015. Hertel took leadership on the issue for House Democrats and was a member of the bipartisan workgroup that worked on the bills approved today.

“I was honored to be a part of the bipartisan workgroup that worked with stakeholders including employers and claimant representatives to write this package of UIA reform bills,” said Hertel. “The legislation we passed today will help bring real change to our unemployment insurance system and protect workers, preventing something like the MiDAS failure from ever happening again.”

Hertel’s bill, House Bill 5166, addresses the penalty rates for fraudulent claims, bringing them closer to those of other states. Currently, a simple oversight  such as checking the wrong box on the unemployment insurance form and a case of willful identity theft are assessed at the same rate—full remittance of the amount disbursed plus a 400 percent penalty. Hertel’s bill would still assess penalties of 400 percent for an imposter who committed identity theft, but it lowers the amount repaid for other cases of fraud to the amount obtained for a first offense and 1.5 times the amount for a second or subsequent offense.

“The workgroup agreed that while identity thieves deserve harsh penalties, there needed to be a more reasonable penalty system for other fraud adjudications,” said Hertel. “I thank my colleagues in the workgroup and in the House for their efforts and support on this package, and I look forward to the further work that will be done to make citizens affected by the MiDAS failure whole again.”