Employers pay billions of dollars into Michigan’s unemployment insurance system each year but unfortunately the system has been plagued with inefficiency, errors and scandal. These problems cost manufacturers dearly — in terms of time and money.
MMA fought hard in 2011 and 2013 for fundamental reforms of Michigan’s unemployment laws but it has been made abundantly clear that there is more to do.
We are forming a Special Task Force on Michigan Unemployment to bring manufacturing executives and staff together to develop recommendations for legislative solutions to address these potentially costly problems:
- Employer Non-Compliance Determinations: Beginning in 2016, thousands of employers were accused by the Unemployment Insurance Agency (UIA) of failing to respond to inquiries in a timely or adequate manner. These “non-compliance” determinations were first issued to employers on Form 6367 in January 2016. The process for protesting and adjudicating these determinations was unclear, confusing and in many cases totally inaccurate. We have worked with the Agency to make improvements but indications from 2017 determinations are that significant problems remain.
- Identity Theft Leads to Imposter Claims: Identify thieves are using worker data to apply for and obtain unemployment benefits. The dramatic uptick in occurrences of these “imposter claims” has been detrimental to employers who don’t pay close attention to their reports and fail to protest the determinations, resulting in a negative effect on the employer’s tax rate. It has also been problematic for employers who did act to block the fraud, but the Agency failed to stop payment. It is obviously detrimental to the worker whose identity has been stolen and often those employees look to the employer for help in cleaning up the mess. Virtually all employers — both public and private — have been impacted. Unfortunately, the UIA has been slow to the draw and has done little in our opinion to combat the onslaught of imposter claims.
- Penalties for Fraud: At the same time, the UIA has been overwhelmed by a situation that led at least 20,000 claimants to be falsely accused of fraud. State and federal lawsuits are proceeding. In the meantime, the UIA has halted all collection activities for the people subject to fraud determinations during the time period in which a new computer system auto-adjudicated fraud cases and applied 400% penalties. New Talent Investment Agency Director Wanda Stokes is now apologizing for the agency’s role in the mess and calling for the legislature to reduce penalty amounts required by law.
We need your help to make meaningful improvements to this potentially disastrous situation. Please let me know by Friday, February 24 if you or one of your colleagues will be at the table to help develop recommendations for legislative and regulatory solutions. We know that you are busy and that your time is valuable — this Special Task Force will only meet as absolutely necessary to review the situation and develop recommendations for change.
A meeting of the Special Task Force on Michigan Unemployment will be scheduled for early March during which we’ll develop a strategy for moving forward. It important that we have the practitioners within member companies that work on unemployment matters at that meeting.