Michigan’s unemployment claimants could once again receive up to 26 weeks of benefits under legislation debated in committee that would undo the Snyder administration’s 20-week cap on payments. The bill is tie-barred to a modification package for the Unemployment Insurance Agency (UIA).
Thursday morning, the Senate Labor Committee heard less than an hour of testimony on SB 962, SB 975, SB 976 and SB 981, which, among other things, would ensure that domestic violence victims can claim unemployment if they missed work because of the abuse.
But during the conversation, the Michigan Manufacturers Association (MMA) flagged a substitute that tie-bars the proposed updates to SB 40, which reverses the 20-week cap.
David Worthams, the MMA’s director of employment policy, explained his association was initially not going to take a position on the legislation that actually received testimony. He believes they are good bills but tie-barring them to SB 40 is risky.
“I think it is worthy to have a debate on 20 to 26 weeks. I think it’s worthy of having a debate on its own merits,” Worthams said, worrying that tie-barring the discussed updates to SB 40 could halt the “necessary changes” that the UIA needs for its procedures.
If the tie-bar is removed, so will the MMA’s opposition, Worthams explained.
Senate Labor Chair John Cherry (D-Flint) said the tie-bar shows his committee’s intent to address the UIA issue during this session.
As for the bills that were talked about, they would require that writings prepared or used by the UIA for “an official function” are subject to the Freedom of Information Act (FOIA), unless they are used in fraud investigations.
The legislation also reforms how the UIA can waive repayment enforcement for someone who was improperly paid benefits “contrary to equity and good conscience.”
SB 962 allows someone to have up to $100,000 in a checking or savings account and still have repayment obligations waived. The bill would apply if that $100,000 was outside the person’s reported wages as long as their household income was at or below 150 percent of the federal poverty guidelines.
“The cash asset test used by the UIA to disqualify claimants from receiving a hardship waiver . . . we want to make sure that if you save money, and try to prepare for difficult situations, that’s not held against you as you go through this process,” said Cherry.
Jacob Fallman, the UIA policy coordinator of the Sugar Law Center for Economic Justice in Detroit, said he’s seen good reasons for claimants to have “a lump sum of cash.”
For example, he’s seen folks waiting a “very long time” for hearings to be resolved or to learn if benefits are coming. In those instances, they might feel forced to dip into their retirement savings.
“It makes more financial sense to do a lump sum withdrawal from your retirement accounts than to just dip back in every single month to take out whatever your living expenses are,” Fallman said. “Sometimes people will have just made the hard decision to . . . raid their retirement accounts, only to then be denied a hardship waiver because of that.”
He said one of the Sugar Law Center’s advocates had a client receive a “retroactive lump sum Social Security payment.” They had waited a long time for it, and its appearance resulted in a waiver denial when it arrived unexpectedly.
Christine Wasserman, a Flint-based employment attorney, said to the committee on Thursday that about 80 to 90 percent of her work since March 2020 has involved unemployment benefits.
She said some of the folks who were mistakenly paid benefits during the COVID-19 pandemic, without any intentions of fraud, suddenly found themselves obliged to pay more than $50,000.
“There really is no definitive process for getting a waiver, in particular, getting a waiver that is based upon an agency error,” Wasserman said, pointing to how SB 962 instructs the UIA to notify claimants why they were determined ineligible for a repayment waiver and ensures their access to an appeal process.
SB 962 also removes the six-month waiting period for when someone can apply for a waiver again. For one calendar year, the UIA could not consider more than six waiver applications total under the bill, with the timeline starting upon the first one being received.
For Wasserman and Fallman, the change deals with things that come up in someone’s financial life that reveal they cannot make repayments after their waiver was first denied.
Wasserman said one of her clients owed more than $50,000, and about a week following her initial waiver denial, she was diagnosed with an autoimmune disorder disabling her from working.
“She can’t for the period of time that it’s taking her and her medical staff to figure out what’s going on. She can’t file for another financial waiver,” she said. “She’s stuck. She might be entitled to a tax refund, and this is something that has happened relatively recently, but because of the language in the current statute, the unemployment agency can intercept that tax refund.”
According to the U.S. Department of Labor, there were 11,782 initial unemployment claims filed in Michigan for the week ending Nov. 2, representing a 3,563 increase from the previous week alone.
Meanwhile, looking back at the COVID-19 pandemic, the Legislature’s Office of the Auditor General (OAG) found that from March 15, 2020 through Sept. 27, 2021, Michigan’s UIA lost about $3.9 billion on overpayments to ineligible claimants for pandemic unemployment benefits.
Returning to the bill that Thursday’s package was tie-barred, Monique Stanton, the president of the Michigan League for Public Policy (MLPP), said in remarks that offering up to 26 weeks of benefits gives “more security for families facing permanent and risky budget cuts due to benefits running out.”
“Simply offering more weeks does not mean workers remain on unemployment longer. While some do exhaust benefits, primarily in communities where there are fewer job opportunities, the average duration a claimant receives unemployment benefits in Michigan is only 11.6 weeks,” Stanton said.
Individuals filing an initial claim before Jan. 15, 2012 could have received up to 26 weeks of benefits, based on circumstances. The six-week reduction happened during former Gov. Rick Snyder administration with a Republican-led Legislature.
Cherry’s notice that Senate Labor wants to look at reforming Michigan’s benefits structure comes as Democratic leaders hash out their priorities for the Lame Duck period, before Republicans begin their 58-seat majority in the House next term.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
Click here for more News & Resources.