LANSING, Mich. – Governor Gretchen Whitmer has signed HB 5525, legislation making a deposit in Michigan’s Unemployment Compensation Fund and funding ongoing efforts to crack down on waste, fraud, and abuse of taxpayer funds.
“This fiscally-responsible, bipartisan bill will lower costs for small businesses and fight waste, fraud, and abuse in our unemployment system,” said Governor Whitmer. “This is the latest step we are taking to fight fraud, hold people accountable, and strengthen the Unemployment Insurance Agency after decades of disinvestment. By making a deposit into the Unemployment Compensation Fund, we can help small businesses balance their books by lowering the costs of unemployment. Together, we will pursue anyone who improperly exploits unemployment benefits to pad their own pockets and ensure they are prosecuted to the full extent of our laws. Attorney General Dana Nessel, Michigan’s UIA agency, our federal partners, and my administration will continue working together to utilize this funding as effectively as possible to crack down on fraud and save taxpayers money.”
HB 5525 Details
The bill appropriates a total of $139.8 million, including $106.8 million in federal funds, $24.0 million of Michigan’s General Fund, and $8.9 million of state restricted funds. The majority of the resources would be deposited into the Unemployment Compensation Fund to lower future costs for small businesses. The bill will also make customer service improvements at the Unemployment Insurance Agency (UIA) and hire dozens of additional employees to enhance fraud enforcement efforts. Finally, the bill helps the Office of Attorney General Dana Nessel pursue unemployment claimant fraud, employer fraud, and identify theft.
Pause on Collections
Recently, the Michigan Unemployment Insurance Agency paused new wage and state income tax refund garnishment until May 7th for approximately 398,000 Michiganders marked with overpayment statuses during the COVID-19 pandemic. Since the start of the pandemic, UIA has worked quickly to increase capacity and meet Michiganders’ unprecedented needs. When the federal government’s lack of clarity caused issues regarding who could receive payments, Governor Whitmer intervened to seek legal authority from the U.S. Department of Labor for a temporary pause on state collections until cases could be reviewed and/or issued waivers. Thanks to the recently granted pause and expanded eligibility for waivers, eligible Michiganders will not be penalized for following the established rules at the time they applied for benefits, and HB 5525 will continue improving the UIA system to better serve Michiganders.
Fighting Unemployment Fraud
Over the last several years, the Whitmer-Gilchrist administration and the UIA has leveraged resources on the federal and state levels to fight unemployment insurance fraud. It has worked closely with U.S. Department of Labor’s Office of Inspector General, the DOL’s Tiger Team initiative, other agencies such as the FBI and a former member of the United States Secret Service to monitor and quickly crack down on fraud, especially illegal activity committed by crime syndicates nationwide.
On the state level, UIA is an active member of the Governor’s Unemployment Insurance Fraud Response Team, working with the Department of the Attorney General and local law enforcement to identify and prosecute criminals. To date, 54 individuals have been charged and 13 have been convicted or pleaded guilty. The funding approved by Gov. Whitmer will allow UIA to hire more investigators and collections staff to pursue criminals and work to recover stolen funds. As the new head of UIA, Director Julia Dale will oversee implementation of the funding to continue to crack down on fraud and hold bad actors accountable.
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