Here are some answers to common questions about Michigan's new wage record system of calculating unemployment insurance benefits:

What is a wage record system?

Wage record is a method of determining unemployment insurance (UI) benefits based on quarterly employee wage reports already filed by employers with the state's Unemployment Insurance Agency (UIA). Under federal law, employers are required to submit each employee's quarterly wage records. States, however, are not required to use that information as the basis for unemployment claims. Forty-nine states have chosen to rely on the quarterly wage records rather than requesting wage information from employers. Michigan is the 50th state to use quarterly wage records.

How does wage record differ from UIA's wage request system?

Under wage request, UIA would send forms to employers requesting recent weekly employee wage information, when the worker became unemployed and filed a claim for jobless benefits. With wage record, UIA uses quarterly employee wage information that it collects to determine if an individual is monetarily eligible for benefits. UIA gathers the quarterly wage data for Michigan's Department of Human Services (DHS) under the Income and Eligibility Verification System. The wage information is used to detect potential welfare and UI fraud.

Why has Michigan opted to discontinue the wage request system it has used for so long?

• The wage request system was inefficient and prone to error. As a result, the U.S. Department of Labor (USDOL) and the state Auditor General strongly recommended that Michigan convert to wage record.
  
  
• Michigan needed to eliminate the dual reporting system that required employers submit quarterly wage records for all employees and weekly wage information for those who became unemployed and filed claims for jobless benefits.
  
  
• Once UIA began using the quarterly wage information to establish unemployment claims, it saved taxpayer dollars by reducing administrative costs to other state and local agencies by nearly $5 million annually.
  
  
• Wage record puts Michigan state and local agencies on an equal footing with those in other states in reporting their standards and achievements under the federal Workforce Investment Act, which went into effect on July 1, 2000.
  
  

UIA worked with the business and labor communities to develop a wage record program that is as close to the previous system as possible, while still taking advantage of the efficiencies of a wage record system. UIA expects that the total benefit payout and total tax collections will remain the same from wage request to wage record, although some jobless workers and employers may see individual changes.

When will the wage record system go into effect?

Wage record began with new unemployment claims filed on and after October 1, 2000.

What is involved in converting to a wage record system?

Although it may seem that converting to a system using existing employer reports would be fairly easy, the change required that every UI procedure and report and every agency computer program be reviewed and possibly modified. In addition, UIA staff needed retraining, and all of the agency's UI public education materials required updating.

The 1994 legislation authorizing wage record, for example, is 122 pages long. It's lengthy because it had to redefine most of the basic UIA provisions such as monetary qualifying requirements, weekly benefit amount calculations and the system for charging benefits and assigning UI tax rates.

Are there any changes in the "misconduct," "voluntary leaving," "labor dispute," or "leaving to accept" provisions of the law?

No. The only changes in the law were in the areas of how jobless workers qualify for benefits based on their earnings, and how the benefit amounts and durations are calculated. All of the disqualifications and "leaving to accept" provisions remain as they were under the old law, and all precedent decisions on those separation issues continue to apply as before.

How will UI customers and the Agency benefit from the change to wage record?

The conversion to a wage record system from a wage request system offers several benefits including:

• Michigan employers are no longer required to complete up to one million UIA forms annually, requesting weekly wage information. This saves employers and UIA countless hours in processing time as well as mailing costs.
  
  
• Laid off workers know immediately upon filing their claims how much they may be entitled to in unemployment benefits, instead of having to wait up to 14 days.
  
  
• Wage record can help identify and resolve problems with wage information before the first payment is made, and thereby reduce errors and fraud in the UI system, resulting in millions of dollars in annual savings to the state's UI trust fund.
  
  
• By converting to wage record, the federal government has provided most of the funding to cover Michigan's conversion costs.
  
  
• State and local agencies save nearly $5 million annually in administrative costs.
  
  

Where can I get more information about the wage record system?

The UIA's Employer Customer Relations hotline is 1-800-638-3994 (outside of Michigan, please call 1-313-456-2301); claimants with questions about claims may call 1-866-500-0017.