About UIA and Unemployment Insurance in Michigan

UI History

The Great Depression of the 1930s led to widespread unemployment across the United States. President Roosevelt and the Committee on Economic Security drafted legislation to help unemployed workers and their families.

The Wagner-Peyser Act (1933) requires states to maintain a national system of public employment offices, while the Social Security Act (1935) levies a federal tax on employers to provide for the payment of unemployment insurance benefits.

Michigan followed suit statutorily in 1936. The Michigan Employment Security Act implements the federal laws by providing for public employment offices and the payment of UI benefits to workers laid off from their jobs through no fault of their own.

How does unemployment work?

Employers in Michigan pay two taxes on their payroll to support the federal-state employment security system. 

• The first tax is paid to the UIA to fund the state unemployment trust fund from which unemployment benefits are paid. The tax rate is experience rated and ranges from 0.06 up to 10.3 percent on the first $9,000 of each employee's wages (for qualified employers). The U.S. Treasury holds all state unemployment trust funds in state-specific accounts.

• The second tax is assessed under the Federal Unemployment Tax Act (FUTA). The Internal Revenue Service collects monies from this tax and deposits them with the U.S. Treasury. This tax pays for the administration of the state Employment Services and Unemployment Agencies, finances the federal share of extended benefits, and provides a loan account from which states may borrow if the UI trust funds are insolvent. 
  
  • The current FUTA tax rate is 6% on the first $7,000 of wages per employee. Employers who have paid their state unemployment taxes for the year by the due date of January 31 can claim a tax credit of 5.4%., making the net tax liability 0.8%.

Unemployment for Non-Profits

Effective January 1, 1972, employees of non-profit organizations became eligible for unemployment benefits on the same basis as other employees, and these organizations became liable for payment of these unemployment benefits. For employees working at a non-profit to be entitled to unemployment benefits, it depends on whether or not the non-profit is registered as an employer for unemployment insurance purposes. If you are unsure, we recommend you apply to find out whether or not you are eligible.

In Michigan, governmental entities, 501(c)(3) non-profit organizations and Indian tribes or tribal units may elect to reimburse the unemployment trust fund dollar for dollar for benefits paid to their employees rather than pay the UI payroll tax. Such employers do not pay the FUTA tax or contribute toward the administration of the state's employment security programs.

These entities are known as reimbursing employers.

What is the Trust Fund?

The UI portion of the federal-state employment security system is designed to operate under the assumption that benefit liabilities are funded in advance of actual payment. This allows for the systematic accumulation of benefit reserves in a state trust fund during periods of economic growth in order to have sufficient assets to pay unemployment benefits during periods of economic decline. 

The UIA's Tax Office maintains tax accounts for about 240,000 contributing employers and 5,500 reimbursing employers, and collects on average about $1.4 billion a year in Michigan unemployment taxes from employers.

How Benefits are Calculated

To receive weekly benefits, Michigan requires applicants to be unemployed or underemployed, have a high quarter that meets the requirements below, wages in a minimum of two calendar quarters in the base period, and total base period wages must equal 1.5 times the workers highest quarter.

The high quarter wage requirement is:

• $4,097 (For benefit year starting from January 1, 2025 – February 20, 2025).
• $4,842 (For benefit year starting after February 21, 2025).
• $5,157 (For benefit year starting after February 21, 2026).
• $5,494 (For benefit year starting on or after February 21, 2027).
• $5,809 (For benefit year starting after February 21, 2028).

Applicants must certify that they are able, available and seeking full-time work. In order to qualify for your benefits, employees must have lost their job through no fault of their own.  If found disqualified, workers can met the rework/requalification requirement through new employment.

The Weekly Benefit Amount (WBA) is established based on your highest quarter of earnings, multiplied by 4.1 percent.  The max Weekly Benefit Amount is $446.  An additional $12.66 is added per dependent, limited to five dependents. An unemployed worker can collect up to 26 weeks of benefits during a 52-week benefit year. 

About UIA

This Agency's name has changed often over the years. In 1937 we started out as the Michigan Unemployment Compensation Commission. Later, we became the Michigan Employment Security Commission or MESC - a name which many still refer to us to this day. Next, we became the Michigan Employment Security Agency, then the Unemployment Agency, followed by the Bureau of Workers' & Unemployment Compensation. Since December 7, 2003, we have been the Unemployment Insurance Agency.

Throughout these organizational changes, which included the closure of branch offices around the state, our mission to unemployed workers has remained largely intact. 

UIA’s Mission

• Through teamwork, we serve as stewards and leaders in the customer centric delivery of Michigan's unemployment insurance program and we do so with integrity and efficiency.

UIA’s Vision

• UIA will deliver high quality, innovative unemployment services to our customers through an experienced and dedicated team of professionals.

UIA's Values

• Integrity, Team, Customer-Centric, Stewardship