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About UIA and Unemployment Insurance in Michigan

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 (UI) 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.

Unemployment Taxes

Employers in Michigan pay two taxes on their payroll to support the federal-state employment security system. The first tax is paid to the Unemployment Insurance Agency (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. 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 6.2 percent 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%.

Prior to 1972, governmental entities and many non-profit organizations were not covered under the federal-state employment security system. Effective January 1, 1972, employees of these organizations became eligible for unemployment benefits on the same basis as other employees, and these organizations became liable for payment of these unemployment benefits. 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.

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 213,000 contributing employers and 5,300 reimbursing employers, and collects about $1.4 billion a year in Michigan unemployment taxes from employers.

Unemployment Benefits

Unemployment insurance is intended to provide a temporary benefit sufficient to satisfy the basic needs of workers who have demonstrated an attachment to the workforce and who have become unemployed through no fault of their own. Unemployment insurance was not intended to guarantee an employee's standard of living during periods of unemployment. 

In 1995, then-Gov. John Engler signed Public Act 25 into law, significantly reforming Michigan's UI law and bringing benefit payments more in line with other states. Specifically, the law lowered the weekly benefit amount by three percentage points from 70 percent to 67 percent of after-tax earnings, and removed a 1981 provision that allowed the maximum weekly benefit to increase regardless of the UI trust fund solvency. The law increased the maximum weekly benefit rate from $293 to $300 and provided that further increases require legislative approval.

States are free to determine the eligibility criteria and the level of benefits payable. Michigan requires that a UI applicant show a reasonable prior attachment to the workplace to be eligible for UI benefits. To receive weekly benefits, Michigan requires applicants to be unemployed, have high quarter wages of 388.06 times the state minimum hourly wage, and base period wages 1.5 times the high quarter wages.

The high quarter wage requirement is:

  • $1,998 for benefit years beginning prior to 4/1/2007
  • $2,697 for benefit years beginning 4/1/2007 through 1/5/2008
  • $2,774 for benefit years beginning 1/6/2008 through 1/3/2009
  • $2,871 for benefit years beginning on or after 1/4/2009

Applicants must certify that they are able, available and seeking full-time work. Employees who quit a job or are discharged for work-connected misconduct are disqualified from receiving benefits. However, disqualified workers can requalify for benefits by obtaining new employment.

Unemployed workers now receive 4.1 percent of high quarter earnings plus $6 per dependent (limited to five) up to $362. An unemployed worker can collect up to 20 weeks of benefits during a 52-week benefit year. During periods of high unemployment, unemployed workers may become eligible for an additional 13 weeks of extended benefits.

Today, the UIA pays out about $1.7 billion a year in regular UI benefits.

What's In a Name?

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. Here are our mission, vision and values:

  • UIA Mission: "Everything we do is aimed at providing the highest quality unemployment insurance services, ensuring the economic growth of Michigan - its employers and its workers."
  • UIA Vision: "We strive to be the best Unemployment Insurance Agency for our customers and employees exemplifying integrity and excellence."
  • UIA Values: Integrity, Trust, Excellence, Employees, Inclusion, Teamwork, Customer Focus, and Communication.

We offer an array of convenient on-line services to unemployed workers and to employers. Idled workers may file unemployment claims by telephone or the Internet, while employers may file claims for their workers in mass layoffs. Click here for more information about Telephone Filed Claims. To file an unemployment claim on line, click here.

Employers may file their quarterly Wage Detail Reports (Form UIA 1017) on line. They may also use our e-Registration service to obtain a UIA account number, and request a Registration and Seeking Work Waiver on line. For more information about the electronic 1028, click here. For e-Registration, and to request a Registration and Seeking Work Waiver, click here.

Because of our commitment to customer service, more automated services are expected to be rolled out in the near future.

The UIA operates several Problem Resolution Offices (PROs) to resolve customer problems and provide access to automated resources. PROs provide telephones and computers for customers who may not have access to a computer or telephone to file their claim. They also provide in-person help for problems with claims. Click here for a list of PRO locations and more information.