What the law says:  This issue is covered by Sections 20, 32(b), and 29(11) of the Michigan Employment Security Act, and by Administrative Rule 205.  The law says that when a new claim is filed, the Unemployment Insurance Agency (UIA) must notify the unemployed worker's last employer, and each of the employers in the base period of the claim, about potential charges to the employers' accounts.

The UIA mails out Form UIA 1575-WR, "Monetary Determination," showing the wages employers reported for the unemployed worker, the unemployed worker's weekly benefit amount, the number of weeks of benefits payable to the unemployed worker, the maximum possible charge to each employer, and the reason the unemployed worker gave for the separation from employment.

Form UIA 1575-WR, "Monetary Determination"

In some cases, the employer will agree with the separation reason shown on Form UIA 1575-WR, but will believe that the separation reason is one that should disqualify the unemployed worker from receiving unemployment benefits (such as a quit without good cause attributable to the employer, or a discharge for misconduct connected with the work).  In those cases, the employer should notify the UIA of the details of the separation and request that their account not be charged for any benefits that may become payable to the unemployed worker.  The employer should explain why they believe the unemployed worker's separation was under disqualifying circumstances and therefore their account should not be charged.  Benefits may become payable if the unemployed worker requalifies for benefits or has already done so and is now entitled to benefits.

If the employer notices a discrepancy in the wages shown, or in the reason for separation, and the employer believes the unemployed worker's reason for separation would prevent the charging of benefits to the employer, then the UIA must receive corrected information from the employer, in writing, within 10 days from the date the UIA mailed the form to the employer (or within 30 days if the separation reason was "quit").  

If the employer does not provide corrected information within that 10-day  (or 30-day for "quit") period, benefits will be paid on the basis of the information the UIA has on file.  If benefits later need to be reduced or repaid by the unemployed worker, the employer's account will be credited only as to payments due for the week the corrected information is received by the UIA.

If an unemployed worker requalifies for benefits, the benefits become payable even if the separation reason was disqualifying.  The employer's interest in responding to Form UIA 1575-WR is not to prevent the payment of benefits, but rather to prevent charges for those benefits from being applied to the employer's account.

Form UIA 1955, "Redetermination of Charges"

If the employer responds in writing to Form UIA 1575-WR and requests (with supporting reasons)  that charges not be made to its account, the UIA will consider whether the reason for the unemployed worker's separation was disqualifying.  The employer's account will not be charged if the separation reason was disqualifying, even though the unemployed worker may have already requalified for benefits and is being paid.   Form UIA 1955 will notify the employer whether the UIA will be charging the employer's account.  This will often be the Redetermination the employer appeals to an Administrative Law Judge.

The Form UIA 1575-WR is the only determination Form that will be sent to the employer and unemployed worker if the unemployed worker has already requalified for benefits and if the employer agrees with the wage information and charges to its account.

Form UIA 1707, "Request  for Information Relative to Possible Ineligibility or Disqualification;" Form UIA 1302, "Nonmonetary Determination"

If the unemployed worker has not already requalified for benefits at the time the claim is filed, then the employer will also be sent Form UIA 1707.  This Form asks for details about the unemployed worker's separation from employment.  The employer's answers to these questions, along with the unemployed worker's statement, will be considered in determining whether the unemployed worker will be disqualified from receiving benefits. The UIA will issue Form UIA 1302, "Nonmonetary Determination," indicating whether the unemployed worker will be disqualified from benefits.

Circumstances the Employer Should Report to the UIA that Could Prevent Charges to the Employer's Account

• The employer should report the reason for separation and supporting facts by responding to the "Monetary Determination," Form UIA 1575E-WR.  If the employer explains that the reason for the unemployed worker's separation was a disqualifying reason (requiring subsequent requalification before benefits were payable), the employer's account would not be charged, even if the unemployed worker has requalified and is entitled to benefits.
•  The employer should respond to the UIA's request for information about the separation.  The UIA will mail Form UIA 1707 to the employer if the Agency knows that the reason for separation was a "benefit reducing" reason such as theft, theft after discharge, willful destruction of property, assault and battery, or discharge for drugs.  If Form UIA 1707 is not sent to the employer, the employer should provide, within 10 days, written information about the separation in response to Form UIA 1575-WR.
•  The unemployed worker may have left the employment of one employer after accepting permanent full-time work (and actually going to work) with another employer.  The first employer, in response to Form UIA 1575-WR, should so notify the UIA and the charges for unemployment benefits will be transferred to the new employer.

How employers will be charged for benefits

If any employer paid a worker $200 or less in the base period of the claim, that employer's account will not be charged for any benefit on that claim.

Last Employer

If the wages paid by the unemployed worker's last employer before the unemployed worker filed a new claim equaled at least $1,442.00, then the entire benefit payment for each of the first 2 weeks of the claim will be charged to the unemployed worker's last employer.

If the last employer did not pay the unemployed worker the amount described above (for claims effective prior to April 1, 2007; $1,946 from April 1, 2007 through January 5, 2008; $2,002 from January 6, 2008 through January 3, 2009; and $2,072 from January 4, 2009 and thereafter), then each each week of benefits, beginning with the first week, will be charged, proportionately, to all base period employers.  The separating employer may or may not be a base period employer.

Base Period Employer(s)

The base period employers are charged their proportionate share of the unemployed worker's weekly benefit payments beginning with week 3 of benefits (assuming the last employer was charged for the first 2 weeks of benefits).

The proportionate charging of benefits is calculated by determining the percentage of the unemployed worker's total base period wages that were paid by each base period employer.  That same percentage is then applied to the unemployed worker's weekly benefit amount to determine the amount of each week's benefits that are charged to the account of each base period employer.

Example:

The unemployed worker has a weekly benefit amount of $118.00, and is entitled to 16 weeks of benefits.  The first 2 weeks will be charged to the last employer.  The unemployed worker received wages in each of the quarters of the base period as follows:

Charges to Base Period Employers:

There are 4 different base period employers in the base period shown above.  Total wages paid in the base period are $4,400.  Of that amount, each base period employer paid the unemployed worker the following amounts in the base period: 

Employer A paid a total of $1,100

($350, $500, and $250 in quarters 1, 2, and 3, respectively)

Employer B paid a total of $1,300

($150, $900, and $250 in quarters 1, 2, and 3, respectively).

Employer C paid a total of $1,500

(in quarter 2)

Employer D paid a total of $500

(in quarter 4)

Each base period employer's proportionate share of total wages paid to the unemployed worker in the base period is as follows:

Employer A = $1,100 ÷ $4,400 = .25 = 25%

Employer B = $1,300 ÷ $4,400 = .2954.54 = 29.5454%, truncated to 29.545%, rounded to 29.55%

Employer C = $1,500 ÷ $4,400 = .340909 = 34.0909%, truncated to 34.090%, rounded to 34.09%

Employer D = $500 ÷ $4,400 = .113636 = 11.3636%, truncated to 11.363%, rounded to 11.36%

These percentages represent each employer's proportionate share of the unemployed worker's base period wages.  If the percentages do not total 100%, then the amount needed to bring the total to 100% will be added to the percentage share of the employer with the largest pro rata share of the benefit charge.

These are the same percentages that are multiplied against the unemployed worker's weekly benefit amount to determine each employer's share of the charge for the unemployed worker's weekly benefit payment.  In this example, the unemployed worker has a weekly benefit amount of $118.00.

Employer A's account will charged 25% of the weekly benefit charges.

.25 x $118 = $29.50

Employer B's account  will be charged 37.14% of the weekly benefit charges.

.295514 x $118 = $34.87

Employer C's account will be charged 17.14% of the weekly benefit charges.

.3409 x $118 = $40.23

Employer D's account will be charged 11.36% of the weekly benefit charges.

.1136 x $118 = $13.40

If, after rounding, the benefit charges do not total the unemployed worker's weekly benefit amount, the difference will be added to the charge of the employer with the largest charge.

The maximum possible liability each base period employer will have on this claim is as follows:

Emp A :  $29.50 for 16 weeks   =   $472.00

Emp B:   $34.87 for 16 weeks   =   $557.92

Emp C:   $40.23 for 16 weeks   =   $643.68

Emp D:   $13.40 for 16 weeks   =   $214.40

Total Charges to Last Employer's Account:

Since Employer D was both a base period employer and the last employer, and Employer D paid wages greater than $1,442 for separations before April 1, 2007 ($1,946 from April 1, 2007 through January 5, 2008; $2,002 from January 6, 2008 through January 3, 2009; or $2,072 from January 4, 2009 and thereafter), Employer D will also be charged 100% of the first two weeks of benefits.  100% x $118  = $118, for 2 weeks = $236.00

Therefore, the potential charge to the account of Employer D is $214.40  (proportionate share of base period wages) plus $236.00 (100% of first 2 weeks of benefits), for a grand total of $450.40.

Proof at the Hearing: If the subject of the hearing, as described in the "Notice of Hearing," is the amount and duration of benefits as described in the "Monetary Determination" (Form UIA 1575-WR), then either the unemployed worker or the employer can disagree with the UIA's calculation, or with the wages that formed the basis of the UIA's calculation.

If the subject of the hearing is whether the employer's account should be charged, as described in the "Redetermination of Charges" (Form UIA 1955), then the employer will have the burden of proving that the circumstances of the claimant's separation from employment were disqualifying (even if the unemployed worker has requalified for benefits and started receiving them).

If the subject of the hearing is whether the unemployed worker is entitled to benefits, as described in the "Nonmonetary Determination" (Form UIA 1302), then the employer has the burden of showing that the separation was disqualifying (for example, that the discharge was for misconduct or the quit was without good cause attributable to the employer) and the benefits are not payable.  The unemployed worker has the burden of showing that the separation was not disqualifying and benefits should be payable (for example, that the discharge was not for misconduct or the quit was with good cause attributable to the employer).

For Further Help:  The UIA Advocacy Program can provide assistance to employers and/or unemployed workers in preparing for Administrative Law Judge and Board of Review hearings on these issues.  Call 1-800-638-3994.