What the law says: This issue is covered by Section 48 of the Michigan Employment Security Act and the Unemployment Insurance Agency (UIA) Administrative Rules 112, 113, and 302. The law says that to be entitled to unemployment benefits for a week, the worker must be either “unemployed” or “underemployed.”

An “unemployed” worker is one who has no earnings in a week; an “underemployed” worker is one who has some earnings in a week but is still entitled to some unemployment benefits for that week. However, a person who is working full-time in a week is not unemployed or underemployed and therefore cannot receive unemployment benefits for that week.

“Earnings” can include: a payment of a wage; of room, board or other living expenses; of vacation or holiday pay the employer designates to a particular week; or a payment made by an employer to a separated worker in lieu of notice of a discharge or layoff.

If an unemployed worker has earnings in a week while drawing unemployment benefits, the unemployed worker may be able to continue drawing partial benefit checks. The formula (beginning 3/31/96) is that for every $1.00 the unemployed worker earns in a week while drawing unemployment benefits, the benefit check is reduced by 50 cents. However, when the combination of the earnings and the unemployment benefits in a week exceeds 1½ times the unemployed worker’s weekly unemployment benefit rate, then for every $1.00 the unemployed worker earns, the benefit check is reduced by $1.00.

The calculation chart below can be helpful in determining how earnings will affect an unemployed worker’s weekly unemployment benefits:

If the reason a person is unemployed or underemployed in a week is that he or she turned down work an employer offered, the amount the person would have received is counted as if it were actually received in order to determine whether the person was unemployed or underemployed, that is, whether a reduced benefit check is payable.

Examples: If an unemployed worker for unemployment benefits gets a weekly unemployment payment of $200.00, and he or she earns $125.00 for work done in the week, the unemployed worker would be underemployed and could receive a benefit check of $137.00.  If an unemployed worker for unemployment benefits gets a weekly unemployment payment of $200.00, and he or she earns $210.00 for work done in the week, the unemployed worker could receive a benefit check of $90.00.

If an unemployed worker for unemployment benefits gets a weekly unemployment payment of $200.00, and he or she earns $90.00 for work done in the week, but turned down other work for the week that would have paid $50.00 more, the unemployed worker would be regarded as having earned $140.00 for the week ($90.00 + $50.00 = $140.00), and would be entitled to a benefit check of $130.00.

If the unemployed worker does not tell the UIA about the actual earnings, or offered work, for a week, and benefits are overpaid for the week, repayment (restitution) will be required, and fraud penalties will be imposed if it is determined that the unemployed worker intentionally failed to tell the UIA about the earnings.

Proof at the Hearing: The employer or the UIA would have to prove that earnings were received for a week that should have resulted in a lower benefit payment for the week. The unemployed worker may have to prove that the Agency or employer records are wrong. To prove fraud, intention to misrepresent information or to conceal information must be proven.

For Further Help: The Unemployment Insurance Agency (UIA) Advocacy Program can provide assistance to employers and unemployed workers in preparing for Administrative Law Judge and Board of Review hearings on this issue. Call 1-800- 638-3994.

The information on this sheet is intended to provide a general understanding of the subject matter. It does not have the force of law or regulation.