What the law says: This issue is covered in Section 15(b) of the Michigan Employment Security Act. The law requires UIA to bill an employer for delinquent unemployment taxes, interest, and penalties.

The determination that an employer owes such amounts to the Agency is called an "assessment." An employer can disagree with the amount of the assessment determination, and can protest and appeal the assessment determination.

The law authorizes UIA to collect assessments through a variety of methods, including placing a tax lien on the employer's property, seizing of the employer's assets, and the filing of a law suit.

When an employer makes a payment to UIA , the payment is applied first to the oldest calendar quarter for which any payment is owed to UIA, then to the next oldest, and so on. Within a calendar quarter, UIA first applies a payment to penalties, then to interest, then to solvency taxes owing, if any, then to the non-chargeable benefits account, and finally to the remaining tax owed.

Examples: An employer receives an assessment saying that the employer owes a certain amount to UIA for unpaid taxes, interest, and penalties. However, the employer believes that he/she made the payments to cover the amount UIA says is owing. The employer can protest or appeal this determination. The employer must then provide UIA with copies of the canceled checks to show that they paid UIA the amount in question. If an assessment redetermination is issued and the employer is still dissatisfied, he or she can appeal the assessment amount to an Administrative Law Judge.

Sometimes, though, an employer will protest or appeal an assessment, because the employer believes the business should not be considered a "successor" to the former business or should not become responsible for the unemployment tax rate of the prior owner. The disagreement here is not actually with the amount of the assessment, but rather with the "successorship" issue. Therefore, protesting the assessment will not change the amount of the assessment.

In this example, it is the determination of successorship that should have been protested, not the determination of assessment. (But usually, by the time the determination of assessment is issued, it is too late to protest the determination of successorship.)

Proof at the Hearing: The UIA has the burden of proving the accuracy of the amount of the assessment. The employer can bring business records to show that the amount of the assessment is wrong (but not to show that the employer should not have been considered a liable or a successor employer or that the tax rate was incorrect).

For Further Help: The Unemployment Insurance Agency (UIA) Advocacy Program can provide assistance to employers 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.