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Snyder signs unemployment insurance reforms

Also signs one other bill

Tuesday, Oct. 29, 2013

LANSING, Mich. – Gov. Rick Snyder today signed a package of bills that reforms unemployment insurance in the state, which will help ensure financial assistance gets to those truly in need and improve the process to help reduce fraud.

“These are necessary updates to make sure Michigan is in line with federal requirements,” Snyder said. “They will also help strengthen the unemployment insurance system by reducing fraud.”

The main bills in the package prioritize the prevention and recovery of improperly paid unemployment benefits, bringing Michigan law in line with federal regulations. The measures provide the state with a greater ability to reclaim payments made as a result of fraudulent claims. Additionally, they authorize the state Unemployment Insurance Agency (UIA) to charge an employer for failing to provide required information, and change how recovered funds are credited.

House Bills 4950, 4951, 4953 and 4954 provide the specific updates to meet federal standards.

HB 4950, sponsored by state Rep. Frank Foster, requires employers who fail to provide timely and accurate information to the UIA that result in improper payments to be charged for those payments. It is now Public Act 142 of 2013.

HB 4951, also sponsored by Foster, revises the way money recovered from unemployment benefit fraud investigations is allocated. It requires 15 percent of the amount recovered in the form of fraud penalties to be credited to the UI Trust Fund, while the remaining 85 percent will continue to be deposited into the penalty and interest account. It is now PA 143.

HB 4953, sponsored by state Rep. Ken Goike, removes existing provisions that consider benefit payments properly paid if the employer fails to provide opposing information within 10 days of a monetary determination or a request for additional information. Charges to an employers’ account will now follow provisions in HB 4950 if an employer has a pattern of failing to respond with timely or adequate information. It is now PA 144.

HB 4954, also sponsored by Goike, provides the technical changes necessary to allocate money recovered from unemployment benefit fraud investigations as required by HB 4951. It is now PA 145.

Two other bills in the package enact additional requirements unrelated to federal requirements to help reduce improper unemployment insurance benefit payments.

HB 4952, sponsored by Goike, establishes a pilot program to permit employers to report to UIA if an individual seeking work refuses a drug test or fails a drug test. The individual would be disqualified from receiving unemployment benefits. The program will sunset after one year and the Legislature can decide whether to reauthorize. It is now PA 146.

HB 4949, sponsored by Foster, cancels a benefit year as of the date the claimant committed fraud, rather than the date the UIA became aware of the fraud. This bill also waives recovery of improperly paid unemployment benefits if the payment was the result of administrative error, lack of employer wage information, or the person is in poverty. It is now PA 147.

Additionally, the governor signed HB 4289, sponsored by state Rep. Aric Nesbitt. The bill provides audit clarity and transparency to small-business owners who maintain proper records and file tax returns on time. The reform will give taxpayers and state auditors better guidance before and during the audit process. It is now PA 148.

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