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 $9,500 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.

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.

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. 

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 at least one quarter in which they earned a minimum of $3,830, just have wages in at least two calendar quarters in the base period, and the total base period wages must equal 1.5 times the high quarter wages.

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.

About the Unemployment Insurance Agency

• UIA Mission:  "Through teamwork, we serve as stewards and leaders in the customer centric delivery of Michigan's unemployment insurance program and we do so with integrity and efficiency."
• UIA Vision: "UIA will deliver high quality, innovative unemployment services to our customers through an experienced and dedicated team of professionals."
• UIA Values: Integrity, Team, Customer-Centric, Stewardship

We offer an array of convenient on-line services to unemployed workers and to employers. Unemployed workers may file unemployment claims online or by telephone, while employers may file claims for their workers in mass layoffs.