18 MiMfg Magazine October 2017
MMA Offers Solutions as Employer Frustrations Deepen with UIA
Fraud is a serious problem facing Michigan ’ s unemployment insurance system . Whether it is the identity thieves that plague the system with imposter claims or the incorrect determination of fraud toward innocent individuals , fraud is an issue that has afflicted the Unemployment Insurance Agency ’ s ( UIA ) system in recent years ; one which has left employers on the hook for millions .
“ Employers have been bombarded with an explosion of imposter claims in the last three years ,” says Delaney McKinley , MMA senior director of government affairs and membership . “ While employers struggle to help employees who have fallen victim to this scam and ensure their company ’ s account is not charged for the fraudulent benefits , we ’ ve seen little action from the UIA to prevent or correct the problem .”
Identifying the Problem
The frustrations of employers continue to grow , with new issues popping up before solutions are put in place for existing problems . Over the last four years , employers have reported serious concerns with the state ’ s UI system on issues including :
• A lack of system security allowing identity thieves access to worker data to assist in the filing of thousands of imposter claims for unemployment benefits , hurting employers and employees alike
• Slow or nonexistent communication with the UIA to prevent payments going out to identity thieves , often resulting in benefits being paid despite confirmation of identity theft
• Reports from thousands of employers of accusations by the UIA of failure to respond to inquiries in a timely or adequate manner and an unclear and time-consuming process for protesting what were often inaccurate complaints
Meanwhile , advocates have decried problems with the system from their perspective , including :
• Michigan ’ s extreme 400 percent penalty to unemployment fraud
being uncollectible in almost all cases and a deterrent for individuals to even attempt to repay the judgement
• Michigan ’ s current 1 percent monthly interest on overpayments not involving fraud as a deterrent from repayment of UI restitution
• Current agency policy restricting those accused of fraud from taking part in the UIA ’ s program to provide free assistance to employers and claimants at hearings
• Claimants not receiving notice of fraud determinations during the period from 2013 to 2015 when tens of thousands of false fraud determinations were issued
• Little to no details on how the UIA should determine if a person qualifies for a waiver of restitution or interest repayments if contrary to equity and good conscience
Instances of fraud have affected MMA member companies of all sizes , countless other businesses and even state employees . Earlier this year , Michelle Beebe , former director of Utah ’ s Unemployment Insurance Division , took the helm of Michigan ’ s UIA and the organization underwent a top-to-bottom restructuring to address the complaints of fraud and poor customer service . The long-time leadership team that oversaw the UIA as these problems compounded was removed and replaced .
“ We ’ ve had encouraging conversations with Director Beebe and her new leadership team ,” says McKinley . “ While the new UIA management repairs internal processes , clarifies communications and properly trains staff , we at MMA are working on statutory solutions to ensure that these problems never happen again .”
MMA Comes to the Table
Beginning in March 2017 , a bipartisan workgroup comprised of elected officials , legislative staff , business community representatives , claimant advocates and UIA leadership began meeting to identify legislative solutions to the problems plaguing the UIA .
MMA was appointed to the workgroup by House Speaker Tom Leonard to represent the interests of Michigan ’ s manufacturing sector . During the process , MMA fought for strong reforms to curb the proliferation of imposter claims , to prevent fraud and to ensure fair treatment of employers with regard to noncompliance determinations .