Do You Have To Honor A Request By UIA For Repayment Of Unemployment Benefits?

By: Harvey I. Wax, employment and labor attorney

In recent months, over 38,000 Michigan residents have received demands from the Unemployment Insurance Agency (UIA) for repayment of unemployment benefits. The UIA’s repayment requests are for substantial amounts of money, as high as $ 35,000. However, the repayment demands are of questionable legality. Many of the recipients have exhausted the benefits they previously received and cannot afford to repay the State.  How to respond to and contest a repayment request is an issue that is causing and will continue to cause serious concern to many Michiganders. 

UIA initiated the repayment demands early last year, claiming that benefits to approximately 700,000 qualified claimants during the previous 2 years, were disbursed in error, totaling approximately $3.9 billion. It claimed that under new Pandemic Unemployment Assistance (PUA) eligibility rules, the recipients of the funds lost their previously recognized eligibility. The UIA mailed notices to 700,000 people demanding repayment of benefits previously received, advising that the payments had been made in error due to a change in federal eligibility requirements. Because they were out of work due to the pandemic, most of the affected claimants (before receiving the UIA repayment letter) exhausted most or all of the benefits they previously received.

A common reason asserted by UIA for disqualifying claimants many months after it found them qualified, is that due to a recent change in applicable federal qualification regulations, they were actually never qualified for benefits. In several cases, UIA also retroactively and without explanation disqualified claimants for unspecified accusations of “misrepresentation” or “fraud,” both of which constitute criminal acts.  

Formally opposing UIA’s repayment demands in most situations can only be pursued through a formal appeal to an Administrative Law Judge or to the UIA Appeal Commission. To date, such appeals have been met with little success, due to many deficiencies in the operation of the UIA, which include unqualified employees, understaffing, failure to answer its phones, and failure to return telephone messages or to respond to correspondence. The agency is months, even years, behind in the processing of hearing requests. These problems have caused the replacement during the past several months of three UIA Directors and, to date, this turnover has resulted in little, if any, improvement in agency procedures. 

Governor Whitmer and other elected officials have publicly condemned the UIA’s repayment demands and have asked that they be ended, and that outstanding repayment demands be cancelled. This condemnation has been ignored by the agency so far.  

There have been very few successful outcomes for those who have chosen to represent themselves in pursuing appeals for cancellation or reduction of repayment demands. That’s far less true for claimants who have been represented by a knowledgeable employment attorney.    

For example, our firm has obtained favorable rulings from Administrative Law Judges, directing the UIA to cancel individual repayment requests in amounts as high as $17,000 and $20,000.00. 

We’re hopeful that a court or the Legislature currently investigating this problem, will decide to order the cancellation of the UIA repayment demands.  If you’re presently subject to such a demand it would be wise to discount that possibility and instead file an appeal as soon as possible. That’s the best way to protect yourself against further action by the UIA.

Our attorneys are very experienced in discussing and assisting the cancellation of UIA repayment demands. Feel free to contact our employment and labor attorneys in Ann Arbor to discuss your case.