The Michigan Unemployment Insurance Agency (UIA) has received preliminary approval of a class action settlement in a lawsuit by workers who said the agency ordered them to pay back pandemic-era jobless benefits before resolving a protest or appeal. The settlement is a key step in the UIA’s efforts to resolve issues that arose during a national public health crisis and its continued focus on transforming into a national model for fast, fair, and fraud-free service.
UIA will seek Legislative approval of $55 million for a settlement fund. A claims administrator will determine which workers would qualify for payments. The Michigan Court of Claims approved the preliminary settlement in Saunders v Unemployment Ins. Agency et al. on April 25.
“This settlement agreement lets us focus staff and resources on customer service and the reforms we are making at the Unemployment Insurance Agency to benefit Michigan workers and employers alike,” UIA Director Julia Dale said. “Throughout this legal process, the parties worked cooperatively with each other and the court to establish new processes and procedures so Michigan residents won’t find themselves in a similar situation in the future.”
At issue are millions of dollars in benefits that were ordered to be repaid before the UIA could determine whether a wave of protests or appeals were filed on time or filed at all on a rush of claims during the pandemic.
Under the settlement agreement, UIA will refrain from reinitiating attempts to collect overpayments until protest or appeal rights have been exhausted. The agency will also implement a process for workers to seek waivers.
As part of the litigation process, the Court of Claims ordered the UIA to stop most overpayment collections on claims after March 1, 2020, where a worker may have filed a protest or appeal. UIA agreed to put in place remedial actions and reforms before the order pausing collection activity is lifted. The Court will decide when collections resume.
Under the agreement, UIA is not admitting to liability in the case. Workers who join the settlement must agree to release all claims against the UIA.
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