State Rep. Jack O’Malley has sent a letter to state Unemployment Insurance Agency Director Julia Dale calling for needed safeguards for people who have received overpayments due to state errors.

The second-term legislator highlighted communications he has had with many people throughout northern Michigan who have been contacted by the agency regarding the overpayments. Despite phone conversations with UIA employees that leave them with the impression they will not have to pay anything back, O’Malley said individuals have still received letters indicating they actually owe thousands or tens of thousands of dollars back to the state.

In some cases, the threat of wage garnishment to secure re-payments is floated, which leads to confusion and concern among many caught up in these situations through no fault of their own. O’Malley is asking UIA to quickly identify claimants who are eligible for overpayment waivers, waive their remaining balance and provide them with a legal letter or some form of binding documentation to confirm a resolved matter.

“Right now, the only way for a claimant to resolve their overpayment issue is to file a protest with UIA,” O’Malley says in the letter. “Frequently, this process takes several months and the threatening letters from UIA persist despite the guarantees made by faceless and nameless individuals on the other end of the phone. It seems fair to say that a proactive step needs to be taken to resolve this lingering issue: the burden should not rest on the individual claimants to resolve an issue due to a mistake made by the state.”

“This is about clarity and providing people with peace of mind, instead of continuing to let them twist in the wind while the agency unpacks this snafu. Something on paper provides finality and key documentation. It’ll go a long way for a lot of people.”

Many workers, including self-employed individuals and gig workers, who were authorized by the state to receive unemployment under expanded federal rules during the pandemic were informed weeks and months later of their ineligibility. An Auditor General report recently disclosed UIA paid roughly $3.9 billion in improper benefits after including Pandemic Unemployment Assistance criteria that was not federally complaint. The agency continued to include it on its pandemic assistance application for nine months after it was first warned by the U.S. Department of Labor.

The result of the mistake has been overpayment notices sent out by the agency, leading to confusion, hassle and uncertainty.

O’Malley has offered legislation as part of a plan to reform UIA. House Bill 5552 creates an Unemployment Insurance Advocate office for citizens, employers and representatives of employers. The office will establish procedures for receiving and processing complaints, answer questions people may have and report findings of investigations done into a determination or procedure. The bill passed the House with bipartisan support in January and currently is under consideration in the Senate Economic and Small Business Development Committee.

UIA Letter As PDF

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