Deadline nears for Michigan workers to join $20M unemployment fraud settlement

Time is running out for Michigan workers who were wrongly accused of unemployment fraud to participate in a $20 million class action settlement with the state. Michigan Attorney General expressed hope that affected residents would seize this opportunity to join the class settlement, acknowledging that while it cannot undo the hardships they endured, it does provide the long overdue relief they deserve.

It is estimated that payments will be distributed between August 19 and September 8. The settlement, which was reached last year and approved by the Michigan Court of Claims in January, arose from a situation where 40,000 individuals were falsely accused of fraud between 2013 and 2015. The Michigan unemployment system flagged thousands of accounts, leading the agency to garnish wages and seize tax refunds.

In 2019, over $20 million in refunds were issued to those affected. However, workers proceeded to file a lawsuit against the state, alleging that the agency violated their due process rights through unlawful collection efforts. Despite multiple challenges, the Michigan Supreme Court ruled in favor of the plaintiffs twice, and in July 2022, the court allowed plaintiffs to seek monetary redress for violated constitutional rights.

The Michigan UIA Director urged anyone who believes they were affected by these circumstances to register to be considered part of the settlement. The settlement is one of several reforms being implemented by the agency to create a UIA that will serve as a national model for fair, efficient, and fraud-free service.

Workers who meet certain eligibility requirements, including having received a determination or redetermination of “intentional misrepresentation” between October 1, 2013, and August 31, 2015, through the agency’s auto-adjudication process, and having experienced collection efforts on or after March 9, 2015, may be entitled to compensation to recoup their losses and address hardships resulting from the wrongful collection.