Recent Developments in the
Unemployment Insurance Program
CORT First Friday Webinar – April 16, 2010
Rick McHugh, National Employment Law Project
Anita Myerson, Legal Aid Society of Cleveland
Steve Gray, Michigan Unemployment Insurance Project
Unemployment Insurance:
Federal Extensions and State Reforms
April 2010
Benefits and Extensions
Current Programs
Regular State Benefits—Up to 26 weeks
Emergency Unemployment Compensation
(EUC) benefits—Up to 53 weeks
Tier I (one) 20 weeks
Tier II (two) 14 weeks
Tier III (three) 13 weeks
Tier IV (four) 6 weeks
Extended Benefits (EB)—Up to 20 weeks
99 weeks total potential duration
Extensions—Need for More
A record 5.8 million individuals are receiving
extensions. Many jobless workers are
exhausting existing extensions.
Jobs are not available for those exhausting:
currently 5.5 jobless workers for every job
opening
Congress passed a two-month extension package
on April 15. This only keeps EUC alive, it does
not add more weeks for those exhausting all
benefits
EUC is currently set to start phasing out 5/5/2010,
Congress must extend to avoid another mess
What next? Job creation, unemployment
assistance, hiring subsidies?
UI Modernization Overview
UI modernization (UIMA) encourages states to “do
the right thing” by expanding UI programs
$7 billion total federal incentives, with $2.8 billion
in approval pipeline or paid to state trust funds
Mandatory UIMA Element: Alternative Base Period
(ABP), qualifies state for 1/3 of potential federal
incentive funds for this feature (MI,OH,WV)
In addition to ABP, state must enact 2 of 4
remaining UI modernization elements for
remaining 2/3 of incentive:
part time eligibility (OH)
− UI in training
dependency allowance
− family quits
UIMA in CORT States
To date, 29 states have qualified for full federal
UIMA incentives and 2 states have passed ABP
only (WV,UT)
MI, OH, WV have ABP and will qualify for 1/3 incentive
funding
OH could adopt part time UI eligibility by policy or
amendment (statute is silent)
OH UC Advisory Council could take up UIMA-no bill
MI had two bills HB 4785-4786 provide for UI in
training and part time UI to meet UIMA requirements
These bills have passed Michigan House and remain
pending in Michigan Senate
WV considered and adopted ABP in 2009; was unable
to pass further UIMA implementation in 2010
NELP Contact Information
Visit NELP’s website at www.nelp.org; sign up
for UI email group; keep up to date on
extensions at <unemployedworkers.org> for
updates
Rick McHugh, Staff Attorney, 734.369.5616; cell
734.546.0901; rmchugh@nelp.org
Overpayments & Restitution
(Michigan)
Steve Gray
Michigan Unemployment Insurance Project
OPs and Restitution
Framework in Michigan
•
•
•
•
Statute - MES Act §§ 54 and 62(a)
Fraud v. Non-Fraud
Waivers
Current Issues
– Premature Collection Attempts
– Notice Confusion
• Resources 4 Wonks
UI Fraud in Michigan - § 54
• Fraud Types
– Intentional Failure to Comply
– Knowing Violation of the Law
– Making False Statement or Representation
– Employer Requiring Claimant to make False Statement
– Conspiracy and Embezzlement
• Penalties – If no prosecution and criminal penalties
– Repayment plus 2X or 3X damages
– If file claim within 2 years must have repaid all restitution and
penalties before benefits can be paid.
• Intentional Misrepresentation Fact Sheet – Start Here
Non-Fraud OPs in Michigan - §
62a
• Restitution – if cl. receives “benefits to which they are not entitled the
commission MAY recover those benefits”.
– Direct payments from cl.
– Deducted from future payments
– State Income tax refund intercept
– Court-based collection (rarity)
• 3 Year Limit – cannot collect more than 3 years later unless:
– Fraud or law suit filed within 3 years or…
– Agency issues a determination notifying worker of restitution
• Waiver – if repayment would be contrary to “equity and good conscience”
• Restitution Fact Sheet – Start Here
Restitution Waivers in Michigan
• Agency Error Based Waiver (rarity)
• Financial Hardship Waivers – UIA Form 1795,
Affidavit of Financial Condition
– HHS Poverty Guidelines ($1856 for family of 4)
– UIEs by policy looking for a reason to deny
• UIA Manual, Part V - § 7922, Financial Hardship
Waivers
Restitution Issues in Michigan
• Obtuse Notice Issues – based on primary nature of
restitution language
• Pre-mature Collection Attempts
Overpayments (Ohio)
Anita Myerson
Legal Aid Society of Cleveland
Fraud Overpayments
RC 4141.35(A):
What is a fraud overpayment?
“… any fraudulent misrepresentation has been made by
an applicant for or a recipient of benefits with the object
of obtaining benefits to which the applicant or recipient
was not entitled.” RC 4141.35(A).
• The agency will cancel the weekly claim that was
fraudulently claimed OR the entire benefit rights if the
misrepresentation was in connection with the filing of the
claimant’s application for determination of benefit rights.
RC 4141.35(A)(1).
What happens if a claimant is found to have a
Fraud Overpayment?
•
The overpayment remains ‘on the books’ of the agency for 6 years. RC
4141.35(A)(3)
•
The claimant will also be charged with 2 “penalty weeks” for every week that was
fraudulently claimed. RC 4141.35(A)(2)
•
As a result, the next time that the claimant is otherwise eligible for unemployment
benefits during this 6 year period, the claimant will not be able to receive
unemployment benefits until the overpayment is repaid and until the claimant also
‘serves’ the required number of penalty weeks.
–
For example, if a claimant fraudulently claimed 2 weeks worth of unemployment benefits, the
claimant would have to repay the overpayment amount and would remain ineligible to
receive benefits for an additional 4 weeks as a penalty for filing the fraudulent claims.
•
The claimant will also be charged interest on the overpayment. RC 4141.35(A)(3).
•
The state can initiate a collection action in court to collect a fraudulent overpayment.
A judgment could lead to garnishment of wages and a bank attachment to collect the
fraudulent overpayment. RC 4141.35(A)(4) and (5).
What can a claimant do if charged with a
Fraud Overpayment?
•
The claimant can file an appeal. The claimant can challenge the finding of
fraud and/or the finding of an overpayment.
– If the claimant has an argument that he/she did not commit fraud, it is
important to file a timely appeal of the fraud determination even if there is
no challenge to the existence of the overpayment.
•
The claimant can repay the benefits by cash, check, or offset. But the
claimant would still have to serve penalty weeks.
•
If claimant cannot afford to repay the overpayment and if claimant does not
file for unemployment again during the 6 year period and if the state doesn’t
sue claimant during the 6 year period, the overpayment will be ‘removed
from the books’ after the 6 year period has ended.
•
The claimant’s appeal must be filed within the appeal period listed on
the Determination or Decision which results in the overpayment.
(21 days from issuance of the notice).
Non-Fraud Overpayments
RC 4141.35(B)
• What is a non-fraud overpayment?
– “an applicant for benefits has been credited with a waiting week
or paid benefits to which the applicant was not entitled for
reasons other than fraudulent misrepresentation” RC 4141.35(B)
– The agency may cancel the waiting period and require that
benefits be repaid or withheld from any benefits to which such
applicant is or may become entitled before any additional
benefits are paid. RC 4141.35(B)(1).
• Note waiver provision:
– “repayment or withholding shall not be required where the
overpayment is the result of the director’s correcting a prior
decision due to a typographical or clerical error in the director’s
prior decision, or an error in an employer’s report” under RC
4141.28(G). RC 4141.35(B)(1).
What happens if a claimant is found to have a
Non-Fraud overpayment?
•
•
The overpayment remains ‘on the books’ of the agency for 3 years. RC
4141.35(B)(3).
–
During this 3 year period, the claimant will not be able to receive unemployment benefits
again until the overpayment is repaid. RC 4141.35(B)(1).
–
If claimant is otherwise eligible for unemployment benefits during this 3 year period, claimant
would file weekly claims and the agency would recoup the overpayment until the amount of
the overpayment is repaid.
–
The state will also keep any state tax refund to which claimant may be entitled up to
the amount of the overpayment during this 3 year period.
–
If clamant cannot afford to repay the overpayment and if claimant does not file for
unemployment benefits again during the 3 year period, the overpayment will ‘be removed
from the books’ after the 3 year period has passed.
As the law currently stands, the state will not initiate a collection action to recover a
non-fraudulent overpayment unless claimant has signed an agreement to make
payments.
What can claimant do if charged with a
Non-Fraud overpayment?
•
Claimant can file an appeal. The appeal can challenge: the decision that resulted in
the overpayment, or the amount of the overpayment.
– Waiver requests are also raised in appeals.
– Any appeal must be filed within the appeal deadline listed on that decision.
•
Claimant can repay the benefits with cash or check. If claimant has the ability to
repay the benefits, claimant can repay the overpayment by mailing payment to
ODJFS. Claimant will receive monthly bills that will explain how to repay the benefits.
This information is also found in the “Worker’s Guide to Unemployment Benefits”
which is available on the ODJFS web site http://unemployment.ohio.gov.
•
Claimant can repay the overpayment by ‘offset’. The claimant files weeks and the
benefits otherwise due are used to pay back the overpayment.
Advice to Give Clients to Help them Avoid Being Charged
with Fraud Overpayments
[We have put the following information in a fact sheet for clients]
• Prevent Fraud Overpayments by Reporting Required
Information When You File Your Weekly Claims:
– Report all income from work. This includes gross earnings from work
for the week even if you have not been paid!
– The agency checks unemployment claims against employer wage
reports and will be able to tell if you received wages and did not report
this information.
– If you quit a job, were fired from a job, or refused an offer of work, you
must report this information so the unemployment agency can
determine if it affects your right to benefits.
– Review the material that you receive from the unemployment agency
and listen closely to the questions when you file your weekly claims. If
you have questions, call your unemployment processing center or the
toll free number for unemployment at 1- 877-644-6562.
– As a rule of thumb, only collect unemployment benefits that you are
eligible to receive to avoid a fraudulent overpayment.
Temporary Employment
Issues (Ohio)
Anita Myerson
Legal Aid Society of Cleveland
Continuing Eligibility Issues,
Generally
• Weekly disqualification — disqualified
from UC for only week or weeks affected
– RC 4141.29(A)
– Able, Available, Actively Seeking Work
• Durational disqualification— disqualified
from UC until claimant requalifies [works 6
weeks and earns 6 x qualifying amt;
currently $1278]
– RC 4141.29(D)
Refusal of Suitable Work
• Durational disqualification for refusal of an offer
of suitable work:
– ‘individual has refused without good cause to accept
an offer of suitable work when made by an employer
either in person or to the individual's last known
address…’ RC 4141.29(D)(2(b)
• Subject to exceptions:
– Work offered by individual’s employer and not required to
accept offer pursuant to terms of labor-management contract or
agreement -- §(D)(2)(b)(i)
– Individual attending an approved training course pursuant to §
(A)(4)-- §(D)(2)(b)(ii)
What is Suitable Work?
See: RC 4141.29(E) and (F); UCPG Chapter
Part V Section V111— ‘Suitable work,
Defined’
Also see:
UCPG Part V, Section IX--‘Refusal of Suitable work’
UCPG Part V, Section X– ‘Refused Referral to Suitable
work’
Unable to Obtain Suitable Work
• Weekly disqualification for “unable to obtain
suitable work”
– ‘An individual who is provided temporary work
assignments by the individual’s employer under
agreed terms and conditions of employment, and who
is required pursuant to those terms and conditions to
inquire with the individual’s employer for available
work assignments upon the conclusion of each work
assignment, is not considered unable to obtain
suitable employment if suitable work assignments are
available with the employer but the individual fails to
contact the employer to inquire about work
assignments.’ RC 4141.29(A)(5)
What happens when a temporary worker fails
to contact temporary employer to seek
additional work?
• Failure to contact employer for subsequent work
assignments is at most a weekly
disqualification per RC 4141.29(A)(5)
• Disqualification imposed only if ALL of the following are
established:
– Claimant completed most recent temporary assignment
– Claimant did not inquire with the temporary agency for
available work following completion of assignment
– Employment agreement required the claimant to contact
the temporary agency following the completion of each
work assignment AND
– Suitable work was available to the claimant from the
temporary agency for each work claimed
• See UCPG Part V, Section V, at section (B)(8) and (9
What happens if a Temporary worker
turns down an offer of suitable work?
• If the offer of suitable work is for one week
or less, only a weekly disqualification
should apply
– See UCPG Part V, Section V– “Unable to obtain suitable work lasting
one week or less”; in particular, section (B)(7)
• If the offer of suitable work is for more than
one week, the claim is evaluated as
durational disqualification
– See UCPG Part V, Section V, section (A), page 2
UI Advocacy Efforts within
CORT - Discussion
Steve Gray
Michigan Unemployment Insurance Project
Panelist Contact Details
Rick McHugh, Midwest Coordinator
National Employment Law Project
3131 S. State Street, Suite 302, Ann Arbor, Michigan 48108
(734) 369-5616 - rmchugh@nelp.org
Anita Myerson, Senior Attorney
Legal Aid Society of Cleveland
1223 West 6th St. Cleveland, OH 44113
(216) 861-5607 - Anita.Myerson@lasclev.org
Steve Gray, General Manager
Michigan Unemployment Insurance Project
3131 S. State Street, Suite 302, Ann Arbor, Michigan 48108
(734) 274-4331 x158 - steve@miui.org