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 for updates
Rick McHugh, Staff Attorney, 734.369.5616; cell 734.546.0901; [email protected]
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 - [email protected]
Anita Myerson, Senior Attorney Legal Aid Society of Cleveland 1223 West 6th St. Cleveland, OH 44113 (216) 861-5607 - [email protected]
Steve Gray, General Manager Michigan Unemployment Insurance Project 3131 S. State Street, Suite 302, Ann Arbor, Michigan 48108 (734) 274-4331 x158 - [email protected]