Bill Text: MI HB4982 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Employment security; administration; unemployment insurance benefit claims; require additional notice and examination for fraud determination. Amends secs. 32a, 54 & 62 of 1936 (Ex Sess) PA 1 (MCL 421.32a et seq.).
Spectrum: Bipartisan Bill
Status: (Passed) 2016-12-31 - Assigned Pa 522'16 [HB4982 Detail]
Download: Michigan-2015-HB4982-Introduced.html
HOUSE BILL No. 4982
October 13, 2015, Introduced by Reps. Victory, Pagel, Kivela, Garcia, Glardon, Somerville, Hughes, Hooker, Price, Canfield, Iden, McCready, Clemente, Faris, Hovey-Wright, Brinks, Poleski, Schor, Jacobsen, Darany, Hoadley, Yonker, Franz, Webber, Leutheuser, Rendon, Santana, Johnson, McBroom, Aaron Miller, Runestad, Brett Roberts, Inman, Barrett, Theis, Lucido, Forlini, Sheppard, LaFontaine, Glenn, Kosowski, Howrylak, Bizon, Chatfield, Crawford, Pscholka, Rutledge, Brunner, Smiley, Durhal, Maturen, Heise, Jenkins, Vaupel, Garrett, Bumstead, LaVoy, Cole, Potvin, Townsend, Zemke, Love, Dianda, Robinson, Byrd, Outman, Goike, Graves, Derek Miller, Tedder, Guerra, Singh, Kelly, Yanez, Cochran, Gay-Dagnogo, Banks, Wittenberg, Talabi, Sarah Roberts, Pagan, Lauwers, Irwin and Kesto and referred to the Committee on Oversight and Ethics.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending sections 32a, 54, and 62 (MCL 421.32a, 421.54, and
421.62), section 32a as amended by 2011 PA 269, section 54 as
amended by 2013 PA 143, and section 62 as amended by 2013 PA 147.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 32a. (1) Upon application by an interested party for
review of a determination, upon request for transfer to an
administrative law judge for a hearing filed with the unemployment
agency within 30 days after the mailing or personal service of a
notice of determination, or upon the unemployment agency's own
motion within that 30-day period, the unemployment agency shall
review any determination. After review, the unemployment agency
shall issue a redetermination affirming, modifying, or reversing
the prior determination and stating the reasons for the
redetermination, or may in its discretion transfer the matter to an
administrative law judge for a hearing. If a redetermination is
issued, the unemployment agency shall promptly notify the
interested parties of the redetermination, the redetermination is
final unless within 30 days after the mailing or personal service
of a notice of the redetermination an appeal is filed with the
unemployment agency for a hearing on the redetermination before an
administrative law judge in accordance with section 33.
(2) The unemployment agency may, for good cause, including any
administrative clerical error, reconsider a prior determination or
redetermination after the 30-day period has expired and after
reconsideration issue a redetermination affirming, modifying, or
reversing the prior determination or redetermination, or transfer
the matter to an administrative law judge for a hearing. A
reconsideration shall not be made unless the request is filed with
the unemployment agency, or reconsideration is initiated by the
unemployment agency with notice to the interested parties, within 1
year from the date of mailing or personal service of the original
determination on the disputed issue.
(3) If an interested party fails to file a protest within the
30-day period and the unemployment agency for good cause
reconsiders a prior determination or redetermination and issues a
redetermination, a disqualification, or an ineligibility imposed
thereunder, other than an ineligibility imposed due to receipt of
retroactive pay, the redetermination, disqualification, or
ineligibility does not apply to a compensable period for which
benefits were paid or are payable unless the benefits were obtained
as a result of an administrative clerical error, a false statement,
or a nondisclosure or misrepresentation of a material fact by the
claimant. However, the redetermination is final unless within 30
days after the date of mailing or personal service of the notice of
redetermination an appeal is filed for a hearing on the
redetermination before an administrative law judge in accordance
with section 33.
(4) In addition to the transfer provisions in subsections (1)
and (2), both of the following apply:
(a) If both the claimant and the employer agree, the matter
may be transferred directly to an administrative law judge in a
case involving the payment of unemployment benefits.
(b) If both the unemployment agency and the employer agree,
the matter may be transferred directly to an administrative law
judge in a case involving unemployment contributions or
reimbursements in lieu of contributions.
(5) Notwithstanding the appeal periods in subsections (1) and
(3), if a determination or redetermination includes a finding of
fraud with the assessment of a fine and the claimant or employer
does not respond to the first notification, the unemployment agency
shall send a second notification by certified mail indicating that
the person has 30 days to appeal the determination or
redetermination before the fine begins to accrue.
Sec. 54. (a) A person, including a claimant for unemployment
benefits, an employing entity, or an owner, director, or officer of
an employing entity, who willfully violates or intentionally fails
to comply with any of the provisions of this act, or a regulation
of the unemployment agency promulgated under the authority of this
act for which a penalty is not otherwise provided by this act is
subject to the following sanctions, notwithstanding any other
statute of this state or of the United States:
(i) If the unemployment agency determines that an amount has
been obtained or withheld as a result of the intentional failure to
comply with this act, the unemployment agency may recover the
amount obtained as a result of the intentional failure to comply
plus damages equal to 3 times that amount.
(ii) The unemployment agency may refer the matter to the
prosecuting attorney of the county in which the alleged violation
occurred for prosecution. If the unemployment agency has not made
its own determination under subdivision (i), the recovery sought by
the prosecutor shall include the amount described in subdivision
(i) and shall also include 1 or more of the following penalties:
(A) Subject to redesignation under subsection (l), if the
amount obtained or withheld from payment as a result of the
intentional failure to comply is less than $25,000.00, then 1 of
the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is $25,000.00 or more
but less than $100,000.00, then 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(C) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is more than
$100,000.00, then 1 of the following:
(I) Imprisonment for not more than 5 years.
(II) The performance of community service of not more than 5
years but not to exceed 10,400 hours.
(III) A combination of (I) and (II) that does not exceed 5
years.
(iii) If the unemployment agency determines that an amount has
been obtained or withheld as a result of a knowing violation of
this act, the unemployment agency may recover the amount obtained
as a result of the knowing violation and may also recover damages
equal to 3 times that amount.
(iv) The unemployment agency may refer a matter under
subdivision (iii) to the prosecuting attorney of the county in
which the alleged violation occurred for prosecution. If the
unemployment agency has not made its own determination under
subdivision (iii), the recovery sought by the prosecutor shall
include the amount described in subdivision (iii) and shall also
include 1 or more of the following penalties:
(A) Subject to redesignation under subsection (l), if the
amount obtained or withheld from payment as a result of the knowing
violation is $100,000.00 or less, then 1 of the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the knowing violation is more than $100,000.00, then 1 of
the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(b) Any employing unit or an owner, director, officer, or
agent of an employing unit, a claimant, an employee of the
unemployment agency, or any other person who makes a false
statement or representation knowing it to be false, or knowingly
and willfully with intent to defraud fails to disclose a material
fact, to obtain or increase a benefit or other payment under this
act or under the unemployment compensation law of any state or of
the federal government, either for himself or herself or any other
person, to prevent or reduce the payment of benefits to an
individual entitled thereto or to avoid becoming or remaining a
subject employer, or to avoid or reduce a contribution or other
payment required from an employing unit under this act or under the
unemployment compensation law of any state or of the federal
government, as applicable, is subject to administrative fines and
is punishable as follows, notwithstanding any other penalties
imposed under any other statute of this state or of the United
States:
(i) If the amount obtained as a result of the knowing false
statement or representation or the knowing and willful failure to
disclose a material fact is less than $500.00, the unemployment
agency may recover the amount obtained as a result of the knowing
false statement or representation or the knowing and willful
failure to disclose a material fact and may also recover damages
equal to 2 times that amount. For a second or subsequent violation
described in this subdivision, the unemployment agency may recover
damages equal to 4 times the amount obtained.
(ii) If the amount obtained as a result of the knowing false
statement or representation or the knowing and willful failure to
disclose a material fact is $500.00 or more, the unemployment
agency shall attempt to recover the amount obtained as a result of
the knowing false statement or representation or the knowing and
willful failure to disclose a material fact and may also recover
damages equal to 4 times that amount. The unemployment agency may
refer the matter to the prosecuting attorney of the county in which
the alleged violation occurred for prosecution. If the unemployment
agency has not made its own determination under this subdivision,
the recovery sought by the prosecutor shall include the amount
described in this subdivision and shall also include 1 or more of
the following penalties if the amount obtained is $1,000.00 or
more:
(A) Subject to redesignation under subsection (l), if the
amount obtained or withheld from payment as a result of the knowing
false statement or representation or the knowing and willful
failure to disclose a material fact is $1,000.00 or more but less
than $25,000.00, then 1 of the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the knowing false statement or representation or the
knowing and willful failure to disclose a material fact is
$25,000.00 or more, then 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(C) If the knowing false statement or representation or the
knowing and willful failure to disclose a material fact made to
obtain or withhold an amount from payment does not result in a loss
to the commission, then a recovery shall be sought equal to 3 times
the amount that would have been obtained by the knowing false
statement or representation or the knowing and willful failure to
disclose a material fact, but not less than $1,000.00, and 1 of the
following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(c) (1) Any employing unit or an owner, director, officer, or
agent of an employing unit or any other person failing to submit,
when due, any contribution report, wage and employment report, or
other reports lawfully prescribed and required by the unemployment
agency shall be subject to the assessment of an administrative fine
for each report not submitted within the time prescribed by the
unemployment agency, as follows: In the case of contribution
reports not received within 10 days after the end of the reporting
month the fine shall be 10% of the contributions due on the reports
but not less than $5.00 or more than $25.00 for a report. However,
if the tenth day falls on a Saturday, Sunday, legal holiday, or
other unemployment agency nonwork day, the 10-day period shall run
until the end of the next day that is not a Saturday, Sunday, legal
holiday, or other unemployment agency nonwork day. In the case of
all other reports referred to in this subsection, the fine shall be
$10.00 for a report.
(2) Notwithstanding subdivision (1), any employer or an owner,
director, officer, or agent of an employer or any other person
failing to submit, when due, any quarterly wage detail report
required by section 13(2), or submitting an incomplete or erroneous
report, is subject to an administrative fine of $50.00 for each
untimely report, incomplete report, or erroneous report if the
report is filed not later than 30 days after the date the report is
due, $250.00 if the report is filed more than 1 calendar quarter
after the date the report is due, and an additional $250.00 for
each additional calendar quarter that the report is late, except
that no penalty shall apply if the employer files a corrected
report within 14 days after notification of an error by the agency.
(3) If a report is filed after the prescribed time and it is
shown to the satisfaction of the commission that the failure to
submit the report was due to reasonable cause, a fine shall not be
imposed. The assessment of a fine as provided in this subsection
constitutes a final determination unless the employer files an
application with the unemployment agency for a redetermination of
the assessment in accordance with section 32a.
(d) If any employee or agent of the unemployment agency or
member of the Michigan compensation appellate commission willfully
discloses confidential information obtained from any employing unit
or individual in the administration of this act for any purpose
inconsistent with or contrary to the purposes of this act, or a
person who obtains a list of applicants for work or of claimants or
recipients of benefits under this act uses or permits use of that
list for a political purpose or for a purpose inconsistent with or
contrary to the purposes of this act, he or she is guilty of a
misdemeanor punishable by imprisonment for not more than 90 days or
a fine of not more than $1,000.00, or both. Notwithstanding the
preceding sentence, if any unemployment agency employee, agent of
the unemployment agency, or member of the Michigan compensation
appellate commission knowingly, intentionally, and for financial
gain, makes an illegal disclosure of confidential information
obtained under section 13(2), he or she is guilty of a felony,
punishable by imprisonment for not more than 1 year and 1 day.
(e) A person who, without proper authority from the
unemployment agency, represents himself or herself to be an
employee of the unemployment agency for the purpose of securing
information regarding the unemployment or employment record of an
individual is guilty of a misdemeanor punishable by imprisonment
for not more than 90 days or a fine of not more than $1,000.00, or
both.
(f) A person associated with a college, university, or public
agency of this state who makes use of any information obtained from
the unemployment agency in connection with a research project of a
public service nature, in a manner as to reveal the identity of any
individual or employing unit from or concerning whom the
information was obtained by the unemployment agency, or for any
purpose other than use in connection with that research project, is
guilty of a misdemeanor punishable by imprisonment for not more
than 90 days or a fine of not more than $1,000.00, or both.
(g) As used in this section, "person" includes an individual;
owner, director, or officer of an employing entity; copartnership;
joint venture; corporation; receiver; or trustee in bankruptcy.
(h) This section applies even if the amount obtained or
withheld from payment has been reported or reported and paid by an
individual involved in a violation of subsection (a) or (b).
(i) If a determination is made that an individual has violated
this section, the individual is subject to the sanctions of this
section and, if applicable, the requirements of section 62.
(j) Amounts recovered by the commission under subsection (a)
shall be credited first to the unemployment compensation fund and
thereafter amounts recovered that are in excess of the amounts
obtained or withheld as a result of the violation of subsection (a)
shall be credited to the penalty and interest account of the
contingent fund. Amounts recovered by the commission under
subsections (c), (d), (e), and (f) shall be credited to the penalty
and interest account of the contingent fund in accordance with
section 10(6).
(k) Amounts recovered by the unemployment agency under
subsection (b) shall be credited in the following order:
(i) From the penalty assessment recovered, an amount equal to
15% of any benefit overpayments resulting from fraud shall be
credited to the unemployment compensation fund.
(ii) For the balance of deductions from unemployment insurance
benefits, to the liability for benefit repayment under this
section.
(iii) For all other recoveries, the balance shall first be
credited to the unemployment compensation fund for repayment of any
remaining amounts owed, and then to the contingent fund to be
applied first to administrative sanctions and damages and then to
interest.
(l) A person who obtains or withholds an amount of
unemployment benefits or payments exceeding $3,500.00 but less than
$25,000.00 as a result of a knowing false statement or
representation or the knowing and willful failure to disclose a
material fact is guilty of a felony punishable as provided in
subsection (a)(ii)(A) or (iv)(A) or subsection (b)(ii)(A).
(m) An unemployment agency determination under this section
shall not be based solely on a computer-identified discrepancy in
information supplied by the claimant and employer. An unemployment
agency employee or agent must examine the situation to verify that
the claimant or the employer is responsible for a willful or
intentional violation before the agency makes a determination under
this section.
Sec. 62. (a) If the unemployment agency determines that a
person has obtained benefits to which that person is not entitled,
or a subsequent determination by the agency or a decision of an
appellate authority reverses a prior qualification for benefits,
the agency may recover a sum equal to the amount received plus
interest by 1 or more of the following methods: deduction from
benefits or wages payable to the individual, payment by the
individual in cash, or deduction from a tax refund payable to the
individual as provided under section 30a of 1941 PA 122, MCL
205.30a. Deduction from benefits or wages payable to the individual
is limited to not more than 50% of each payment due the claimant.
The unemployment agency shall issue a determination requiring
restitution within 3 years after the date of finality of a
determination, redetermination, or decision reversing a previous
finding of benefit entitlement. The unemployment agency shall not
initiate administrative or court action to recover improperly paid
benefits from an individual more than 3 years after the date that
the last determination, redetermination, or decision establishing
restitution is final. The unemployment agency shall issue a
determination on an issue within 3 years from the date the claimant
first received benefits in the benefit year in which the issue
arose, or in the case of an issue of intentional false statement,
misrepresentation, or concealment of material information in
violation of section 54(a) or (b) or sections 54a to 54c, within 6
years after the receipt of the improperly paid benefits unless the
unemployment agency filed a civil action in a court within the 3-
year or 6-year period; the individual made an intentional false
statement, misrepresentation, or concealment of material
information to obtain the benefits; or the unemployment agency
issued a determination requiring restitution within the 3-year or
6-year period. Except in a case of an intentional false statement,
misrepresentation, or concealment of material information, the
unemployment agency shall waive recovery of an improperly paid
benefit if the payment was not the fault of the individual and if
repayment would be contrary to equity and good conscience and shall
waive any interest. If the agency or an appellate authority waives
collection of restitution and interest, except as provided in
subdivision (ii), the waiver is prospective and does not apply to
restitution and interest payments already made by the individual.
As used in this subsection, "contrary to equity and good
conscience" means any of the following:
(i) The claimant provided incorrect wage information without
the intent to misrepresent, and the employer provided either no
wage information upon request or provided inaccurate wage
information that resulted in the overpayment.
(ii) The claimant's disposable household income, exclusive of
social welfare benefits, is at or below the annual update of the
poverty guidelines most recently published in the federal register
by the United States department of health and human services under
the authority of 42 USC 9902(2), and the claimant has applied for a
waiver under this subsection. A waiver granted under the conditions
described in this subdivision applies from the date the application
is filed.
(iii) The improper payments resulted from an administrative or
clerical error by the unemployment agency. A requirement to repay
benefits as the result of a change in judgment at any level of
administrative adjudication or court decision concerning the facts
or application of law to a claim adjudication is not an
administrative or clerical error for purposes of this subdivision.
(b) For benefit years beginning on or after October 1, 2000,
if the unemployment agency determines that a person has
intentionally made a false statement or misrepresentation or has
concealed material information to obtain benefits, whether or not
the person obtains benefits by or because of the intentional false
statement, misrepresentation, or concealment of material
information, the person shall, in addition to any other applicable
interest and penalties, have his or her rights to benefits for the
benefit year in which the act occurred canceled as of the date the
claimant made the false statement or misrepresentation or concealed
material information, and wages used to establish that benefit year
shall not be used to establish another benefit year. A chargeable
employer may protest a claim filed after October 1, 2014 to
establish a successive benefit year under section 46(c), if there
was a determination by the unemployment agency or decision of a
court or administrative tribunal finding that the claimant made a
false statement, made a misrepresentation, or concealed material
information related to his or her report of earnings for a
preceding benefit year claim. If a protest is made, any unreported
earnings from the preceding benefit year that were falsely stated,
misrepresented, or concealed shall not be used to establish a
benefit year for a successive claim. Before receiving benefits in a
benefit year established within 4 years after cancellation of
rights to benefits under this subsection, the individual, in
addition to making the restitution of benefits established under
subsection (a), may be liable for an additional amount as otherwise
determined by the unemployment agency under this act, which may be
paid by cash, deduction from benefits, or deduction from a tax
refund. The individual is liable for any fee the federal government
imposes with respect to instituting a deduction from a federal tax
refund. Restitution resulting from the intentional false statement,
misrepresentation, or concealment of material information is not
subject to the 50% limitation provided in subsection (a).
(c) Any determination made by the unemployment agency under
this section is final unless an application for a redetermination
is filed in accordance with section 32a.
(d) The unemployment agency shall take the action necessary to
recover all benefits improperly obtained or paid under this act,
and to enforce all interest and penalties under subsection (b). The
unemployment agency may conduct an amnesty program for a designated
period under which penalties and interest assessed against an
individual owing restitution for improperly paid benefits may be
waived if the individual pays the full amount of restitution owing
within the period specified by the agency.
(e) Interest recovered under this section shall be deposited
in the contingent fund.
(f) An unemployment agency determination that a claimant made
an intentional false statement, misrepresentation, or concealment
of material information that invokes sanctions under this section
shall not be based solely on a computer-identified discrepancy in
information supplied by the claimant and employer. An unemployment
agency employee or agent must examine the situation to verify that
the claimant or the employer is responsible for a willful or
intentional violation before the agency makes a determination under
this section.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
