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Labor and Economic Opportunity

Unemployment Insurance Agency reaches agreement in suit over computer-determined fraud cases

Agreement codifies reforms intended to improve services to residents

LANSING, Mich. – The Unemployment Insurance Agency has reached an agreement with plaintiffs in a U.S. Federal Court suit over the agency’s former practice of using a computer to identify cases of fraud and assess penalties.

The agreement codifies practices that were put in place after the agency ceased auto adjudicating potential fraud cases in August 2015.

“We’re glad to bring this matter to a close,” said Wanda M. Stokes, director of the Talent Investment Agency, which oversees the Unemployment Insurance Agency.

“It’s important to note that this agreement reflects many of the reforms and changes that this agency has set in place since 2015. Our focus remains on our customers, and improving our service to them as they work through a very difficult time in their lives. We want to make sure people get the benefits to which they are entitled and remain vigilant against fraud, which hurts both residents and employers.”

The case was filed on behalf of several residents from Wayne, Oakland and Washtenaw counties, with the Detroit-based Sugar Law Center also listed as a plaintiff.

UIA staff is reviewing about 50,000 cases affecting about 40,000 residents, with fraud determinations filed between October 2013 and August 2015, when the agency moved to require trained staff to review all potential fraud cases.

UIA will continue to conduct investigations consistent with U.S. Department of Labor standards, as it has been doing since 2015.

The agency will continue to make all reasonable attempts to contact people who have filed claims, and will issue fraud determinations through mail in addition to email.

UIA will continue to ensure that wage records received by an employer are provided in a manner that allows the agency to attribute wages to a particular week.  In doing so, this provides the agency an opportunity to confirm a claimant’s wages that he or she enters on an application. 

The agency will continue working to revise its forms to better communicate with employers and people filing claims and send forms that clearly explain the rights and responsibilities of collecting unemployment.

UIA also will continue delaying collection efforts while the appeal of a fraud determination is pending.

Stokes last month announced a three-part plan to make the UIA more effective and efficient, including a top-to-bottom review of all operations, a focus on improving customer service and continually working to improve the practices related to identifying fraud.

Stokes discusses the fraud determinations and the process moving forward in this video.