Roughly 350,000 Michigan workers who improperly received a total of $2.7 billion in unemployment benefits over the past five years will receive notices from the state this week that they have to pay back that money.
Many of the cases date back to 2020 during widespread unemployment in the COVID-19 crisis. Collection efforts were paused by a class action lawsuit filed by people who were mistakenly told they owed the state money. In some instances, wages were wrongly garnished or tax refunds seized. The state paid $55 million to settle that case. Now, the pause is lifted on efforts to recover overpayments, many dating back five years.
“We understand the impact these collections will have on household budgets,” said Michigan Unemployment Insurance Agency Director Jason Palmer, who said people can still apply for hardship waivers.
“At the same time, we are legally obligated under the Michigan Employment Security Act to seek repayment and we must fulfill our responsibility to ensure taxpayer money is returned to the Unemployment Insurance Trust Fund, so workers can count on money being available if they need it in the future,” he said in a statement.
The pause officially ends on Friday and the first payments are due on September 29.
