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Volume X, Number 194

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July 09, 2020

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Unemployment Benefits: Six Things Michigan Employers Should Know

The COVID-19 pandemic and the accompanying economic downturn have placed many employers in difficult and unprecedented circumstances. This advisory summarizes unemployment benefit issues unique to the pandemic period.

1. When are Michigan employees entitled to unemployment benefits?

Individuals are entitled to benefits if they are no longer working through no fault of their own and are able and available to work. During the COVID-19 pandemic, Michigan has waived work search requirements for unemployed individuals. Unemployment benefits are generally not available to individuals who have the ability to work from home (or telework) and are not available to individuals who are receiving paid sick leave or other paid leave benefits. An employee who refuses to come to work, when work is available, due to fear of exposure to the virus, is not entitled to unemployment benefits.

Quitting work without good cause in order to obtain unemployment benefits is fraud, and Michigan's Unemployment Insurance Agency (UIA) may pursue action against fraudulent claimants.  Employers also have a duty to truthfully respond to requests for information received from the UIA and may be subject to fraud actions for intentionally helping individuals pursue benefits to which they are not entitled.

2. When are Michigan employees entitled to underemployment benefits?

Underemployment occurs when a worker is employed, but his/her hours or wages have been reduced for reasons other than the worker's request. Such employees may be eligible for unemployment benefits under certain circumstances. An underemployed claimant must report all gross earnings to the UIA each week through the UIA's online portal, and the claimant will receive a reduced weekly benefit depending on his/her earnings during the claimed week. In any week the claimant's earnings equal or exceed 1.5 times the claimant's weekly unemployment benefit amount, the claimant will not receive a benefit payment for that week.

3. Which employees will be eligible to receive the additional federal $600 unemployment benefit?

The CARES Act provides for a temporary emergency increase in unemployment compensation benefits, termed Federal Pandemic Unemployment Compensation (FPUC). This program provides an additional $600 per week to individuals who are collecting unemployment, including individuals who receive benefits through the Work Share program or underemployment. If the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the individual will receive the full $600 FPUC.

This means that individuals who typically receive underemployment benefits will not be eligible for FPUC in any claimed week in which they earn too much to qualify for the underlying underemployment benefit.

4. What must Michigan employers provide to separated employees when conducting layoffs?

If the separated employee is eligible for unemployment benefits, employers should provide an Unemployment Compensation Notice to Employees upon separation. This notice is Michigan UIA Form 1711 and was updated in March 2020 with information specific to the COVID-19 pandemic. For questions about whether Worker Adjustment and Retraining Notification Act protections may apply to your workplace, please contact any member of Varnum's labor and employment team.

5. May employers contest unemployment claims made by employees?

Yes. Employers may contest unemployment claims if the employer believes that the employee should not receive benefits. Protest instructions are located on the monetary determination letter the employer receives informing of the claimant name and amount of weekly benefit.

6. Are employees on layoff or furlough entitled to sick or family leave benefits under the Families First Coronavirus Response Act (FFCRA)?

No. Employees who are no longer able to work because they have been furloughed or laid off, or because their worksite is closed, are not entitled to take paid sick leave or expanded family and medical leave under the FFCRA. Similarly, if an employee's work hours have been reduced because there is not enough work for him or her to perform, the employee may not use paid sick leave or expanded family and medical leave for the hours that he or she is no longer scheduled to work.

However, if an employer recalls such employees to work before the December 31, 2020 expiration of the  FFCRA, and they meet one of the criteria to receive paid sick leave or expanded family and medical leave, they may be entitled to these benefits.  Employers should review all documentation provided by the employee in order to approve such request.

© 2020 Varnum LLPNational Law Review, Volume X, Number 113

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About this Author

Kimberly A. Clarke, Varnum, Immigration Lawyer
Partner

Kim focuses her practice on immigration matters, including nonimmigrant petitions, both employment- and family-based permanent residence applications, expatriation and foreign visa issues. She has developed a strong background in the area of worker verification issues and managed clients through internal and agency Form I-9 audits, USICE compliance investigations and civil criminal charges.

In addition, Kim maintains a specialty practice of consultation with agricultural clients and handles various agricultural labor and employment issues such as compliance with...

616-336-6441
Ashleigh E. Draft Associate Grand Rapids Labor & Employment
Associate

Ashleigh is an associate attorney currently working with the labor and employment group. She also works with higher education clients and provides support on a variety of litigation matters.

Ashleigh’s experience includes serving as a legal extern for the Michigan Court of Appeals Research Division. She also clerked for Michigan Appeals Court Judge Jane Beckering. Prior to law school, Ashleigh served organizations in the higher education and nonprofit sectors in various development and communications roles. 

616-336-6627
Tiffany Snow, Varnum Law Firm, Labor and Employment Attorney Detroit MI
Associate

Tiffany is a member of the firm's Labor and Employment Team. She has a depth of experience in employment matters, having served as a senior account manager at a regional staffing firm for many years prior to obtaining her law degree. Her legal education includes a litigation and estate planning focus.

Practice Areas

Education

Western Michigan University Thomas M. Cooley Law School
Auburn Hills,...

313-481-7328