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.