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Democrats propose bills to expand unemployment benefits and help those falsely accused of fraud

Work share programs allow employees who see their hours cut collect partial unemployment benefits
flickr http://j.mp/1SPGCl0
Work share programs allow employees who see their hours cut collect partial unemployment benefits

Michigan House Democrats have introduced a series of bills that would expand unemployment benefits, and make fuller amends to people who were falsely accused of unemployment fraud during Gov. Rick Snyder’s administration.

The legislation would increase weekly benefit payments, and extend the eligibility period for collecting unemployment from 20 to 26 weeks.

But more than half of the ten-bill package deals with the unemployment fraud debacle. From 2013-2015, an automated computer system wrongly flagged more than 40,000 for benefits fraud—forcing them to repay benefits they were entitled to, often with a 400% penalty on top of it.

Victims of that fiasco are now entitled to recoup some of those wrongful payments, which often came in the form of garnished wages or seized tax returns, from a state fund. But that reimbursement only offers partial relief for the full damages they suffered, says State Rep. Darrin Camilleri (D-Brownstown Township). He’s sponsoring a bill that would go further.

“Reimbursement would include the overpayment amount, interest, penalties, litigation costs, bankruptcy expenses, and all other things that were involved in that economic hardship,” Camilleri said. “Folks were really hurting. And we need to make sure that they are made whole, so they felt they had some sort of restitution during this process.”

At least 1,100 people filed for bankruptcy and several hundred were criminally prosecuted over the false fraud claims, says Jennifer Lord, an attorney representing victims suing the state. And that’s only the financial cost.

“It’s had tremendous ramifications,” Lord said. “Making people whole isn’t going to just be ensuring that every single penny is returned to them. It’s ensuring that there’s a recognition that they went through much more than the theft of that money.”

Lord says she’s pleased the legislature is addressing the issue while the court case—now back before the Michigan Court of Appeals after the Michigan Supreme Court reversed a dismissal order—grinds along. “These big class-action cases can take a decade to wind their way through the courts,” Lord said. “Why make these people suffer any longer?”

Lord says she and other attorneys working on related cases question whether the state has even fully reimbursed victims for direct costs associated with the fiasco. “I’m a little skeptical about the premise that the agency has paid everyone back that’s entitled to a refund. That’s certainly not something that we’re hearing about,” she said.

Camilleri says this period of low unemployment is actually the best time to address those reparations, and expand unemployment benefits in general.

“I think it’s more critical than ever that we have this conversation during a good economy, so that when things go south we’re not fighting over dollars and making a bad situation worse for some of those people,” Camilleri said.

House Democrats introduced the bills this week. They have little bipartisan support so far, but Camilleri says he’s “hopeful” that will change.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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