Approval of $55M Michigan class-action lawsuit involving unemployment payments delayed a month
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Earlier this year state audits found that Michigan's unemployment agency lost more than $8 billion in taxpayer money because of waste and fraud. A new audit shows the agency never even did a background on many they hired -- and some of those new hires had already been convicted of stealing money.
(FOX 2) - A judge has delayed the final hearing to sign off on a $55 million settlement tied to the Michigan Unemployment Insurance Agency's improper clawing back of pandemic-era funds paid out to citizens.
Tens of thousands of Michigan residents were impacted by the UIA's decision and will have to wait a month before the class-action lawsuit's settlement is approved.
Big picture view:
More than 23,000 Michigan residents who applied for unemployment benefits due to the Covid pandemic were wrongly asked by the labor department agency to repay the funds.
The UIA failed to determine whether the claimant who protested the decision to pay back money had submitted the appeal correctly - or at all.
As part of a settlement tied to the class-action lawsuit, Saunders V Unemployment Ins. Agency, the state will not admit responsibility for the case. In exchange, those part of the lawsuit will receive on average $1,400 from the state.
Judge Brock Swartzle from the Michigan Court of Claims will decide when the money should be sent to plaintiffs in the case.
The backstory:
At the onset of the pandemic in 2020, public health measures that ordered businesses closed in an attempt to slow the spread of COVID-19 led to a surge in unemployment in Michigan.
As hundreds of thousands of workers were sent home, the UIA saw a surge in claims for unemployment benefits, overwhelming the agency and leading to millions of dollars being wrongly paid out.
Over the following months, the UIA attempted to retrieve some of the wrongly-paid-out funds - sometimes doing so without determining whether appeals from beneficiaries had been properly submitted.
Some who received Covid unemployment benefits now told they need to pay it back
Some people who received COVID-19 unemployment benefits are still being told they need to pay that money back.
Where things stand:
The deadline for residents to join the lawsuit has passed.
As of Dec. 20, 2024, an independent claims administrator is no longer accepting new participants.
Judge Swartzle has scheduled the final hearing to approve the settlement for April 24, 2025 at 1 p.m. Anyone past of the lawsuit can attend the hearing either virtually or in-person to address their concerns.
The hearing will take place at the Michigan Court of Appeals courtroom at 925 W. Ottawa Street in Lansing.
The Source: Previous reporting and a press release from the Unemployment Insurance Agency.