Back to Basics: Unemployment Claims

With an increasing number of unemployment claims filed by unemployed or underemployed workers, school officials must be mindful of the statutory timelines and procedures when contesting claims.

Generally, unemployment benefits are provided to mitigate the impact from the sudden loss of income due to unemployment. The right to such benefits is governed by the Michigan Employment Security Act (MESA), which is administered by the Michigan Unemployment Insurance Agency (UIA). MESA’s disqualification provisions are narrowly construed. In other words, any administrative or judicial interpretation of MESA tends to favor claimants seeking unemployment benefits.

Worker Claims and Eligibility

To receive unemployment insurance benefits, a claimant must (1) be unemployed, (2) have sufficient qualifying wages, and (3) be otherwise eligible for benefits. Benefits may also be available to those who experience an unwanted reduction in employment hours, resulting in underemployment. Under MESA, a claimant is considered “unemployed” when working less than full-time in a week, as determined by the employer, and has earned less than 1.6 times his or her unemployment benefit amount during the week. Determinations of qualification and eligibility are based on facts that occur before, at, and after separation.

When a claimant files a new claim for benefits, the UIA must decide two issues:

1. Did the claimant earn enough in wages in his or her recent work history to be entitled to unemployment benefits; and
2. What is the reason the claimant is no longer working, and whether that makes the worker eligible and qualified to draw unemployment benefits?

Once a claim is filed, the UIA considers the total wages paid to the claimant during the “base period,” which is the first four of the last five complete calendar quarters before the unemployment claim was filed.

For example, if the unemployment claim was filed in March 2022, the base period is October 1, 2020 to September 30, 2021. If a claimant lacks enough wages in that base period to qualify for a claim, then the UIA must consider an alternate base period, the most recent four completed calendar quarters.

Denying Claims

Unemployment compensation is paid to workers who are unemployed through no fault of their own. If a worker becomes unemployed as a result of his or her own actions, such as quitting a job or getting fired for misconduct, he or she should be disqualified from receiving benefits. And, if an unemployed worker remains unemployed for failing to take reasonable action to become re-employed, he or she will be held ineligible for benefits for that week.

When a claim is properly filed, the UIA will make the determination whether the claimant is entitled to benefits. If the claimant is deemed eligible for benefits, the UIA will notify the employer that the employer’s UIA account will be charged, unless the employer provides information showing the unemployed worker was separated for a reason that disqualifies the unemployed worker from receiving benefits (e.g., if the employee is suspended or discharged for certain work-related misconduct). The employer’s response to the determination must be received by the UIA within 10 calendar days after the mail date shown on the form. If the employer has no disagreement with the determination, then no employer response is necessary.

School Denial Periods

MESA describes a denial period in which a claimant cannot receive unemployment benefits, even if the claimant is otherwise eligible and qualified for benefits. For school employees, summer is often a denial period. A denial period only applies if an employee has reasonable assurance of returning to work after the period between regular work seasons. Be sure to provide this reasonable assurance in a timely manner. Otherwise, school employees will not have to wait until the start of the next school year to claim unemployment benefits when a school failed to give the employee reasonable assurance of their return to work. Michigan courts have long recognized that a teacher’s employment for a school year ends when the teacher completes the contracted work days, not when the teacher fails to return at the start of the next school year.

Appeals and Unemployment Hearings

If a claimant or employer disagrees with the determination, the party may request that the UIA review the claim and issue a redetermination. A request for a redetermination must be made by either party in writing and received by the UIA within 30 days of the determination’s mailing. The UIA must timely review challenges to its determination and either issue a redetermination or transfer the matter to an administrative law judge (ALJ) for a hearing. If a party is dissatisfied with the redetermination, the party may appeal, first to an ALJ, and then to the Michigan Compensation Appellate Commission and the circuit court.

If you have any questions about unemployment claims, please contact a Thrun labor attorney. Check back next month for an overview of the unemployment hearing process.