UIA resumes collection of pandemic-era overpayments; director outlines waivers, supports

The Michigan Unemployment Insurance Agency resumed collecting on established overpayments after the Saunders class-action settlement, Director Palmer told the House Oversight Committee on State and Local Public Assistance Programs, saying the agency is balancing legal obligations with efforts to limit harm to claimants.

"On 05/13/2025, the Saunders lawsuit was settled and the UIA then had a legal responsibility to begin collections again," Director Palmer said, explaining the agency is now collecting on balances established before, during and after the collections pause. He told lawmakers the agency continued issuing determinations and preserving appeal rights while an injunction prevented billing and acceptance of payments.

The move matters because it affects claimants, employers and the state unemployment trust. Palmer said the pause in collections has reduced Michigan's recoveries well below U.S. Department of Labor expectations and urged the committee to understand both the legal duty to collect under the Michigan Employment Security Act and the federal conformity requirements that accompany federal UI funds.

Palmer gave several measures of scale to illustrate the workload the agency handled during the pandemic: roughly 3.5 million claimants and 5 million claims, about 9.2 million pieces of mail and $41.3 billion in benefits paid. By comparison, he said, the agency has seen about 300,000 initial claims and roughly $740 million paid so far this year.

Palmer said overpayments are a normal feature of unemployment insurance, arising for example when claimants do not provide required proof of employment or income, when claimants return to work but continue certifying, when employer protests show a separation for cause, or…