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State Rep. Matthew Bierlein today voiced opposition to a plan that he believes will adversely affect small businesses across Michigan and challenge the state's capacity to manage fraud.

House Bill 5827 proposes increasing the maximum duration for unemployment compensation from 20 to 26 weeks, starting January 1, 2025.

“Information we have available makes this plan unnecessary,” said Bierlein, of Vassar. “The state unemployment rate is currently 3.9 percent, which is lower than the national average. There is no sudden need to increase the amount of weeks that can be collected for unemployment. This change would also severely hamper our local job providers through increased costs as people will be drawing off unemployment accounts for longer periods of time. Our small business environment in Michigan has already been tested over the past few years with COVID-19 shutdowns, inflation and increased red tape. This plan will make that environment worse.”

The current 20-week limit was implemented in 2011 due to issues faced by the state’s Unemployment Insurance Agency (UIA), including debt and high costs. During the COVID-19 pandemic, UIA encountered significant problems with fraud prevention as hundreds of thousands of Michigan residents lost their jobs.

A state audit released in December revealed that UIA failed to adequately identify and investigate potential fraud as unemployment claims surged, resulting in over $245 million being paid out to ineligible claimants – including deceased individuals – between January 2020 and October 2022. Another audit by Deloitte estimated that from March 2020 through September 2021, UIA's missteps cost the state approximately $8.5 billion.

“We have seen UIA’s ability to handle greater responsibility. The results were not only unacceptable, but they cost the state and people who pay into the unemployment system dearly,” Bierlein said. “I am extremely skeptical of a plan that will allow the agency to process longer claims, especially when data shows we don’t have high unemployment that would lead to these types of reforms being on the table.”

HB 5827 advanced to the Senate for further consideration after being approved by the House along party lines.