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Snyder signs bills to update workers’ comp, unemployment insurance systems

courtesy Gov. Snyder

Gov. Rick Snyder signed legislation strengthening the state’s Unemployment Insurance program and updating workers’ compensation laws on Monday.

“These bills are critical to our reinvention of Michigan,” Snyder said. “Modernizing our unemployment insurance and workers’ compensation systems will ensure their solvency and integrity.”

Senate Bills 483 and 484, sponsored by state Sen. Mark Jansen, allow Michigan to restore the Unemployment Insurance program to solvency by issuing revenue bonds. Michigan has the highest per capita unemployment insurance debt in the nation. The state has paid more in benefits than it has collected from job providers who finance the system. Since 2007, Michigan has borrowed money from the federal government to pay its obligations to unemployed workers. The current debt exceeds $3 billion. These bills are now Public Acts 267 and 268 of 2011.

The bond proceeds extinguish the federal liability and allow for repayment of money borrowed from the General Fund. This will eliminate Michigan’s debt to the federal Unemployment Trust Fund and ensures that the trust fund is solvent moving forward.

In addition, the legislation creates an amnesty program for claimants and employers. It also lets small businesses spread unemployment insurance payments over a calendar year while allowing greater flexibility in seasonal employer designations targeting Michigan’s tourism industry.

Other updates include changing the definition of the “suitable work” requirement to include jobs outside of a claimant’s experience if the work pays 120 percent of his or her weekly benefit amount, and providing the Unemployment Insurance Agency with tools to have greater control over the system’s integrity.

S.B. 806, sponsored by state Sen. Jack Brandenburg, provides a triggering mechanism to ensure the state develops and maintains a surplus in the trust fund to avoid future deficits as well as institutes several administrative efficiencies. The maximum weekly benefit of $362 remains unchanged as does the formula of unemployment benefit calculation. The legislation does not reduce the number of benefit weeks for claimants. S.B. 806 is now P.A. 269 of 2011.

House Bill 5002, sponsored by state Rep. Brad Jacobsen, continues the state’s mission to protect workers who are injured on the job, while ensuring that the workers’ compensation system remains viable. H.B. 5002 is now P.A. 266 of 2011.

The bill promotes certainty to workers and employers by codifying years of Supreme Court and Court of Appeals decisions. Under the bill, a person receiving workers’ compensation benefits must take a job that is within his or her skill set, and that they can physically perform, if it is available to them. If not, the person risks losing the compensation benefits.

“The system’s goal must be to help injured workers get back on the job as soon as possible while making sure the benefits they deserve during recovery are paid fully and promptly,” Snyder said. “These changes to this 100-year-old act will help ensure that the promise of compensation for injured employees is around for the next century.”

The legislation supports the Workers’ Compensation Agency’s goal of gaining efficiencies through electronic filing and results in a savings of over $400,000 through reorganization of the mediation system for contested workers’ compensation issues. Benefits held up by contested cases will move more quickly. Legal costs also will be reduced as the bill allows settlements to be entered without an additional hearing before a magistrate.

Issues such as fraudulent claims by employees or the failure of employers to secure coverage increase the cost of workers’ compensation. H.B. 5002 requires the agency to report to the Legislature on measures taken to address such issues.

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