State Rep. Matthew Bierlein today opposed a plan that will create consequences for small businesses throughout Michigan while further testing the state’s ability to handle fraud.

House Bill 5827 would increase the maximum number of weeks that an individual may receive unemployment compensation from 20 to 26 weeks beginning on Jan. 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 problems the state’s Unemployment Insurance Agency (UIA) was facing at the time, which included debt and high costs. In addition, UIA experienced numerous issues with fraud and its fraud prevention tools during the COVID-19 pandemic when hundreds of thousands of Michigan residents saw their livelihoods shuttered.

A state audit released in December showed that UIA did not do enough to identify and investigate potential fraud as unemployment claims came in and instead paid out over $245 million to ineligible claimants – including dead people – between Jan. 2020 and Oct. 2022. A separate audit from Deloitte estimated that from March 2020 through Sept. 2021, missteps from UIA cost the state an estimated $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.