Checks should soon be going out to Michigan workers wrongly accused of unemployment fraud.A final approval hearing is scheduled for Jan. 29 to settle a $20 million class action lawsuit brought against the Michigan Unemployment Insurance Agency in 2015. If approved by Michigan Court of Appeals Judge Douglas Shapiro, more than 3,000 people will get settlement checks later this year.“These were not fraudsters. These were people wrongfully accused,” said Jennifer Lord, an attorney from Pitt, McGehee, Palmer & River who represents the claimants. “I just hope that message ultimately gets out this is not some state-sponsored giveaway. This is making people whole who were harmed by the state.”Workers sued the state after 40,000 people were wrongfully accused of fraud between 2013 and 2015. Michigan’s automated unemployment computer system, known as MiDAS, improperly flagged thousands of accounts, prompting the agency to garnish wages, intercept tax refunds and force claimants to repay benefits.Related: Workers falsely accused of unemployment fraud can sue the state, Michigan Supreme Court rulesMore than $20 million in refunds were issued in 2019 to those affected, but workers still filed the lawsuit alleging the agency violated their due process rights with unlawful collection efforts.Court documents show 3,206 people are expected to get an economic loss payout from a $5 million fund to replace all the money that was taken from them. The average award will be about $1,600 but will vary depending on the claimant.“That number may actually go up because it looks like we have more money in that fund that wasn’t allocated,” Lord said.Of the class members, 968 will also get an award if they experienced hardships like bankruptcy, foreclosure or declining credit because of the state’s actions, court documents show. The hardship claims total $4 million with the average award being $4,150.Only 8,205 people were eligible for the settlement because of a 2019 court decision that limited the class to people harmed within six months of the lawsuit being filed. About 5,000 of them did not enroll to be part of the settlement.Lord said if the final approval comes at the end of the month, checks will likely start going out within 12 weeks.“It’s such a relief,” said Lord, who has been working this case for nearly a decade. “Multiple times it felt like it would never be over. People really did experience harm, a lot of discouragement, and a lot of questioning whether they should ever apply for unemployment benefits again.”The state is on track to replace the decade-old MiDAS unemployment system that was responsible for the false fraud scandal by 2025. And the unemployment agency recently got a $2.6 million federal grant to track down cases of pandemic fraud.The Michigan Unemployment Insurance Agency is facing two other lawsuits alleging due process violations.A lawsuit filed in January 2022 claims the state unlawfully demanded pandemic benefits back and collected on overpayments caused by agency error. This resulted in a court order that halted collections for 1.8 million people. An August 2022 lawsuit says the unemployment agency froze payments for thousands of workers during the pandemic without providing an appeals process.
See the entire article on Arizona’s unemployment, or, read more Arizona real estate investing news. The choice is up to you.
