Ask The Lawyer, Have Unemplyment Fraud Penalties Been Reduced?


QUESTION: Two years ago, I received unemployment benefits when I shouldn’t have, and the Unemployment Insurance Agency asked me to repay the benefits, plus a quadruple penalty. I heard that the penalties have changed, can I ask for a break?

ANSWER: You heard right. The penalties for making an intentional false statement or representation to the Unemployment Insurance Agency (UIA) with the intention of receiving benefits for which you are not eligible or entitled were drastically reduced in December 2017. That’s when Gov. Rick Snyder signed what is now PA 226 of 2017 into law. Unfortunately for you, the law does not go into effect until July 1, 2018.

But, while you may be out of luck, the new law spares those guilty of taking more than their legal share of unemployment benefits from penalties so high repayment was often impossible.

Under previous law, the penalty for improperly receiving up to $500 or in benefits was repayment of the benefits received, plus a penalty of up to twice that amount. So, if you improperly received $300 in unemployment benefits because, for example, you failed to tell the UIA you were working part time, you would have had to repay the $300, plus a penalty of up to $600, for a total of $900. The bill really mounted if you improperly received more than $500 in benefits; then, you were required to repay the amount received plus a penalty of up to four times that amount. A person who improperly received $6,000 in benefits would be asked to pay a total of $30,000, plus interest.

The new law does not let people who lie to the UIA off the hook. Now, someone receiving benefits by fraud can expect to repay the amount improperly received — no matter what that amount is — plus damages equal to that amount. So, if you received $6,000 in benefits as a result of fraud, you would now be required to pay the UIA up to $12,000. A second violation bumps the damages up to 1.5 the amount improperly received.

Under either the old law or the 2017 amendment, the penalties can become substantial. If you’ve been accused of misrepresentation by the UIA, you may want to consult an attorney.

The lawyers at GWINN LEGAL PLLC are experienced attorneys and are happy to answer your questions. Give us a call for a free initial telephone consultation about your legal needs. For consideration of your questions in our web column, please submit your inquiry on the “Contact Us” page of our website at

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By: Daniel A. Gwinn, Esq.

Attorney and Counselor at Law
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
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