GWINN TAURIAINEN PLLC by: Daniel A. Gwinn, Esq. & Laura Bradshaw Tucker, Esq.

In the third of our series on the Michigan Unemployment Agency (UIA), we present a case study where an unemployed worker was wrongly assessed penalties because, while filing for unemployment benefits at the advice of a UIA representative after being laid off from a full-time job, she was also working part-time. The case study below shows how this employee’s reliance on wrong information from the UIA left her in hot water and responsible for an enormous debt.

Case Study #2 – Part-time earnings

When she applied for unemployment in December 2010, Susan Gray asked a worker at her local UIA office whether she could collect benefits if she worked part-time. The worker told her she would still be eligible.

Shortly after she was laid off, Susan found a part-time job and, soon after, received a letter informing her she was eligible for weekly unemployment benefits of $343. To receive the benefits, Susan, like all those who receive unemployment, was required to “certify” to the UIA every week, stating she was out of work, was looking for work, and was available for work.

When she first certified for benefits, calling in to the UIA’s automated phone system, MARVIN, Susan was asked if she was back to work full time. She responded, “No.” After this she was asked if she had “any earnings.” Believing this referred to the previous question, and full-time work, Susan again replied “No.” As Susan explained later, she believed, based on her conversation with the UIA worker, that part-time work would not disqualify her from full benefits.

Susan was wrong. Part-time earnings must be reported. While part-time work does not disqualify a claimant from receiving benefits, it does disqualify a claimant from receiving full benefits. Those who work part-time see their benefits reduced by 50 percent of their part-time earnings.[1].

Susan was not aware of this; she continued to certify to MARVIN for almost a year. Eventually, she was contacted by the UIA and, through a series of letters and phone calls, learned she was required to report her part-time earnings. After being set straight, Susan made sure she reported every cent she earned; she continued to collect benefits for over a year. She needed the money. About a year after Susan lost her job, her husband died suddenly, leaving her alone to raise three young children.

Luckily, her part-time job turned into a full-time job. Susan stopped certifying for benefits in 2012, and believed her relationship with the UIA was over.

She was wrong again.

Almost three years after Susan had stopped receiving benefits, the UIA sent Susan an avalanche of letters stating it had determined Susan had been only partially eligible for the benefits she had received because of her part-time work and, further, that her failure to report this income was misrepresentation. The UIA requested restitution of $26,880 — $5,376 for the benefits Susan improperly received and a quadruple penalty of $21,504 for the misrepresentation.

Unfortunately for Susan, these letters were sent to an old address. She did not receive them.

Several months after the UIA mailed its letters to Susan, and after it had begun proceedings to withhold her income tax refund, Susan learned of the actions being taken against her. By chance, the new tenant at the old address forwarded a copy of a request for payment.

Susan immediately wrote the UIA. She told them she had misunderstood UIA rules on part-time pay, said she had reported her earnings, and denied she ever deliberately tried to misrepresent her situation. She also asked whether she might qualify for an exemption due to financial hardship.

The UIA treated the letter as a request for a waiver on hardship grounds, for which Susan was ineligible because she had been found guilty of “misrepresentation.” The UIA ignored Susan’s claim that she had not deliberately misrepresented anything. When she tried to appeal the finding of misrepresentation, she was told she was too late – the time for filing an appeal had passed. She should have appealed within 30 days of the never-delivered Redetermination. By April 2016, the UIA claimed Susan owed over $27,000.

Susan sent her own avalanche of letters to the UIA, arguing she should be allowed to appeal because the UIA had sent letters to the wrong address, and repeatedly protesting that she never intended to receive benefits to which she was not entitled. In the end, the UIA granted her plea for an appeal.

But she lost.

Susan contacted Gwinn Tauriainen in late April 2016. The firm quickly asked the UIA to review its decision, and followed up with an appeal to the Michigan Appeals Hearing System. In July, Susan’s case was presented to an Administrative Law Judge.

When she went before the judge, Susan was ready to pay back the benefits she had received through her mistaken belief that she was eligible for full benefits while working part-time. As it turned out, she didn’t have to pay back anything. Susan and her lawyer convinced both the judge and the UIA representative that there was no intentional misrepresentation. The finding was reversed. The reversal had a surprising consequence – it meant the UIA had taken too long to ask for repayment of the original benefits. The UIA can take up to three years to collect in cases of misrepresentation, but only one year where benefits are paid due to simple mistake or error.

With the help of Gwinn Tauriainen, Susan went from wondering how to pay a bill for $27,000 to owing the UIA nothing at all.

The lawyers at GWINN TAURIAINEN 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

[1] For example, a claimant receiving $362 per week in unemployment benefits, who made $200 in a week working part-time, would be required to report that $200. The benefit amount would be reduced by $100 (50 percent of $200). Net income for the period would be $462 ($362 – $100) + $200 income). If half the part-time earnings is equal to or exceeds the benefit amount, the Claimant is not entitled to any benefits.

By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
(248) 247-3310 facsimile
[email protected]