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HB 5008

Relating to the financial administration of the Employment Relations Board; and declaring an emergency.

2025 Regular Session

HB 5008 cuts unemployment overpayment garnishments to 20% per payment, expands hardship/administrative error waivers, tightens restitution timelines, and preserves fraud penalties.

Chapter 397, (2025 Laws): Effective date July 1, 2025.
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Bill Summary · HB 5008

Summary — HB 5008 (amends MCL 421.62)

Purpose

HB 5008 revises the unemployment insurance restitution and recovery rules in the Michigan Employment Security Act (sec. 62, MCL 421.62). The bill primarily (1) reduces the maximum percentage of a claimant’s benefit or wage payment that may be garnished for repayment of improperly paid benefits, (2) clarifies time limits for when the Unemployment Insurance Agency (UIA) must issue restitution determinations and when it may pursue recovery, and (3) expands and details waiver rules for repayment in cases of equity, hardship, administrative error, and employer wage-reporting problems. It also reaffirms and adds penalties for intentional fraud.

Key provisions (highlights)

  • Garnishment cap reduced: Deductions from benefits or wages to recover overpayments are limited to a maximum of 20% of each payment (previously 50%).
  • Time limits for restitution actions:
    • UIA must issue a determination requiring restitution within 3 years after the date of finality of a reversing determination/redetermination/decision.
    • Generally, the agency may not initiate administrative or court action to recover improperly paid benefits more than 3 years after the date the last determination establishing restitution is final — except where benefits were improperly paid due to suspected identity fraud.
    • UIA must issue restitution determinations on issues within 3 years after the claimant first received benefits in the benefit year in which the issue arose, with special rules for intentional false statements and civil suits (see statute).
  • Waiver of recovery (except for intentional fraud):
    • UIA shall waive repayment and interest when repayment would be “contrary to equity and good conscience.”
    • Specific waiver grounds include:
    • Claimant provided incorrect wage information without intent and employer provided no or inaccurate wage info upon request.
    • Hardship: claimant’s average net household income and household cash assets (excluding social welfare and UI benefits) during the 6 months before the waiver application were at or below 150% of the federal poverty guideline. “Cash assets” excludes wages and means cash in excess of $100,000 in checking/savings.
    • Administrative or clerical error by the UIA (not including changes in adjudicative judgment).
    • Procedural limits: UIA may not consider more than three additional hardship waiver applications from the same claimant in a calendar year after an initial application; certain timing and refund rules apply if waiver is granted.
  • Intentional fraud:
    • If a claimant intentionally makes a false statement, misrepresentation, or conceals material information to obtain benefits, UIA must cancel the claimant’s rights to benefits for the affected benefit year (effective as of the date of the misrepresentation) and exclude wages used to establish that benefit year from establishing another benefit year.
    • Employers may protest to prevent a successive benefit year being established when fraud is found.

Who is affected

  • Claimants receiving unemployment insurance benefits (directly affected by lower garnishment cap, expanded waiver protections, and clarified time limits).
  • Employers and chargeable employers (may be affected by protest rights and changes in how prior earnings are treated when fraud is found).
  • UIA (administration of new deadlines, waiver procedures, and recovery limits).
  • Potential downstream effects on vendors/collectors and on claimants with identity-fraud–related overpayments (different exceptions apply).

Procedural / timeline notes

  • The bill amends sec. 62 of 1936 (Ex Sess) PA 1 (MCL 421.62), as amended by 2024 PA 238.
  • Legislative history in the provided record shows passage activity in spring 2025 (House and Senate actions, committee reports) and indicates the measure was enacted as Public Act 25-13 and signed by the Governor (listed as signed 06/03/2025). A companion bill is SB 856.

Potential impacts / considerations

  • The reduced garnishment cap (50% → 20%) materially increases immediate disposable income for claimants required to repay overpayments, easing financial hardship but lengthening repayment periods.
  • Stricter time limits and clearer waiver rules may reduce long-delayed recovery actions and give claimants clearer paths to relief when overpayments arise from agency or employer errors or from low-income hardship.
  • Stronger penalties for intentional fraud remain in place, including benefit-year cancellation and limits on using wages to create new benefit years.

Compiled from official sources — confirm details with the bill’s official record.

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