The COVID-19 pandemic precipitated a dramatic surge in unemployment across the United States, reaching a peak average of 13% in the second quarter of 2020, a stark contrast to the 3.5% rate recorded in February 2020. This surge resulted in widespread economic hardship, forcing many individuals to rely on unemployment benefits to navigate the unprecedented crisis. However, in Michigan, numerous individuals who received these vital benefits later faced unexpected and controversial clawbacks by the state’s unemployment agency. This action sparked a class-action lawsuit, alleging that the state’s methods of reclaiming benefits violated the due process rights of the affected individuals.
The class-action lawsuit, officially titled Saunders, et al. vs. State of Michigan Unemployment Insurance, was initiated in January 2022. The plaintiffs argued that the Michigan Unemployment Insurance Agency (UIA) prematurely and unjustly reclaimed unemployment benefits distributed during the pandemic. The UIA’s actions, they contended, were carried out before appeals regarding overpayment determinations could be fully reviewed and adjudicated. This premature action resulted in significant financial distress for the affected individuals, including wage garnishments and seizures of tax refunds, exacerbating the hardships already imposed by the pandemic.
The lawsuit ultimately reached a settlement in April 2023, with a dedicated fund of $55 million established to compensate eligible claimants. This settlement offers a pathway to restitution for those impacted by the UIA’s actions. Individuals who meet specific criteria are eligible to participate in the settlement and potentially receive compensation.
Eligibility for this settlement is restricted to Michigan residents who had their unemployment benefits reclaimed by the UIA between March 1, 2020, and April 25, 2024. The state has made efforts to notify potentially eligible individuals via mail and email. Furthermore, individuals can verify their eligibility by accessing their Michigan Web Account Manager account for unemployment insurance, where a message titled "Saunders v. UIA Improper Collections Alert" would indicate eligibility. Additional verification methods include contacting the settlement administrator directly by phone at 866-499-4565 or by email at [email protected].
The process for opting into the settlement involves submitting a claim through the settlement administrator’s dedicated website. This requires a claim number and PIN, which can be obtained by contacting the settlement administrator if necessary. The original deadline for submitting claims was November 4, 2023, but it has been extended to December 20, 2023. This extension provides a crucial window of opportunity for eligible individuals to participate in the settlement.
While the estimated individual payout is approximately $250 or more, the precise amount and disbursement timeline remain uncertain. A final hearing in the case is scheduled for March 20, 2025. Even after potential approval at this hearing, the settlement could be subject to appeals, which might further delay the distribution of payments. This underscores the importance of submitting a claim before the impending deadline to preserve the possibility of receiving compensation. The settlement represents a significant step toward addressing the grievances of Michigan residents who experienced undue hardship due to the UIA’s actions during an already challenging period.
