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Due to a Michigan Supreme Court ruling, the state's COVID-19 executive orders, which provided special provisions for the administration of unemployment insurance (UI) benefits, were overturned. (Governor's coronavirus executive order website; news release, 10-2-2020; EY Tax News Alert 2020-0636, 3-20-2020.)

Accordingly, Michigan legislation was enacted under SB 886 (Public Act 229 of 2020) to codify the COVID-19 UI benefit provisions that were contained in those executive orders. (Governor's news release, 10-20-2020.)

Per the bill analysis for SB 886, and through December 31, 2020:

• The Michigan Unemployment Insurance Agency (UIA) is prohibited from charging to an employer's account any benefit paid to a claimant who was laid off or placed on a leave of absence because of COVID-19, and instead must charge the benefits to the nonchargeable benefits component (NBC) account. The NBC account is the only one of three components of an employer's Michigan SUI tax rate that Is not reflected in an employer's experience for future rate assignment purposes.
  For COVID-19 UI benefits paid after March 15, 2020, but before January 1, 2021, an employer has one year after the date a benefit payment is erroneously charged against the employer's account to protest that charge.
• Unemployed individuals may collect up to 26 weeks of UI COVID-19 UI benefits. Starting in 2021, the law reverts to not more than 20 weeks or less than 14 weeks of benefits during an individual's benefit year. A claimant has 28 days after the last day worked to file a new, additional, or continued claim for COVID-19 UI benefits.
• Certain eligibility requirements for an individual to receive UI benefits (i.e., work search) do not apply if the unemployment is due to COVID-19.
• Individuals are considered to have left work involuntarily for medical reasons, and therefore eligible for UI benefits, if they left work to self-isolate or self-quarantine in response to elevated risk from COVID-19 because they were immunocompromised, displayed the symptoms of COVID-19, had contact in the last 14 days with an individual having a confirmed diagnosis of COVID-19, needed to care for an individual with a confirmed COVID-19 diagnosis, or had a family care responsibility that was the result of a government directive regarding COVID-19. UI benefits are also payable when an employee is granted a leave of absence for the same circumstances.
• The UIA may approve a shared-work plan submitted by an employer during the COVID-19 pandemic even if the employer did not meet certain requirements proscribed under normal circumstances. For instance, under normal circumstances, an employer with a negative account balance or delinquent in the filing and payment of SUI tax returns and contribution, would not be approved for a workshare program, but may be approved during the COVID-19 pandemic. Go here for more information on establishing a workshare program during COVID-19.

For more information on the UIA's response to COVID-19, go here.

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EY Payroll News Flash