In 2012, Michigan will Lower Maximum Weeks of State Unemployment Insurance Benefits from 26 to 20
March 28, 2011 - NORTON, MA - After 27 consecutive months of leading the nation with a double-digit unemployment rate, currently at 10.7%, and an unemployment trust fund that is $3.9 billion in debt to the federal government, the Michigan Senate recently passed an amended version of its House Bill 4408 which will reduce the amount of state unemployment insurance (“UI”) benefits from 26 weeks to 20 weeks for an individual who opens a UI claim after January 15, 2012. Once the Bill is signed, Michigan will be the only state in the country that does not provide 26 weeks of UI benefits.
The bill also includes necessary changes to Michigan’s UI program so individuals remain eligible for federal extended UI benefits for an additional 20 weeks. Without this change, 37,000 individuals would have lost their UI benefits by April 2, 2011. Another 150,000 individuals would have been affected by the end of 2011.
While the change to Michigan’s state UI benefits does not take effect until January 15, 2012, TMS is already preparing our SUB-Pay Plan administration systems to accommodate the reduction of UI weeks. We will continue to advise our clients of this legislation throughout the year, and provide our clients with the necessary resources, such as updated communication packages, for their future Michigan SUB-Pay populations.
About Total Management Solutions
For 24 years, Total Management Solutions has set the standard for Supplemental Unemployment Benefit (“SUB-Pay”) Plan development and administration for Fortune 1000 companies. Introduced by organized labor and the Department of Labor in the early 1950's, and first issued in a Revenue Ruling by the IRS in 1956, SUB-Pay Plans enable corporations to utilize its paid-in asset of state unemployment insurance taxes to supplement state unemployment insurance benefits with separation pay. When combined, these two benefits reduce a corporation's severance costs by 7.65%-45% while providing their separated or furloughed employees with up to 100% of their pre-layoff wage, plus a 7.65% tax savings, while they transition to reemployment.