Michigan employers are likely to save money on unemployment insurance and workers’ compensation under changes signed into law on Dec. 19 by Gov. Rick Snyder. Critics, though, said the moves could make it more difficult for injured and jobless workers to get the benefits they need.
The measures require some unemployed workers to take new jobs after 10 weeks of benefits even if the available work is outside their previous experience or pays lower wages than they were making before. They also make it harder for someone to collect jobless benefits if they’re fired for cause or leave a job voluntarily.
The new requirements come on top of an earlier law that cuts the length of time that jobless workers can get state unemployment benefits from the current 26 weeks to 20 weeks starting with new applicants in January.
Snyder disagreed with critics who say requiring jobless workers to take a job paying 120 percent of their weekly benefit could trap them in a low-wage position by leaving them little time to look for work in their area of expertise.
“It’s to encourage people to work. It’s not to have them go backward,” Snyder said of the legislation. “It’s easiest to find a job when you’ve gotten a job.”
The new laws also overhaul the state’s worker’s compensation law for the first time in more than two decades by requiring recipients to work if they’re offered a job within their skill set that they can physically perform. If they don’t take the job, they risk losing their benefits.
“We want to see the employees back to work as soon as they’re able,” said Rep. Brad Jacobsen, an Oxford Republican who ran a small business and said he saw a former employee get worker’s comp benefits even after the worker was recovered enough to come back to work. “We hope this will speed things up.”
The new law exempts police and fire department employees from many of the new workers’ compensation rules. Attempts by Democrats to exempt other types of workers such as corrections officers failed as the bills were going through the Legislature.
Supporters said the changes reflect recent court rulings, which should make definitions clearer and cut down on the number of workers’ comp lawsuits.
“The system’s goal must be to help injured workers get back on the job as soon as possible while making sure the benefits they deserve during recovery are paid fully and promptly,” Snyder said.
The new laws also allow the state to sell bonds through which Michigan employers can repay the $3 billion owed the federal government for loans made to cover unemployment benefits from 2007 until now. The proceeds from the bonds will be used to pay off the debt, eliminating hefty penalties and interest employers now are paying the federal government.
Employers will repay the bonds and the state will get back $38 million borrowed from the general fund to cover the payments.
The Michigan Chamber of Commerce said the bonds will save employers penalties and interest, even though some will see their payments go up to repay their share of the bonds. Wendy Block of the chamber said the overall legislation will reform the insolvent unemployment insurance system to address many of the problems that created the funding crisis.
“Given the size and scope of the UI debt, and the ever-increasing federal penalties that follow, doing nothing was the most expensive option for job providers,” she added.