Experts say Michigan's unemployment claims computer system causing backlogs | Michigan Radio
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Experts say Michigan's unemployment claims computer system causing backlogs

Jun 12, 2020

Experts say many Michigan unemployment claims are being wrongly flagged as possible fraud
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Experts on Michigan's unemployment system say the huge number of claims due to the pandemic is shining a spotlight on glaring problems with the computer system that processes those claims.

Rachael Kohl is Director of the University of Michigan Law School's Workers' Rights Clinic. 

She says the state's computer system that processes claims was created during the Snyder administration, with the aim of  generating as many red flags as possible, in order to reduce the number of people who qualify for unemployment.

"And these flags halt payment immediately and unnecessarily," says Kohl, "and burdens the claimant to fix it.  Otherwise they won't receive benefits.  This is what's causing the backlog now."

Cole says some of the things that generate red flags could be removed by computer programmers - but some are statutorily required and would need the state legislature to act. 

One example is someone who retires, starts working again, and gets laid off from that new job.  That will automatically get someone's claim flagged.

Kohl says at least the state now has human beings reviewing claims flagged as possibly unallowed, or fraudulent.

Beginning in 2013, about 60,000 people's claims were wrongly classified as fraud by the new computer system. 

Attorneys for those accused say many people were thrown into poverty, lost their homes, and went through divorces and bankruptcies as a result of the state's actions.

Kohl says having workers review the computer-flagged claims has reduced the number of wrongful accusations of fraud dramatically. 

The state continues to fight lawsuits over the debacle in court.

The Michigan Supreme Court recently decided against the state's claim that a lawsuit seeking damages was barred because it was not filed within the statute of limitations.

The state is now fighting another claim, that the state's wrongful actions violated citizens' rights to due process, by seizing benefits and assets and assessing fines and fees, without notifying claimants first.

Meanwhile, the state says the unemployment system is being deluged with a huge number of actually fraudulent claims, from criminals hoping to take advantage of the large amount of funding now available for unemployment during the pandemic.

The state put a hold on about 340,000 possibly fraudulent claims, and assigned hundreds of additional workers to go through the claims so that non-fraudulent claims could be paid as quickly as possible.