Budget bills on their way to Governor Rick Snyder use a surplus in an unemployment fund to keep the spending plan in balance. But critics say that money should be set aside to pay back people wrongly accused of unemployment fraud.
About 50 thousand people were wrongly accused of filing false claims by a computerized system, and were forced to reimburse the state and pay a 400 percent penalty. They filed a lawsuit against the state, claiming hundreds of millions of dollars in damages.
Steve Gray is an attorney with the University of Michigan employment law clinic. That lawsuit is still working its way through the courts. But Gray says the state should set aside a 60 million surplus in the unemployment fund to start paying them back.
“I don’t they should be using it until everybody who has been harmed by this has been made whole.”
“They’re allowed by law to take it from the fund to do it, but just because you can do it, should you do it? And I don’t think you should be doing it until basically the people who paid for it are made whole.”
State Senate Majority Leader Arlan Meekhof if they win, they’ll get their money.
“If it’s deemed that they’re owed money, we’ll get them their money back, wherever it comes from. I’m not concerned about where the money moves now, but if somebody’s been wronged and money has to get back to them, we’ll figure out a way to get it back.”
The state faces a lawsuit in the Michigan Court of Claims from people who want to be paid back.