Bill Text: MI HB5166 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Employment security; sanctions; fraud penalties; modify. Amends sec. 54 of 1936 (Ex Sess) PA 1 (MCL 421.54). TIE BAR WITH: HB 5165'17, HB 5167'17, HB 5168'17, HB 5169'17, HB 5170'17, HB 5171'17, HB 5172'17
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2017-12-28 - Assigned Pa 226'17 With Immediate Effect [HB5166 Detail]
Download: Michigan-2017-HB5166-Engrossed.html
HB-5166, As Passed House, November 8, 2017
SUBSTITUTE FOR
HOUSE BILL NO. 5166
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 54 (MCL 421.54), as amended by 2016 PA 522.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 54. (a) A person, including a claimant for unemployment
benefits, an employing entity, or an owner, director, or officer of
an employing entity, who willfully violates or intentionally fails
to comply with any of the provisions of this act, or a regulation
of
the unemployment agency promulgated under the authority of this
act for which a penalty is not otherwise provided by this act is
subject to the following sanctions, notwithstanding any other
statute of this state or of the United States:
(i) If the unemployment agency determines that an amount has
been obtained or withheld as a result of the intentional failure to
comply with this act, the unemployment agency may recover the
amount obtained as a result of the intentional failure to comply
plus damages equal to 3 times that amount.
(ii) The unemployment agency may refer the matter to the
prosecuting attorney of the county in which the alleged violation
occurred for prosecution. If the unemployment agency has not made
its own determination under subdivision (i), the recovery sought by
the
prosecutor shall must include the amount described in
subdivision
(i) and shall also include 1 or more of the
following
penalties:
(A) Subject to redesignation under subsection (l), if the
amount obtained or withheld from payment as a result of the
intentional failure to comply is less than $25,000.00, then 1 of
the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is $25,000.00 or more
but less than $100,000.00, then 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(C) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is more than
$100,000.00, then 1 of the following:
(I) Imprisonment for not more than 5 years.
(II) The performance of community service of not more than 5
years but not to exceed 10,400 hours.
(III) A combination of (I) and (II) that does not exceed 5
years.
(iii) If the unemployment agency determines that an amount has
been obtained or withheld as a result of a knowing violation of
this act, the unemployment agency may recover the amount obtained
as a result of the knowing violation and may also recover damages
equal to 3 times that amount.
(iv) The unemployment agency may refer a matter under
subdivision (iii) to the prosecuting attorney of the county in
which the alleged violation occurred for prosecution. If the
unemployment agency has not made its own determination under
subdivision
(iii), the recovery sought by the prosecutor shall must
include
the amount described in subdivision (iii) and shall
also
include
1 or more of the following
penalties:
(A) Subject to redesignation under subsection (l), if the
amount obtained or withheld from payment as a result of the knowing
violation is $100,000.00 or less, then 1 of the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the knowing violation is more than $100,000.00, then 1 of
the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(b)
Any An employing unit or an owner, director, officer, or
agent of an employing unit, a claimant, an employee of the
unemployment agency, or any other person who makes a false
statement or representation knowing it to be false, or knowingly
and willfully with intent to defraud fails to disclose a material
fact, to obtain or increase a benefit or other payment under this
act or under the unemployment compensation law of any state or of
the federal government, either for himself or herself or any other
person, to prevent or reduce the payment of benefits to an
individual entitled thereto or to avoid becoming or remaining a
subject employer, or to avoid or reduce a contribution or other
payment required from an employing unit under this act or under the
unemployment compensation law of any state or of the federal
government ,
as applicable, is subject to
administrative fines and
is punishable as provided in this subsection, notwithstanding any
other penalties imposed under any other statute of this state or of
the United States. For benefit years beginning on or after May 1,
2017, to establish fraud based on unreported earnings under this
subsection, the unemployment agency must have in its possession the
weekly wage information from the employer. A violation of this
subsection is punishable as follows:
(i) If the amount obtained as a result of the
knowing false
statement
or representation or the knowing and willful failure to
disclose
a material fact is less than $500.00, Subject to
subdivisions (ii) and (iii), the unemployment agency may recover
the amount obtained as a result of the knowing false statement or
representation or the knowing and willful failure to disclose a
material
fact and may also recover damages equal to 2 times that
amount. For a second or subsequent violation described in this
subdivision that occurs after the unemployment agency has sent
proper notice of the original violation to the interested parties,
the
unemployment agency may recover damages equal to 4 1.5 times
the amount obtained.
(ii) If the amount obtained as a result of the
knowing false
statement
or representation or the knowing and willful failure to
disclose
a material fact is $500.00 or more, Subject to subdivision
(iii), if the unemployment agency determines or redetermines or an
administrative law judge, the Michigan compensation appellate
commission, or a court orders that an impostor committed identity
theft, the unemployment agency shall attempt to recover from the
impostor the amount obtained as a result of the knowing false
statement or representation or the knowing and willful failure to
disclose a material fact and may also recover damages equal to 4
times that amount. As used in this subdivision:
(A) "Identity theft" means that term as defined in section 24
of chapter VII of the code of criminal procedure, 1927 PA 175, MCL
767.24.
(B) "Impostor" means that term as defined in section 54f.
(iii) The
unemployment agency may refer the a matter under
subdivision (i) or (ii) to the prosecuting attorney of the county
in which the alleged violation occurred for prosecution. If the
unemployment
agency has not made its own determination under this
subdivision (i) or (ii), the recovery sought by the prosecutor
shall
must include the amount described in this subdivision
(i) or
(ii) and shall
also include 1 or more of the following penalties if
the amount obtained is $1,000.00 or more:
(A) Subject to redesignation under subsection (l), if the
amount obtained or withheld from payment as a result of the knowing
false statement or representation or the knowing and willful
failure to disclose a material fact is $1,000.00 or more but less
than $25,000.00, then 1 of the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the knowing false statement or representation or the
knowing and willful failure to disclose a material fact is
$25,000.00 or more, then 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(C) If the knowing false statement or representation or the
knowing and willful failure to disclose a material fact made to
obtain or withhold an amount from payment does not result in a loss
to
the commission, unemployment
agency, then a recovery the
unemployment
agency shall be sought attempt to recover an amount
equal to 3 times the amount that would have been obtained by the
knowing false statement or representation or the knowing and
willful failure to disclose a material fact, but not less than
$1,000.00, and 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(c) (1) Any employing unit or an owner, director, officer, or
agent of an employing unit or any other person failing to submit,
when due, any contribution report, wage and employment report, or
other reports lawfully prescribed and required by the unemployment
agency
shall be is subject to the assessment of an administrative
fine for each report not submitted within the time prescribed by
the
unemployment agency. , as follows: In the case of contribution
reports not received within 10 days after the end of the reporting
month
the fine shall be is 10% of the contributions due on the
reports but not less than $5.00 or more than $25.00 for a report.
However, if the tenth day falls on a Saturday, Sunday, legal
holiday, or other unemployment agency nonwork day, the 10-day
period
shall run runs until the end of the next day that is not a
Saturday, Sunday, legal holiday, or other unemployment agency
nonwork day. In the case of all other reports referred to in this
subsection,
the fine shall be is $10.00 for a report.
(2) Notwithstanding subdivision (1), any employer or an owner,
director, officer, or agent of an employer or any other person
failing to submit, when due, any quarterly wage detail report
required by section 13(2), or submitting an incomplete or erroneous
report and failing to file a corrected report within 14 days after
notification of an error by the agency, is subject to an
administrative
fine of $50.00 for each untimely report, incomplete
report,
or erroneous report if the report
is filed not later than
30 days after the date the report is due, $250.00 if the report is
filed more than 1 calendar quarter after the date the report is
due, and an additional $250.00 for each additional calendar quarter
that
the report is late. , except that no penalty shall apply if
the
employer files a corrected report within 14 days after
notification
of an error by the agency.
(3) If a report is filed after the prescribed time and it is
shown
to the satisfaction of the commission unemployment agency
that the failure to submit the report was due to reasonable cause,
a
fine shall the unemployment
agency shall not be imposed. impose a
fine. The assessment of a fine as provided in this subsection
constitutes a final determination unless the employer files an
application with the unemployment agency for a redetermination of
the
assessment in accordance with pursuant
to section 32a.
(d) If any employee or agent of the unemployment agency or
member of the Michigan compensation appellate commission willfully
discloses confidential information obtained from any employing unit
or individual in the administration of this act for any purpose
inconsistent with or contrary to the purposes of this act, or a
person who obtains a list of applicants for work or of claimants or
recipients of benefits under this act uses or permits use of that
list for a political purpose or for a purpose inconsistent with or
contrary to the purposes of this act, he or she is guilty of a
misdemeanor punishable by imprisonment for not more than 90 days or
a fine of not more than $1,000.00, or both. Notwithstanding the
preceding sentence, if any unemployment agency employee, agent of
the unemployment agency, or member of the Michigan compensation
appellate commission knowingly, intentionally, and for financial
gain, makes an illegal disclosure of confidential information
obtained under section 13(2), he or she is guilty of a felony,
punishable by imprisonment for not more than 1 year and 1 day.
(e) A person who, without proper authority from the
unemployment agency, represents himself or herself to be an
employee of the unemployment agency for the purpose of securing
information regarding the unemployment or employment record of an
individual is guilty of a misdemeanor punishable by imprisonment
for not more than 90 days or a fine of not more than $1,000.00, or
both.
(f) A person associated with a college, university, or public
agency of this state who makes use of any information obtained from
the unemployment agency in connection with a research project of a
public service nature, in a manner as to reveal the identity of any
individual or employing unit from or concerning whom the
information was obtained by the unemployment agency, or for any
purpose other than use in connection with that research project, is
guilty of a misdemeanor punishable by imprisonment for not more
than 90 days or a fine of not more than $1,000.00, or both.
(g) As used in this section, "person" includes an individual;
owner, director, or officer of an employing entity; copartnership;
joint venture; corporation; receiver; or trustee in bankruptcy.
(h) This section applies even if the amount obtained or
withheld from payment has been reported or reported and paid by an
individual involved in a violation of subsection (a) or (b).
(i)
If a determination is made that an An individual has
violated
who violates this section
, the individual is subject to
the
sanctions of this section and, if applicable, the requirements
of
section 62.
(j)
Amounts recovered by the commission unemployment agency
under
subsection (a) shall must be credited first to the
unemployment compensation fund and thereafter amounts recovered
that are in excess of the amounts obtained or withheld as a result
of
the violation of subsection (a) shall must be credited to the
penalty and interest account of the contingent fund. Amounts
recovered
by the commission unemployment
agency under subsections
(c),
(d), (e), and (f) shall must
be credited to the penalty and
interest
account of the contingent fund in accordance with pursuant
to section 10(6).
(k) Amounts recovered by the unemployment agency under
subsection
(b) shall must be credited in the following order:
(i) From the penalty assessment recovered, an amount equal to
15%
of any benefit overpayments resulting from fraud shall must be
credited to the unemployment compensation fund.
(ii) For the balance of deductions from unemployment insurance
benefits, to the liability for benefit repayment under this
section.
(iii) For all other recoveries, the balance shall must first
be credited to the unemployment compensation fund for repayment of
any remaining amounts owed, and then to the contingent fund to be
applied
first to administrative sanctions and damages, and then to
interest, and then to an amount equal to the representation fees
associated with advocacy assistance services provided under section
5a.
(l) A person who obtains or withholds an amount of
unemployment benefits or payments exceeding $3,500.00 but less than
$25,000.00 as a result of a knowing false statement or
representation or the knowing and willful failure to disclose a
material fact is guilty of a felony punishable as provided in
subsection (a)(ii)(A) or (iv)(A) or subsection
(b)(ii)(A).(b)(iii)(A).
(m)
An The unemployment agency shall not make a determination
under
this section shall not be that
is based solely on a computer-
identified discrepancy in information supplied by the claimant or
employer. An unemployment agency employee or agent must examine the
facts and independently determine that the claimant or the employer
is responsible for a willful or intentional violation before the
unemployment agency makes a determination under this section.
Enacting section 1. This amendatory act takes effect July 1,
2018.
Enacting section 2. This amendatory act applies to original
determinations and redeterminations made on or after July 1, 2018.
Original determinations and redeterminations made before July 1,
2018 must be processed pursuant to this section as it existed
before July 1, 2018.
Enacting section 3. This amendatory act does not take effect
unless all of the following bills of the 99th Legislature are
enacted into law:
(a) House Bill No. 5165.
(b) House Bill No. 5167.
(c) House Bill No. 5168.
(d) House Bill No. 5169.
(e) House Bill No. 5170.
(f) House Bill No. 5171.
(g) House Bill No. 5172.
