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Forfeiture of Unemployment Insurance Benefits

By: Harvey I. Wax, employment law lawyer

The right to receive unemployment insurance benefits after an employment relationship ends depends solely on why the relationship ended.

Employers and employees commonly believe that because the employee is jobless he/she is entitled by law to receive unemployment benefits from the State. However, in many situations, that’s not true. In Michigan, there are a number of legal limitations on an unemployed employee’s right to receive benefits from the State. 

The important things to understand are:

  • To be eligible for unemployment benefits an employee must: (1) be separated from a job which he had held for a minimum of 20 weeks; (2) have earned a legally sufficient amount from the employer during the weeks preceding separation; (4) be able, available for, and actively seeking suitable full-time work; and (5) register for new work on a UIA website. 
  • An employee who resigns voluntarily is automatically disqualified by law from entitlement to benefits. In this regard, the statute provides:

“an individual is disqualified from receiving benefits if he or she…left work voluntarily without good cause attributable to the employer.”

  • Having been fired, with or without cause, doesn’t necessarily disqualify an employee from entitlement to unemployment benefits. Under Michigan law benefit eligibility of an employee fired for cause depends on the seriousness of the cause. The statute disqualifies from benefits only those employees “suspended or discharged for misconduct connected with the individual’s work.”  
  • To be “disqualifying” under the statute, the misconduct must evidence “an intentional and substantial disregard of the employer’s interests or of the employee’s duties and obligations. Mere inefficiency, unsatisfactory conduct, isolated instances, inadvertencies or good faith errors in judgment will not disqualify an employee from benefits.

The UIA’s interpretation of the preceding language has led to a somewhat novel definition of “disqualifying misconduct”.  For example, reported decisions of the UIA and the courts have ruled that:

  • While excessive, unexcused absences/tardiness for reasons within the employee’s control are considered disqualifying misconduct, they aren’t disqualifying if the employee can prove that they resulted from a situation that was beyond his/her control, such as a serious medical or psychological condition.
  • Voluntarily leaving work early on repeated occasions without prior employer authorization is usually disqualifying.
  • Refusal to work regularly scheduled Sunday or holiday hours may or may not be     disqualifying, depending on the employee’s reason.
  • Violation of the employer’s work rules forbidding wasting time, loitering or failing to wear protective gear, which may justify discharge under the employer’s rules, may not, in certain circumstances, constitute benefit disqualifying misconduct.
  • While an employer might have a right under published work rules to impose discharge for isolated violations of any particular work rule, only repeated rule violations is considered disqualifying by the UIA.
  • Absence of 10 or more consecutive days due to imprisonment for violation of law is disqualifying misconduct.

How Disputes Are Resolved 

Both the employer and the employee have a right to appeal from an Agency determination with which they disagree to an Administrative Law Judge, and from the ALJ’s decision to the UIA Appeals Committee and ultimately to court.

At Pear Sperling Eggan & Daniels, P.C. we’re experienced in advising and representing employers and employees concerning benefits disqualifying issues and have been successful in doing so. If you, as either an employer or employee, have questions concerning the right to unemployment benefits please contact Harvey Wax, or one of our other experienced employment law lawyers in Ann Arbor, at 734-665-4441 or hwax@psedlaw.com.

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