Michigan Unemployment Benefits and COVID-19

Michigan Unemployment Ben…

There has been a substantial increase in jobless claims across the State of Michigan, and the nation, in light of the COVID-19 outbreak. A number of employers have laid-off or terminated employees because they have reduced or even suspended business operations. There is reason to hope that employee layoffs and reductions will be short-lived and that employers will be recalling laid-off employees and resuming hiring after the COVID-19 pandemic is brought under control. In the meantime, many workers who have never thought about filing for unemployment benefits are rightfully inquiring about their rights and the unemployment application process.

The March 2020 Michigan Unemployment Fact Sheet

The State of Michigan publishes helpful online resources with information about unemployment benefits and the application process. The March 2020 Michigan Unemployment Insurance Agency Fact Sheet #160 provides useful information about filing for benefits and can be found here: Fact Sheet 160

Executive Order No. 2020-10

Governor Whitmer issued Executive Order No. 2020-10 on March 16, 2020. The Executive Order, which continues until April 14, 2020, expands eligibility for unemployment benefits to an entire category of workers who become unemployed or are placed on a continuing leave of absence and who: 1) have unanticipated family care responsibilities due to government directives (like school closures) or who are forced to take care of loved ones who become ill with a diagnosis of COVID-19; or 2) are sick, quarantined or immunocompromised and who do not have access to paid family and medical leave and are laid off due to exposure to COVID-19.

The Governor’s Executive Order also increases benefits from 20 to 26 weeks and states that an employer must not be charged for unemployment benefits if their employees become unemployed because of an executive order requiring them to close or limit operations.

Executive Order No. 2020-10 can be found here: Governor Whitmer Executive Order 2020-10

What about the self-employed or independent contractors?

There has been some talk that unemployment benefits may be extended in some fashion to the self-employed and to independent contractors who are not currently eligible for unemployment benefits under the law. Under the Michigan Employment Security Act, self-employed persons and independent contractors are generally not eligible to receive unemployment benefits. Whether the disqualification for the self-employed and independent contractors will be amended or not remains to be seen.

In addition, it is important to recognize that the fact that an employer and employee state that they have an “independent contractor” relationship does not mean that the employee is considered an independent contractor under the law. Instead, the Unemployment Insurance Agency will look to the “reality” of the situation, and apply various factors, to determine whether the relationship is that of an independent contractor or that of an employer-employee. For instance, if the “independent contractor” works primarily for a particular company and that company provides the individual with the tools and rules for the work to be performed, that individual may be an employee entitled to unemployment benefits even if the company calls the worker an “independent contractor.”

We are in a rapidly changing environment and there likely will be new developments at both the state and federal government levels. Workers who become unemployed should not be hesitant to seek assistance during this time of uncertainty. We should also remain hopeful, and determined, that we will get through the COVID-19 crisis. This update does not, and is not intended to, provide legal advice.

We encourage those with questions about Michigan unemployment benefits to check out the Michigan Unemployment Insurance Agency website at: https://www.michigan.gov/leo/0,5863,7-336-78421_97241---,00.html

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