Personal tools

Issue Alert - 02-05-05

Document Actions
Date:

May 06, 2002

Issue Summary:

New Changes in the unemployment insurance program in Michigan violate federal law

Persons Affected:

Persons who lose their job who are seeking unemployment insurance benefits

For More Information:

Center for Civil Justice320 S. Washington, 2nd Floor Saginaw, MI 48607 (989) 755-3120, (800)724-7441 Fax: (989) 755-3558E-mail: info@ccj-mi.org


Background

Unemployment Insurance Benefits

What's Happening?

What does the new Michigan law say?Workers can't refuse "suitable" jobs that pay less than their former job as long as the job pays 70% or more of prior gross wages - The amendment says that if a worker refuses a job paying at least 70% of his or her prior gross wages, the worker shall be denied unemployment insurance benefits. In most circumstances, this rule is contrary to federal law. Public Act 192 amends Section 29(6) of the Michigan Employment Security Act by adding the italicized phrase at the end of the paragraph:In determining whether work is suitable for an individual, the commission shall consider the degree of risk involved to the individual's health, safety, and morals, the individual's physical fitness and prior training, the individual's length of unemployment and prospects for securing local work in the individual's customary occupation, and the distance of the available work from the individual's residence. Additionally, the commission shall consider the individual's experience and prior earnings, but an individual who refuses an offer of work determined to be suitable under this section shall be denied benefits if the pay rate for that work is at least 70% of the gross pay rate he or she received immediately before becoming unemployed.What does the federal law say?In contrast, federal law requires that each state Unemployment Insurance (UI) law must include a provision that protects certain "labor standards," 26 U.S.C. ยง3304(a)(5). (Note that there is a parallel state "labor standards" provision of Michigan law in Section 29(7) of the Michigan Act.) Again, the bold phrase is key for our purposes:[C]ompensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions:(A) if the position offered is vacant due directly to a strike, lockout, or other labor dispute;(B) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality;(C) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.What is wrong with the Michigan Law?Michigan's law, which conditions UI eligibility upon accepting any job paying at least 70 percent of the prior wage, conflicts with the federal law that requires states to consider wages, hours, and "other conditions of work" prevailing for similar local work. Under federal law, no job is suitable if the wages, hours, or other conditions of work are substantially less than those prevailing in the local labor market. The U.S. Department of Labor has issued interpretations of the "labor standards" provision and the protections it affords to UI claimants in its unemployment insurance program letters (UPIL) . Recent letters, which reaffirm guidance to the states issued by the Department in 1947 and 1968, make clear the conflicts between the recent Michigan suitable work amendment and federal law. The relevant section of the letter describes what states must do to determine if work is suitable for purposes of unemployment compensation (UC) benefits: To determine if the offered work is suitable, States conduct a two-tiered analysis. First, the work must be suitable to the individual considering his or her previous wage and skill levels. Whether the work is suitable under this test is generally a matter of State law. Second, the work must meet the requirements of Section 3304(a)(5)(B), including the 'prevailing conditions of work' requirement.* * *States may not disregard any of these factors when investigating a 'prevailing conditions' issue. An individual may not be denied UC for refusal of work if the wages, hours, or any other material condition or combination of conditions of the work offered is substantially less favorable to the individual than those prevailing in the locality for similar work.* * * *In the prevailing conditions context, the question is whether any material condition or combination of conditions render the work substantially less favorable to the worker than similar work in the locality. Factors to be considered are the actual conditions in question, the extent of difference between the offered work and similar work, and the effect such differences have on the worker. In short, an individualized consideration of all factors impinging on suitability is required by federal law, not merely a comparison of wage rates. There are clearly "suitable" jobs under state law with less than a 30 percent wage differential that nevertheless are unsuitable under federal law because of the hours and other conditions of work. By focusing solely on wage rates, Michigan's amended suitable work definition violates the federal "prevailing conditions of work" standard.

What Should Advocates Do?

At a minimum, advocates need to let affected workers know about their rights under federal law, advise them to appeal any adverse suitable work decisions, and help them obtain counsel. If you want to discuss the specifics of any particular situation, you can contact Rick McHugh at the National Employment Law Project's Midwest office at 734/426-6773 or by email at rmchugh@nelp.org.

Finding Help

Most legal aid and legal services office handle these type of cases, and they do not charge a fee. You can locate the "free" legal services or legal aid office that serves your county on the Michigan Legal Assistance Network website (http://www.mlan.net/locate.html) or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738

Donate Now!
Access to Justice Donation button