September 4, 2013, Introduced by Rep. Foster and referred to the Committee on Commerce.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 54 (MCL 421.54), as amended by 2011 PA 269.
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 include the amount described in subdivision (i)
and shall also include 1 or more of the following penalties:
(A)
Subject to redesignation under subsection (m), (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 include the amount
described in subdivision (iii) and shall also include 1 or more of
the following penalties:
(A)
Subject to redesignation under subsection (m)(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 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 follows, notwithstanding any other penalties
imposed under any other statute of this state or of the United
States:
(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, 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, the unemployment agency may recover
damages equal to 4 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, the unemployment
agency shall attempt to 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 4 times that amount. 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 this subdivision,
the recovery sought by the prosecutor shall include the amount
described in this subdivision 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 (m), (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, then a recovery shall be sought 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 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 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
until
the end of the next day which 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 $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, 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 that the failure to
submit the report was due to reasonable cause, a fine shall not be
imposed. 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 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 individual has violated
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 under subsection (a)
shall 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 be credited to the penalty and interest account of the
contingent fund. Amounts recovered by the commission under
subsections (c), (d), (e), and (f) shall be credited to the penalty
and interest account of the contingent fund in accordance with
section 10(6).
(k) Amounts recovered by the unemployment agency under
subsection
(b) shall be credited as follows:in the following order:
(i) Deductions from unemployment insurance benefits
shall be
applied
solely to the amount of the benefits liable to be repaid
under
this section.
(ii) All other recoveries shall be applied first to
repayment
amounts
owed, which shall be deposited in the unemployment
compensation
fund; then to administrative sanctions and damages;
and
then to interest. The amounts applied to administrative
sanctions,
damages, and interest shall be credited to the
contingent
fund.
(l) The revisions in the penalties in subsections (a)
and (b)
provided
by the 1991 amendatory act that added this subsection
apply
to conduct that began before April 1, 1992, but that
continued
on or after April 1, 1992, and to conduct that began on
or
after April 1, 1992.
(i) From the penalties assessed, an amount equal to 15% of any
benefit overpayments resulting from fraud shall 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 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.
(l) (m)
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
section
subsection (a)(ii)(A) or (iv)(A) or section subsection
(b)(ii)(A).
Enacting section 1. This amendatory act applies to a deduction
or recovery made pursuant to a determination or redetermination
issued after October 21, 2013.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 4950(request no.
02824'13).
(b) Senate Bill No.____ or House Bill No. 4952(request no.
02826'13).
(c) Senate Bill No.____ or House Bill No. 4949(request no.
02987'13).
(d) Senate Bill No.____ or House Bill No. 4954(request no.
03302'13).
(e) Senate Bill No.____ or House Bill No.____ (request no.
03440'13).