Labor Law Center Blog » Blog Archive » More on Michigan Going After Unemployment Fraud

More on Michigan Going After Unemployment Fraud

January 4th, 2007 Posted by Mark

We already mentioned how Michigan’s legislature is considering laws to close up any remaining loopholes that SUTA dumpers may be able to find in the state’s labor laws on unemployment insurance taxes. And in the meantime, many forms of unemployment insurance fraud are already illegal in the state.

Accordingly, Michigan’s Unemployment Insurance Agency has also announced at this time that it is forming a task force focused solely on this issue of SUTA dumping. The new team will be located in its Tax Office. Its primary goal will be to locate employers in the state of Michigan who appear to be cheating the unemployment insurance tax system through SUTA dumping. It will also be tasked with finding out just how much damage these employers are doing to the unemployment insurance system.

Their ultimate goal at the task force—make sure that the even playing field designed by the state labor laws on unemployment insurance taxes are maintained. After all, there are clear cut and set laws that determine exactly how much an employer pays in unemployment insurance taxes. There isn’t supposed to be favoritism for one employer, and one employer shouldn’t have to pay more of a burden just because of the guile of a fellow employer. All employer are meant to pay fairly into the trust fund (get it—“trust” fund).

The state of Michigan will, though, allow employers who think they have been duped by tax advisors to follow this illegal practice to report them to the Unemployment Insurance Agency’s Tax Division. If an employer voluntarily hands themselves in, the state could reduce their penalty in response. Even if an employer didn’t get “duped” into SUTA dumping, they can still come forward and confess and expect lower penalties.

Otherwise, Michigan expects to catch SUTA dumpers and charge them four times the amount of taxes that they cheated the system, plus interest charges for late payment.