Michigan Unemployment Lawsuits: Saunders Settlement and SB 700

The largest recent Michigan unemployment lawsuit settlement is Saunders v. State of Michigan Unemployment Insurance Agency, a $55 million class action that received final court approval on May 13, 2025, with the first payments mailed to class members on August 1, 2025.¹ If you had pandemic unemployment benefits later flagged as an overpayment, you may be part of that class, and you may also be one of the roughly 350,000 Michigan residents the UIA started billing again in September 2025 as it works to recover approximately $2.7 billion in pandemic-era overpayments.²

Who the Saunders Settlement Covers

The case was filed in the Michigan Court of Claims in early 2022 as case number 22-000007-MM, with Kellie Saunders and ten other named plaintiffs suing the Unemployment Insurance Agency and its director, Julia Dale.³ The complaint alleged that the UIA collected money from workers who had filed protests or appeals of overpayment decisions before those appeals were resolved, or in cases where workers tried to appeal but couldn’t access the system or had their appeals deleted or never processed.⁴

The class covers more than 23,000 Michigan residents who applied for unemployment benefits during the pandemic and were later told to repay those funds.⁵ The covered benefit filings run from March 1, 2020, through April 25, 2024.⁴ A December 2022 preliminary injunction had blocked the UIA from collecting on disputed overpayments while the case was pending, freezing collections for about five years.⁶

The UIA denied all claims of wrongdoing, and no judgment on liability was entered; the parties settled to avoid the cost and risk of trial.³

How Much You Get and When

There is no fixed per-person payout. Each class member receives one “Common Fund award point” for every dollar the UIA collected from them that hadn’t already been refunded, and payments are then calculated pro rata from the net fund based on those points. Class members who suffered additional harm could apply for enhanced awards by submitting documentation.³

Before payments reach class members, the $55 million fund is reduced by attorneys’ fees, litigation costs, administrative expenses, and $25,000 service payments to each of the eleven named plaintiffs. Class counsel at Blanchard & Walker PLLC requested fees of up to one-third of the fund, roughly $18.3 million, subject to court approval. The fund is non-reversionary, so any unused money stays in the fund rather than going back to the state.⁴

The claims administrator is Analytics Consulting LLC. Payments on valid claims filed by the December 20, 2024 deadline were mailed August 1, 2025.¹

If You Missed the Claim Deadline

The court established a Reserve Fund for late claims. You can still submit a late claim through the settlement website, but any payments on late claims require additional court approval and aren’t expected to be resolved until fall 2026. For questions about your claim or the settlement, you can reach the administrator at 1-866-499-4565 or info@bwclassactions.com.¹

Collections Have Restarted on $2.7 Billion in Overpayments

The Saunders settlement resolves a narrow issue: money the UIA already took from workers whose appeals weren’t resolved. It does not forgive the underlying overpayment debts. When final approval was entered in May 2025, the preliminary injunction that had blocked collections dissolved.⁶

Collections officially resumed September 29, 2025, and roughly 350,000 people received notices that they owed money, totaling about $2.7 billion.² The overpayments largely resulted from the agency’s use of eligibility criteria that didn’t comply with federal guidelines, combined with a flawed online system and confusing instructions during the early months of the pandemic.⁷

The Sugar Law Center reported that some notices went to people who had already won appeal hearings confirming their eligibility, including one client who won a final, unappealed hearing in September 2024 and later received a bill for roughly $30,000.² The UIA has said it has a fiduciary obligation to collect the debts. Without legislative action, affected workers face wage garnishment, bank account levies, and seizure of tax refunds.⁸

Senate Bill 700 Could Wipe the Debts Out

On December 9, 2025, the Michigan Senate unanimously passed Senate Bill 700, sponsored by Senator Darrin Camilleri, by a vote of 35–0.⁹ The bill would:

Require the UIA to treat pandemic-era benefits paid between February 7, 2020, and September 5, 2021, as administrative errors and waive recovery of those funds.
Impose a three-year statute of limitations on collecting improperly paid benefits for any claims made on or after February 1, 2020.
Require the UIA to notify claimants about eligibility for time-based waivers and provide a process for appeals.
Exclude overpayments resulting from intentional fraud or identity theft, which would remain collectible.¹⁰

The bill was received by the House on December 10, 2025, and referred to the Committee on Appropriations. As of mid-2026, there are no recorded House floor votes or further action beyond that committee referral.⁹ Until the bill moves or dies, the UIA is still collecting.

If You Got a Collection Notice

Workers who believe they were billed in error can request financial hardship waivers or file protests through their MiWAM accounts.¹¹ Reforms taking effect in July 2026 expand how often you can apply for a financial hardship waiver, from one every six months to up to four per year.¹²

Being in the Saunders class and getting a new collection notice are not mutually exclusive. The settlement reimbursed money the agency took during the appeal process; the current collection notices are the agency going after the underlying overpayment balance now that the injunction has lifted. If you received a Saunders payment and also a new bill, both can be accurate.

The Earlier Bauserman Settlement Is a Separate Case

If you were falsely accused of unemployment fraud years before the pandemic, that is a different lawsuit. Bauserman v. Unemployment Insurance Agency was a class action on behalf of approximately 3,000 people falsely accused of fraud by the state’s Michigan Integrated Data Automated System, known as MiDAS, between October 2013 and August 2015. The parties reached a $20 million settlement, and the Michigan Court of Claims granted final approval in late January 2024.¹³ Potential class members had to return signed release forms by August 19, 2024 to remain eligible for payment.¹⁴ That window has closed, and Bauserman does not cover pandemic-era claims; those are the Saunders class.

1
BW Class Actions. Saunders v UIA Improper Collections Class Action
2
Sugar Law Center. Workers Who Received Unemployment Insurance During the Pandemic Receive Surprise Bills From the State
3
BW Class Actions. Frequently Asked Questions
4
Michigan Attorney General. Saunders Notice of Settlement
5
Fox 2 Detroit. Approval of $55M Michigan Class Action Lawsuit Involving Unemployment Payments Delayed
6
Detroit Free Press. Michigan Overpaid COVID Unemployment Benefits
7
Michigan Advance. Workers Shouldn’t Pay for UIA’s Latest Mistakes
8
Michigan League for Public Policy. Workers Shouldn’t Pay for UIA’s Latest Mistakes
9
Michigan Legislature. Senate Bill 0700
10
Michigan Legislature Conference. Senate Votes to Forgive Unemployment Overpayments
11
Michigan Department of Labor and Economic Opportunity. PUA Overpayment and Restitution
12
Michigan Department of Labor and Economic Opportunity. Law Changes
13
Michigan Attorney General. Class Action Settlement Approved by Court of Claims
14
Michigan Department of Labor and Economic Opportunity. Claimants in Bauserman Case Against UIA Must Return Signed Release by Aug 19