The Michigan unemployment settlement is a $55 million class action resolution in Saunders v. Unemployment Insurance Agency that paid an average of about $1,400 to roughly 23,000 workers from whom the state collected pandemic-era overpayments before their protests or appeals were decided. A Michigan court gave the deal final approval on May 13, 2025, and payments to on-time claimants were mailed August 1, 2025.1Michigan Department of Labor and Economic Opportunity. New Date Set for Final Hearing in Pandemic-Era Class Action Against UIA The UIA did not admit wrongdoing.2FOX 2 Detroit. Approval of $55M Michigan Class Action Lawsuit Involving Unemployment Payments Delayed
What the Lawsuit Was About
Eleven named plaintiffs filed Kellie Saunders, et al. v. State of Michigan Unemployment Insurance Agency, et al. in the Michigan Court of Claims in January 2022 (case number 22-000007-MM). The core allegation was that the UIA took money from claimants on pandemic-era overpayment determinations while their challenges were still pending. In some cases a timely appeal was in process. In others, claimants had tried to appeal but could not reach the agency. In still others, protests were never processed or were deleted outright.3Michigan Attorney General. Saunders v. UIA Notice of Settlement
Class counsel David Blanchard also pointed to agency form defects, including a question that asked claimants to report “gross income” but was later treated by the UIA as requiring “net income,” turning accurate answers into the basis for false-reporting findings.4Super Lawyers. Fixing Michigan’s Unemployment Problem In June 2022, Chief Judge Brock Swartzle ordered the UIA to halt all overpayment collections on claims going back to March 2020, a freeze that held for more than three years.5Michigan House of Representatives. UIA Committee Testimony
The case covered unemployment claims filed between March 1, 2020, and April 25, 2024.3Michigan Attorney General. Saunders v. UIA Notice of Settlement
Who Qualified and What They Received
Eligible class members were Michigan workers from whom the UIA actually collected money on pandemic-era claims before their protest or appeal was resolved. The $55 million fund is non-reversionary, so no leftover money returns to the state.6Michigan Department of Labor and Economic Opportunity. What You Need to Know About the UIA Overpayment Lawsuit Settlement
Payouts were calculated pro rata. Each claimant received “award points” tied to the dollars the agency had collected from them, with additional points available to those who submitted documentation of enhanced harm. The final per-person amount depended on the total number of valid claims after attorneys’ fees, litigation costs, and administrative expenses were deducted.3Michigan Attorney General. Saunders v. UIA Notice of Settlement The average on-time payout came to just over $1,400.1Michigan Department of Labor and Economic Opportunity. New Date Set for Final Hearing in Pandemic-Era Class Action Against UIA
The settlement does not cover every Michigan worker who received a pandemic-era overpayment notice. It covers only those from whom money was collected before their challenge was resolved. Workers who owe overpayments the UIA never collected on are not part of the class and are instead subject to the collections that resumed in September 2025.
Key Dates and Late Claims
The deadline to file a claim, opt out, or object was November 4, 2024. The claims administrator stopped accepting new participants on December 20, 2024.2FOX 2 Detroit. Approval of $55M Michigan Class Action Lawsuit Involving Unemployment Payments Delayed Notice went out by email and through Michigan Web Account Manager (MiWAM) accounts under the heading “Saunders v. UIA Improper Collections Alert.”7Click On Detroit. How to File a Claim in Michigan Unemployment Overpayment Lawsuit
The final approval hearing, originally set for March 20, 2025, was moved by Judge Swartzle to April 24, 2025, in Lansing.8WDET. Final Hearing Pushed in Pandemic-Era Class Action Against UIA The court entered its final order on May 13, 2025, establishing the common fund, a Reserve Fund for late claims, and a Relief Fund administered by the Michigan State Bar Foundation.9BW Class Actions. Saunders v. UIA Settlement On-time checks mailed August 1, 2025.
People who missed the December 2024 cutoff can still submit late claims, but those are paid out of the Reserve Fund and require separate court approval. Decisions on valid late claims are expected by fall 2026.9BW Class Actions. Saunders v. UIA Settlement The Relief Fund has been distributed as grants to five legal aid organizations, including Lakeshore Legal Aid, the Michigan Advocacy Program, and the Sugar Law Center for Economic and Social Justice, to expand free representation for unemployment claimants.10Michigan State Bar Foundation. Legal Assistance Relief Funds
Collections Have Resumed: What That Means Now
The final order dissolved the injunction that had blocked overpayment collections since mid-2022. Overpayment notices began appearing in claimant accounts on September 9, 2025, formal collection notices followed on September 12, and the first repayments were due September 29, 2025.11Michigan Poverty Law Program. Unemployment Insurance Agency Resumes Collections on Overpaid Unemployment Benefits The UIA has estimated the resumed collections involve nearly $2.7 billion owed by about 350,000 claimants, a much larger population than the 23,000 covered by the Saunders class.12Michigan Advance. Workers Shouldn’t Pay for UIA’s Latest Mistakes
If you have received a notice, Michigan law allows you to request a waiver of a non-fraud overpayment in three situations: you provided incorrect wage information without intent to deceive, your household income is at or below 150% of the federal poverty line, or the overpayment resulted from administrative error by the agency.5Michigan House of Representatives. UIA Committee Testimony There is a practical gap. As of early 2026, the UIA was only providing a form for the financial hardship category, telling staff that requests under the other two categories could not be processed until a new software system came online.13Michigan League for Public Policy. Breaking Down the New Wave of Unemployment-Related Collections Legal aid groups have created unofficial forms so claimants can document the other two types of requests in the interim.
Ignoring a collection notice carries real consequences. The UIA can garnish wages, levy bank accounts, and seize state tax refunds.13Michigan League for Public Policy. Breaking Down the New Wave of Unemployment-Related Collections As part of the settlement, the agency committed to refraining from collecting until a claimant’s protest and appeal rights are fully exhausted, and to informing claimants of their waiver rights.14Michigan Department of Labor and Economic Opportunity. Michiganders Benefit From UIA Reforms Inspired by Pandemic-Era Lawsuit
Pending Legislation
On December 9, 2025, the Michigan Senate unanimously passed Senate Bill 700, which would impose a three-year statute of limitations on UIA overpayment collections for claims filed on or after February 1, 2020, require the agency to notify claimants of time-based waiver eligibility, and provide an appeals mechanism. Fraud cases would be excluded.12Michigan Advance. Workers Shouldn’t Pay for UIA’s Latest Mistakes The bill was referred to the House Appropriations Committee the next day and has not advanced further as of mid-2026.15Fast Democracy. Michigan SB 700 Bill Tracker Until it does, the collection rules in effect when your notice arrived are the ones that apply to you.