The Saunders v. UIA settlement is a $55 million class action resolution between Michigan’s Unemployment Insurance Agency and roughly 23,000 workers whose pandemic-era benefits were collected back before their protests and appeals were resolved. The Michigan Court of Claims gave final approval on May 13, 2025, and payments for timely claims were mailed on August 1, 2025.1BW Class Actions. Saunders v. UIA Class Action Settlement
Who Was Covered by the Class
The class included anyone who filed a Michigan unemployment claim between March 1, 2020, and April 25, 2024, and had money collected by the UIA while a protest or appeal was pending, after being unable to access agency services to file an appeal, or after a protest had been lost, deleted, or never processed.2Michigan Government. Saunders Notice of Settlement3Michigan Government. What You Need to Know About the UIA Overpayment Lawsuit Settlement1BW Class Actions. Saunders v. UIA Class Action Settlement
Late claims may still be accepted subject to court approval, with payments on those claims expected to be determined in the fall of 2026.1BW Class Actions. Saunders v. UIA Class Action Settlement
What the UIA Was Accused Of
The lawsuit, filed in January 2022 in the Michigan Court of Claims, alleged that the UIA engaged in “improper collection” of pandemic-era benefits. Workers were ordered to repay money, and in many cases had wages garnished or tax refunds seized, before their appeals were resolved. Some could not reach the agency to file an appeal at all; others filed protests that the agency later could not locate.2Michigan Government. Saunders Notice of Settlement
The agency later acknowledged that many of the overpayments it was trying to collect stemmed from its own errors, including eligibility criteria that did not comply with federal guidelines and an online filing system that gave misleading instructions.4Michigan Advance. Workers Shouldn’t Pay for UIA’s Latest Mistakes The UIA did not admit liability as part of the settlement.3Michigan Government. What You Need to Know About the UIA Overpayment Lawsuit Settlement
How Payments Were Calculated
The $55 million fund was non-reversionary, meaning no leftover money would go back to the state. Eligible class members received pro rata payments based on how much the agency had taken from them and not yet refunded, with one “award point” assigned for each unrefunded dollar. Workers who could document additional harm were eligible for larger “enhanced awards.”1BW Class Actions. Saunders v. UIA Class Action Settlement Fox 2 Detroit reported the average payout at roughly $1,400.5Fox 2 Detroit. Approval of $55M Michigan Class Action Lawsuit Involving Unemployment Payments Delayed
Before individual awards were calculated, the fund was reduced by litigation costs, administrative expenses, and attorney fees; plaintiffs’ counsel requested up to approximately $18.3 million. Each of the eleven named plaintiffs was eligible to request a $25,000 service award, subject to court approval.6BW Class Actions. Frequently Asked Questions1BW Class Actions. Saunders v. UIA Class Action Settlement7Michigan State Bar Foundation. Legal Assistance Relief Funds
Reforms the Settlement Required
The settlement also changed how the UIA handles collections going forward. The agency agreed to stop collecting on an overpayment until the claimant’s protest and appeal rights are fully exhausted, and to create a formal waiver process for workers who can show financial hardship, clerical error, or wage-reporting mistakes.8Michigan Advance. $55M Settlement Against State Unemployment Agency Given Preliminary Approval9Michigan Government. Michiganders Benefit From UIA Reforms Inspired by Pandemic-Era Lawsuit
UIA Director Julia Dale said the settlement allowed the agency to “focus staff and resources on customer service and the reforms we are making” and expressed commitment to “correcting past wrongs.”3Michigan Government. What You Need to Know About the UIA Overpayment Lawsuit Settlement
If You Still Owe the UIA for Pandemic Benefits
Saunders resolved claims for the roughly 23,000 class members whose money had already been collected improperly. It did not wipe out pandemic-era overpayment debts generally. In September 2025, after the court order pausing collections expired, the UIA resumed collecting on debts and sent notices to approximately 350,000 claimants for amounts totaling around $2.7 billion.4Michigan Advance. Workers Shouldn’t Pay for UIA’s Latest Mistakes Workers who cannot pay face wage garnishments, bank account seizures, and tax-refund intercepts.10Michigan Poverty Law Program. Unemployment Insurance Agency Resumes Collections
If you got one of those notices, the waiver process the settlement created is the route to challenge the debt based on hardship, clerical error, or wage-reporting mistakes. Free legal help is available in every Michigan county through the organizations funded by the settlement’s Relief Fund, including Lakeshore Legal Aid and the Michigan Advocacy Program.7Michigan State Bar Foundation. Legal Assistance Relief Funds
Legislation is also pending. The Michigan Senate unanimously passed Senate Bill 700 on December 9, 2025, which would bar the UIA from collecting improperly paid benefits more than three years after a claimant stops receiving them, require the agency to notify workers of their eligibility for time-based waivers, and apply to all claims made on or after February 1, 2020. The bill explicitly excludes cases involving intentional claimant fraud.11Fox 2 Detroit. Michigan Unemployment Overpayments: Lawmakers Push to Waive Collections on Pandemic Funds As of mid-2026, it remains in the Michigan House Committee on Appropriations and has not been signed into law.12Michigan Legislature. Senate Bill 0700