Saunders v. UIA: Eligibility, Payouts, and Pending Legislation

The Saunders v. UIA Michigan unemployment settlement is a $55 million class action resolution, approved by the Michigan Court of Claims on May 13, 2025, that pays roughly 23,000 people from whom the state’s Unemployment Insurance Agency collected pandemic-era benefits while their protests or appeals were still pending, after they tried and failed to access UIA services to appeal, or after they submitted appeals the agency never processed or deleted.¹² The state did not admit liability.

Who Was Eligible

The class covered people from whom the UIA collected money, by any method, on unemployment claims filed between March 1, 2020, and April 25, 2024, in any of three situations:

Collection occurred while a timely protest or appeal was pending.
The claimant tried to appeal but could not access UIA services.
The claimant submitted an appeal that was never processed or was deleted.¹

Michigan law bars the agency from collecting on a claim while an appeal is active, but the UIA’s MiWAM software could not distinguish between fully adjudicated debts and debts still under challenge, so collections went out either way.³

How Much Class Members Received

The $55 million went into a non-reversionary Qualified Settlement Fund. After attorneys’ fees, litigation costs, administrative expenses, and service awards for the 11 named plaintiffs, the balance was distributed pro rata: each class member received one award point for every dollar the UIA had collected and not yet refunded.¹ Reporting estimated an average payout of about $1,400 per person across roughly 23,000 eligible participants.²

Class members who could document additional hardships were eligible to apply for enhanced awards.¹ The final order also created a reserve fund for late claims and a relief fund administered by the State Bar Foundation to support legal assistance services.⁴

Key Dates

The Court of Claims granted preliminary approval on April 25, 2024.⁵⁶⁷ The claim window has closed; new claims under the Saunders settlement itself can no longer be filed, though the final order established a reserve for late claims.⁴

What Happened After the Settlement

A separate point worth knowing if you’re a Michigan claimant: the Saunders settlement resolved past improper collections, but it did not end UIA collection activity going forward. Court of Claims Judge Brock Swartzle had frozen all UIA collection efforts beginning in December 2022, and that injunction held through May 2025. Once it lifted, the UIA restarted overpayment collections on September 29, 2025, after sending notices on September 12, 2025, to more than 350,000 people seeking roughly $2.7 billion in pandemic-era overpayments. UIA Director Jason Palmer said the agency had a “legal and fiduciary duty” to pursue the money.⁸

The Sugar Law Center reported that some claimants who had already won their eligibility appeals received repayment demands anyway. Deputy legal director Tony Paris cited one claimant found eligible for benefits after a hearing the UIA never appealed who was then billed about $30,000.⁹ Nonresponse can lead to wage garnishment, bank levies, and tax refund seizures.¹⁰

Michigan law allows waivers based on financial hardship, agency error, or incorrect wage information, but the UIA’s current system only supports hardship requests. The agency said waivers for agency error or wage discrepancies cannot be processed until its new MiUI system launches. The employer-side rollout, originally planned for December 2025, was delayed, and the claimant-side transition is targeted for summer 2026.⁸¹¹

Pending Legislation

On December 9, 2025, the Michigan Senate unanimously passed Senate Bill 700, which would bar the UIA from collecting improperly paid benefits more than three years after a claimant stopped receiving them. The bill would apply retroactively to claims filed on or after February 1, 2020, would not shield claimants found to have committed fraud, would require the UIA to notify claimants when they become eligible for a time-based waiver, and would create a formal appeals process for waiver requests.¹⁰ After its first House reading on December 10, 2025, SB 700 was referred to the House Committee on Appropriations. As of mid-2026, the House has not voted on the bill, and it has not been signed into law.¹²

1
Michigan Attorney General. Saunders Notice of Settlement
2
WDET. Final Hearing Pushed in Pandemic Era Class Action Against UIA
3
Michigan Legislature and Economic Opportunity. What You Need to Know About the UIA Overpayment Lawsuit Settlement
4
BW Class Actions. Saunders v UIA Improper Collections Class Action
5
Michigan Advance. $55M Settlement Against State Unemployment Agency Given Preliminary Approval
6
BW Class Actions. Frequently Asked Questions
7
Fox 2 Detroit. Approval of $55M Michigan Class Action Lawsuit Involving Unemployment Payments Delayed
8
Michigan League for Public Policy. Breaking Down the New Wave of Unemployment Related Collections
9
Sugar Law Center. Workers Who Received Unemployment Insurance During the Pandemic Receive Surprise Bills From the State
10
Michigan Advance. Workers Shouldn’t Pay for UIA’s Latest Mistakes
11
Small Business Association of Michigan. Michigan’s Unemployment Insurance Agency Delays the Rollout of MiUI System
12
Michigan Legislature. Senate Bill 0700