16. Procedures/Appeals

Knox v. Right At Home Southeastern MI Inc. – 16.90

Knox v. Right At Home Southeastern MI Inc.
Digest No. 16.90

Section 421.29; Section 421.32a; Section 421.62; Section 421.33

Cite as: Knox v Right At Home Southeastern MI Inc, unpublished opinion of the Michigan Compensation Appellate Commission, issued July 29, 2016 (Docket No. 15-018792-247172W).

Appeal pending: No
Claimant: Teresa R. Knox
Employer: Right at Home Southeastern MI Inc.
Date of decision: July 29, 2016

View/download the full decision

HOLDING: Under Section 421.32a, the Agency cannot reconsider a prior determination or redetermination more than one year from the date of mailing or personal service of the original determination on the disputed issue. All adjudications issued by the Agency that are contrary to this rule are void and must be set aside. All ALJ decisions made after the Agency improperly transferred over a case due to a violation of Section 421.32a are to be set aside as well.

FACTS: In February 2012, the Unemployment Insurance Agency (UIA) issued a Notice of Determination holding the claimant disqualified from receipt of unemployment insurance benefits under Section 421.29(1)(a). In June 2014, more than two years after the February 2012 Determination was issued, the Agency, on its own motion, reconsidered the Determination and issued a June 25, 2014 Redetermination. A March 2015 Redetermination held the claimant disqualified from receipt of unemployment insurance benefits under the voluntary leaving provisions of Section 421.29(1)(a) and held the claimant subject to restitution under Section 421.62(a). A November 2015 ALJ decision affirmed the March 2015 Redetermination. The claimant timely appealed to the Michigan Compensation Appellate Commission (MCAC) from the November 2015 ALJ decision.

DECISION: The November 2015 ALJ decision is set aside. The June 25, 2014 Redetermination and all subsequent Agency adjudications are set aside. The February 2012 Determination is a final ruling on this matter. Therefore Claimant is disqualified from receipt of benefits but Claimant is not subject to restitution.


Section 421.32a(2) provides that the Agency may, for good cause, reconsider a prior determination or redetermination after the 30 day period has expired, but that a reconsideration shall not be made unless the request is filed with the UIA, or reconsideration is initiated by the UIA with notice to the interested parties, within one year from the date of mailing or personal service of the original determination on the disputed issue.

The Michigan Supreme Court held in Roman Cleanser v Murphy, 386 Mich 698 (1972) that the doctrines of res judicata and collateral estoppel apply to an Agency ruling that has become “final” under Section 421.32a(2). As a result, the February 2012 Determination, which did not include any ruling on restitution under Section 421.62(a), is a final ruling. Therefore the June 25, 2014 Redetermination is void and must be set aside as the Agency had no legal authority to issue that ruling. All adjudications issued by the Agency after the June 25, 2014 Redetermination are void and must be set aside.

In addition, because the June 25, 2014 Redetermination was not in accordance with Section 421.32a, under Section 421.33 (“An appeal from a redetermination issued . . . in accordance with section 32a or a matter transferred for hearing and decision in accordance with section 32a shall be referred to the Michigan administrative hearing system for assignment to an administrative law judge”), the Agency was without authority to transfer the matter for hearing and assignment to an ALJ.

Digest author: Winne Chen, Michigan Law, Class of 2017
Digest updated: 10/31/2017

16. Procedures/Appeals Article

Article: Legally Insufficient Notice and UIA Determinations

Legally Insufficient Notice and Unemployment Insurance Agency Determinations
By: Leila McClure, Marina Hunt, and Steve Gray
University of Michigan Law School Unemployment Insurance Clinic
April 2016

Sections: 421.32a, 421.33

Download a PDF version of this article

Frequently, unemployment insurance claimants and employers must rely only on short letter determinations and redeterminations (notices) they receive from the Agency that provide little or no information about why the Agency has taken the action of which it is notifying the party. This confuses most parties and can often prevent them from adequately responding to a negative action taken against them by the Agency. The sparse or confusing notices prevent them from either making, effective protest and appeal decisions, or unable to prepare for hearings. The following article discusses the circumstances in which Agency  notices are legally insufficient and what effect that should have on administrative proceedings.

Agency Required to Comply with US Department of Labor Standards
In the administration of its duties enumerated in the Michigan Employment Security Act, the State of Michigan must “cooperate with the appropriate agency of the United States under the Social Security Act.” M.C.L. 421.11(a). Per this requirement, the Unemployment Insurance agency is statutorily required to comply with relevant regulations promulgated by the Department of Labor.

Relevant Department of Labor Notice Standard
Section 6013 of Appendix A to Part 602 of the Employment Security Manual requires the State of Michigan to include “in written notices of determination furnished to claimants sufficient information to enable them to understand the determinations, the reasons therefor, and their rights to protest, request reconsideration, or appeal.” 20 CFR § 602 App. A, 6013(C)(2)

With regards to disqualification from benefits, the Department of Labor provides that: “If a disqualification is imposed, or if the claimant is declared ineligible for one or more weeks, he must be given not only a statement of the period of disqualification or ineligibility and the amount of wage-credit reductions, if any, but also an explanation of the reason for the ineligibility or disqualification. This explanation must be sufficiently detailed so that he will understand why he is ineligible or why he has been disqualified, and what he must do in order to requalify for benefits or purge the disqualification. The statement must be individualized to indicate the facts upon which the determination was based, e.g., state, “It is found that you left your work with Blank Company because you were tired of working; the separation was voluntary, and the reason does not constitute good cause,” rather than merely the phrase “voluntary quit.” Checking a box as to the reason for the disqualification is not a sufficiently detailed explanation. However, this statement of the reason for the disqualification need not be a restatement of all facts considered in arriving at the determination.” 20 CFR § 602 App. A, 6013(C)(2)(h) (2012) (Emphasis Added).

In the Department of Labor Advisory, Unemployment Insurance Program Letter, No. 01-16 concerning “Federal Requirements to Protect Individual Rights in State Unemployment Compensation Overpayment Prevention and Recovery Procedures, the Department of Labor specifically instructed on what qualifies as sufficient notice for fraud determinations. To satisfy federal law, the individual accused of fraud must “be provided with a written determination which provides sufficient information to understand the basis for the determination and how/when an appeal must be filed and must also include the facts on which the determination is based, the reason for allowing or denying benefits, the legal basis for the determination, and potential penalties or consequences.” USDOL Unemployment Insurance Program Letter No. 1-16, page 2 (emphasis added). The Letter also provides a description of the information that must be included in a written determination:

  1. A summary statement of the material facts on which the determination is based;
  2. The reason for allowing or denying benefits; and
  3. The conclusion of the decision based on the state’s law

Relevant Michigan Law
In Snyder v. RAM Broadcasting, No. 82 23718 AE, Washtenaw Circuit Court (April 26, 1983) (Digest No. 16.39), the Circuit Court held that a “Notice of Hearing which [does] not give a plain statement that claimant’s eligibility pursuant to Section 28(1)(a)… might be raised was not an adequate notice of the issue when it merely used the words ‘Ability/Availability/Seeking Work/Eligibility.’” The reasoning the court used in deciding this notice was inadequate was that it was “not a plain statement of the matters asserted,” meaning that “words and phrases divided by slashes and followed by a string citation to given sections of the Act do not provide a reasonably understandable notification that an issue will be considered, especially where the notification is intended for a lay person.”

Recently in Proulx v. Horiba Subsidiary Inc., 14-006880-241108 (Oct. 2, 2014) (Digest No. 18.21), an unpublished decision by the Michigan Compensation Appellate Commission (MCAC), the body held in part that the agency’s fraud redetermination was insufficient because “it merely provide[d] a conclusory statement with no fact-finding to support it.”

Agency Practice
The Unemployment Agency’s practice of sending conclusory statements of disqualification or findings of misrepresentation violates both the mandatory Department of Labor standards and existing Michigan law. Examples of insufficient notice under the Department of Labor standard include:

  • “Your actions indicate you intentionally misled and/or concealed information to obtain benefits you were not entitled to receive”
  • “You quit your job with COMPANY on DATE due to other personal reasons”
  • Redeterminations including only the underlying issue and relevant statute number, such as: “Ability 28(1)(c)”

Good Cause to Re-Open
Pursuant to UIA Rule 270(1)(e), ““fail[ure] to receive a reasonable and timely notice” is good cause for reconsideration and reopening. Section 32(a) of the MESA provides that “the claimant and other interested parties shall be promptly notified of the determination and the reasons for the determination.” Based on the failure to comply with Department of Labor standards and existing Michigan law, any agency determination or redetermination is void if it does not include:

  • An explanation of the reason for the ineligibility or disqualification that is sufficiently detailed so that the claimant knows why he or she is ineligible
  • Information about what the claimant must do to appeal or requalify for benefits
  • Individualized facts to indicate how the decision was reached

Effect of Insufficient Notice

Void ab initio
Insufficient notice of an agency decision makes that decision null and can be treated as void ab initio. The Michigan Court of Appeals has held that a failure to give proper notice as required by the applicable statute “is a jurisdictional defect that renders the subsequent proceedings void.” Kanouse v Montcalm County Drain Comm’r, unpublished opinion per curium of the Court of Appeals, issued March 19, 2002 (Docket No. 236285), p 2. Likewise, the Court of Appeals held in a workers’ compensation case that improper notice renders a subsequent judgment potentially voidable. Abbott v Howard, 182 Mich App 243 (1990).

Procedural Due Process
The notion that insufficient notice renders a subsequent decision void also comes from a two-step analysis:

(1) Inadequate notice is a violation of procedural due process rights, and

(2) Decisions that relied on a lack of due process cannot be sustained.

Under step (1), it is clear from U.S. Supreme Court jurisprudence that proper notice is fundamental to due process. See, e.g., Mullane v Central Hanover Bank & Trust Co., 339 US 306 (1950). In a case specifically about the rights of welfare recipients, the U.S. Supreme Court said that due process requires “timely and adequate notice detailing the reasons for” an agency decision, and“[t]hese rights are important in cases such as those before us, where recipients have challenged proposed terminations.” Goldberg v Kelly, 397 US 254 (1970). See also Cosby v Ward, 843 F2d 967 (CA 7, 1988) (failure to provide adequate written notice of issues to be raised at unemployment compensation hearing violated fair hearing requirement).

Under step (2), courts have voided judgments that were founded on violations of procedural due process. Often these cases fall under procedural rules such as FRCP 60(b)(4) and MRCP 2.612(c)(1)(d), which allow courts to provide relief from judgments that are void. Courts have interpreted those rules as applying to judgments that arose from inadequate process. See, e.g., In re Ruehle, 307 BR 28 (Bankr CA 6, 2004) (upholding a lower court’s decision to vacate an order where one party was denied due process of law).

Lack of Jurisdiction

An ALJ’s Authority
Where there is an occurrence of insufficient notice or a void determination, an Administrative Law Judge has the authority to dismiss or adjourn a hearing based on lack of jurisdiction over the matter. An ALJ’s authority to return jurisdiction can be inferred from both the Michigan Employment Security Act and the MAHS hearing rules issued by LARA. Section 33 of the Act authorizes MAHS to accept cases on appeal and then give them to Administrative Law Judges so long as they deal with redeterminations issued by the agency in accordance with Section 32a. MESA 421.33(1). Section 32a(1) details the agency’s decision-making process, by which a determination or redetermination is issued at each step, followed by “a hearing on the redetermination before an administrative law judge.” MESA 421.32a(1). According to these rules, the ability to have a hearing with an ALJ is contingent upon the existence of an agency decision. Without a valid determination or redetermination, the judge does not have jurisdiction over the case under MESA.

Also, it is standard practice for an ALJ to return a matter to the Agency when they can’t find an Agency determination to support it. ALJs commonly return matters to the Agency when no determination can be found in their system or in the hearing file.  Legally insufficient notice is akin to that situation.

The administrative hearing rules, issued by LARA for MAHS, support the principle that the ALJ has broad discretion in deciding how to handle a case, including issues that arise before or after hearings and questions of jurisdiction. For example, Rule 106 contains a lengthy list of powers that the ALJ has, including the power to, “on an administrative law judge’s own initiative, adjourn hearings.” Department of Licensing and Regulatory Affairs Michigan Administrative Hearing System Administrative Hearing Rules (eff. January 15, 2015), R 792.10106(1)(o). In addition, Rule 110 allows the ALJ to decline to consider a document that was not properly served on all parties, which is another form of inadequate notice. Id. R 792.10110(8).

Application to Good Cause
The fact that a claimant or employer received insufficient notice in the determinations provides her with good cause for filing a late appeal. The Agency’s administrative code provides that ‘good cause’ for reconsideration under MCL 421.32a includes among other things failure “to receive a reasonable and timely notice, order, or decision.” Mich Admin Code R 421.270(1)(e). Where a determination is legally insufficient on its face, it does not provide reasonable notice as required by 270(1)(e). On that basis, there is good cause for reopening, rehearing, or late appeals.

Appropriate Remedies
There are two possible appropriate remedies when the UIA has provided notice that does not meet the Department of Labor standards. First, a notice could be deemed unreasonable on its face. With a finding of unreasonable notice, the notice can be voided and jurisdiction should return to the Agency to issue a notice that complies with the above-mentioned standards. Alternatively, the unreasonable notice could form the basis for good cause for reopening or late appeal. Under a finding for good cause for reopening or late appeal, a case would then proceed on the underlying merits of the unemployment claim.

About the Authors

– Leila McClure, University of Michigan Law School, Class of 2016

– Marina Hunt, University of Michigan Law School Class of 2017

– Steve Gray, Clinical Assistant Professor and Director of the University of Michigan Law School Unemployment Insurance Clinic

08. Filing for Benefits, Reporting 16. Procedures/Appeals

Bouier v. DAFS Indianapolis-Army Military Pay – 16.74

Bouier v. DAFS Indianapolis-Army Military Pay
Digest No. 16.74

Section 421.210 (repealed and replaced by Section 421.32a)

Cite as: Bouier v DAFS Indianapolis-Army Military Pay, unpublished opinion of the Macomb County Circuit Court, issued August 30, 2007 (Docket No. 2007-1505-AE).

Appeal pending: No
Claimant: Everett Bouier, Jr.
Employer: DFAS Indianapolis-Army Military Pay
Date of decision: August 30, 2007

View/download the full decision

HOLDING: A claimant must file his application for benefits within the fourteen day grace period under Section 421.210 (repealed and replaced by Section 421.32a).

FACTS: Claimant separated from the military on April 2, 2006. Upon his separation, Claimant was told by his former employer to go to his local employment office. He was also advised that he would not be eligible to receive unemployment benefits. Claimant believed that the purpose for visiting the unemployment office was to find a new job, not to file for unemployment benefits. Because he was unaware of his eligibility, Claimant did not file for benefits until June 18, 2006. On filing, Claimant requested payments backdated to his original separation date of April 2, 2006.

DECISION: Claimant is not eligible for backdating of benefits to his original separation date. Appeal is dismissed.

RATIONALE: Because Claimant failed to file his application for benefits within the fourteen day grace period under Section 421.210 (repealed and replaced by Section 421.32a), Claimant was ineligible to receive benefits backdated to his initial separation. Section 421.210 (repealed and replaced by Section 421.32a) only allows backdating to the claimant’s separation date if the benefit application is timely filed within fourteen days of the Friday after the end of the week in which the claimant became unemployed. The plain language of the Agency’s rules supports this determination.

Digest author: Winne Chen, Michigan Law, Class of 2017
Digest updated: October 11, 2017

16. Procedures/Appeals

Pinecrest Custom Homes v Meines – 16.70

Pinecrest Custom Homes v Meines
Digest no. 16.70

Section 32a

Cite as: Pinecrest Custom Homes v Meines, unpublished opinion of the Kent Circuit Court, issued October 8, 2002 (Docket No. 02-03823-AE).

Appeal pending: No
Claimant: Janis Meines
Employer: Pinecrest Custom Homes
Docket no.: B2001-14696-RM1-161795
Date of decision: October 8, 2002

View/download the full document

CIRCUIT COURT HOLDING: Detrimental reliance on incorrect advice from a representative of the Agency constitutes “good cause” for filing a late protest.

FACTS: Claimant quit her job due to abusive conduct by the husband of the owner. Claimant filed for benefits. A determination held her disqualified for benefits under Section 29(1)(a). Claimant telephoned the claims examiner who issued the determination to ask what would be required to reverse the determination. Claimant testified the claims examiner told her (incorrectly) she would have to “prove with medical records or police reports that she had been ‘physically injured.’” Claimant did not file a timely protest of the determination because she did not have such evidence. A few weeks later, claimant met the person who had replaced her. That person also quit due to abusive conduct from employer’s husband and was seeking benefits. She told claimant other employees had quit for the same reason and had received benefits. Claimant then filed an untimely protest.

DECISION: The claimant established good cause for her late protest.

RATIONALE: “What justifies considering the late filing of a new, additional or reopened claim seems intuitively to justify considering the late protest of the initial determination of a claim.” That definition of “good cause” is “a justifiable reason, determined in accordance with the standard of conduct expected of an individual acting as a reasonable person in light of all the circumstances, that prevented a timely filing or reporting to file….” The statement of a “representative of the Unemployment Agency that a protest could succeed only with evidence that one does not have compels the conclusion that there is no point to a protest; reasonable people do not do the futile. [I]t is not reasonable to expect lay-people to ignore whom the government holds out to be an expert.” Claimant “had good cause for not protesting until she learned that she had been misled.”

Digest Author: Board of Review (original digest here)
Digest Updated:

16. Procedures/Appeals

Pool v R S Leasing, Inc – 16.69

Pool v R S Leasing, Inc
Digest no. 16.69

Section 32a

Cite as: Pool v R S Leasing, Inc, unpublished opinion of the Wayne Circuit Court, issued May 3, 2002, (Docket No. 01-138871-AE).

Appeal pending: No
Claimant: Brinda J. Pool
Employer: R. S. Leasing, Inc.
Docket no.: B2001-08251-159781W
Date of decision: May 3, 2002

View/download the full decision

CIRCUIT COURT HOLDING: Where claimant’s late protest was attributable to her parents’ medical problems, good cause for reconsideration was established.

FACTS: On January 2, 2001 claimant received a determination holding her disqualified. The Agency received claimant’s protest on March 12, 2001. The Agency requested an explanation for the untimely protest. Claimant disclosed that she had been out of town because her parents were ill. The Agency denied her request for redetermination. Claimant testified that after she received the determination, she left town to care for her parents, both seriously ill. She thought she would return before the 30-day appeal period expired, but did not return until February 28, 2001. She mailed her protest after the 30-day appeal period expired. She did not mail the protest before leaving town because her main concern was her parents’ health. The Board found she failed to show good cause for her late protest.

DECISION: The claimant demonstrated good cause for her late appeal of the Agency’s determination.

RATIONALE: The plain language of Rule 270(1) provides that the “Rule’s [specific] list of grounds for finding good cause is not exclusive,” and Rule 210(2)(e)(v) provides that “[g]ood cause for late filing of a new, additional, or reopened claim” includes “[p]ersonal physical incapacity or the physical incapacity or death of a relative . . ..” Reading the two Rules together leads to the conclusion good cause was established.

Digest Author: Board of Review (original digest here)
Digest Updated:

02. Employer Liability, Tax Rate, Successorship

MESC v Monkman Construction – 2.20

MESC v Monkman Construction
Digest no. 2.20

Sections 18(d)(2), 32a

Cite as: MESC v Monkman Constr, unpublished per curiam Court of Appeals, issued May 7, 1996 (Docket No. 176053).

Appeal pending: No
Claimant: N/A
Employer: Monkman Construction
Docket no.: L92-02019-2287
Date of decision: May 7, 1996

View/download the full decision

COURT OF APPEALS HOLDING: Where employer failed to request redetermination of its tax rate for more than one year after issuance of rate determination, reconsideration was time barred and Referee properly dismissed case for lack of jurisdiction.

FACTS: Employer’s contribution rate was set at 10 percent and a determination to that effect was issued on February 14, 1990. Employer failed to submit a quarterly report for 1989. The 30 day protest period ended March 16, 1990. Employer submitted the missing report on March 27, 1990, but did not request redetermination of its rate until November 19, 1991, more than a year after the determination was issued.

DECISION: Redetermination of tax rate denied due to lack of jurisdiction.

RATIONALE: Section 32a(2) bars appeals filed more than one year after prior decision or determination. Statutory time restrictions on seeking review of unemployment tax assessments are jurisdictional. As a result, the “good cause” analysis was inapposite.

Digest Author: Board of Review (original digest here)
Digest Updated: 7/99

02. Employer Liability, Tax Rate, Successorship

Kirby Grill Management, Inc v MESC – 2.21

Kirby Grill Management, Inc v MESC
Digest no. 2.21

Section 32a

Cite as: Kirby Grill Mgt, Inc v MESC, unpublished per curiam Court of Appeals, issued July 28, 1995 (Docket No. 166288).

Appeal pending: No
Claimant: N/A
Employer: Kirby Grill Management, Inc.
Docket no.: L91-00461-2192
Date of decision: July 28, 1995

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COURT OF APPEALS HOLDING: Good cause for late protest of a determination of successorship may be found where the employer submitted a revised registration report containing additional or corrected information regarding the percentage of assets acquired.

FACTS: In May, 1990 employer submitted a Liability Registration Report in which it indicated it had acquired 100% of predecessor Kings Manor. Employer was mailed a Notice of Successorship on June 22, 1990, which indicated that employer had purchased more than 75% of the assets of its predecessor. This was not protested until September, 1990. Request for redetermination denied on October 5, 1990, because employer failed to protest within thirty days or establish good cause for late protest. Employer submitted revised registration report showing it only acquired 15% of Kings Manor instead of the 100% in the original registration. Employer’s position is that submission of revised registration report meets good cause standard set forth in Unemployment Agency Administrative Rule 270(1)(b).

DECISION: Reversed and remanded for determination of whether good cause exists for reconsideration under Rule 270(1)(b).

RATIONALE: Under the statute, the Agency is authorized to redetermine a prior successorship determination for any “good cause” shown. The focus of a good cause inquiry is not limited to whether the employer could show good cause for not filing its protest within thirty days. Limiting the Agency’s discretion to deciding if there is good cause for untimely filing is overly technical and bureaucratic especially as Rule 270 expressly indicates good cause can be established on the basis of “additional or corrected information.” “That is, the additional or corrected information can provide the necessary good cause to reconsider the successorship determination and, hence, the all-important rate determination.”

Digest Author: Board of Review (original digest here)
Digest Updated: 7/99

02. Employer Liability, Tax Rate, Successorship

Contemporary Life Services v MESC – 2.12

Contemporary Life Services v MESC
Digest no. 2.12

Sections 13a, 32a, 41

Cite asContemporary Life Services v MESC, unpublished per curiam Court of Appeals of Michigan, issued May 24, 1994 (Docket No. 151027).

Appeal pending: No
Claimant: N/A
Employer: Contemporary Life Services
Docket no.: L89-07129-2075
Date of decision: May 24, 1994.

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COURT OF APPEALS HOLDING: Where employer requested reclassification from contributing to reimbursing status more than one year after notice of determination of status was mailed, the one year limitation bars retroactive reconsideration of employer’s status.

FACTS: Employer was classified as a contributing employer for failure to answer question 7 on form MESC 1010 even though elsewhere on that form the employer attested it was a tax exempt entity under 26 USC 501(a). The instructions for question 7 specifically stated failure to answer would result in classification as a contributing employer. Determination of contributing employer status was mailed on January 31, 1986. Thereafter, employer failed to file quarterly reports and received notice of this lapse on March 8, 1989. Employer requested reclassification on March 16, 1989. Employer had accumulated arrearages of unpaid unemployment payroll taxes between 1985 and 1989. Employer argued one year time limit should be tolled until March 8, 1989, or that the time limit should be extended on equitable grounds.

DECISION: Employer’s request for redetermination time barred under Section 32a.

RATIONALE: The March 16, 1989 letter was not filed within a year of the January 31, 1986 determination. Also, the employer was not entitled to equitable relief since it set the chain of events in motion by failing to properly complete form MESC 1010. Employer should have known when it received quarterly report forms that something was amiss. Employer is presumed to know the law as it relates to the operation of its business.

Digest Author: Board of Review (original digest here)
Digest Updated: 7/99

02. Employer Liability, Tax Rate, Successorship

MESC v NL Industries (USA), Inc – 2.09

MESC v NL Industries (USA), Inc
Digest no. 2.09

Sections 21, 32a

Cite asMESC v NL Industries (USA), Inc, unpublished opinion of the Oakland County Circuit Court, issued January 5, 1994 (Docket No. 93-459745-AE).

Appeal pending: No
Claimant: N/A
Employer: NL Industries (USA), Inc.
Docket no.: L90-10851-2103
Date of decision: January 5, 1994

View/download the full decision

CIRCUIT COURT HOLDING: Where the MESC fails to issue rate determinations and, instead assigns temporary rates by means of quarterly contribution reports, for a period of years, those so-called temporary rates become final if the employer is not notified of a contribution rate within six months of the computation date (June 30).

FACTS: In 1985, MESC issued determination of successorship. No rate determination was issued, but employer’s quarterly contribution reports showed rate of 2.7%. Sometimes a “T” appeared before the rate. Employer paid the 2.7% rate until October 27, 1989, at which time the MESC issued rate determinations covering 1985-89 of 9.1%, 8.7%, 7.8%, 7.3% and 6.6%. MESC’s position was that the quarterly reports were not rate determinations and not subject to the finality provisions of Section 32a(2). Further, the statute and Administrative Rules do not provide for temporary rates and therefore, the rates shown on the quarterly contribution statements could not become final rates under Section 21(a).

DECISION: Decision of MES Board of Review affirmed. (Later MESC appeal to Court of Appeals withdrawn.)

RATIONALE: Under Section 21(a), employers are entitled to notification of contribution rate no later than six months after the computation date. This notification is mandatory, not discretionary. The computation date under Section 18(a) is June 30 of each year. Therefore, employers must be notified of rate by December 31 of each year. Otherwise the finality provisions of Section 32a(2) apply. A statement of a rate such as that on the quarterly contribution report is a “statement” of a rate determination pursuant to Section 21(a).

Digest Author: Board of Review (original digest here)
Digest Updated: 7/99

02. Employer Liability, Tax Rate, Successorship

R F Molitoris, DDS v MESC – 2.13

R F Molitoris, DDS v MESC
Digest no. 2.13

Sections 11(g), 18(d)32a

Cite asR F Molitoris, DDS v MESC, unpublished opinion of the Macomb County Circuit Court, issued January 21, 1993 (Docket No. 92-3446-AE).

Appeal pending: No
Claimant: Wanda Forbes
Employer: R.F. Molitoris, D.D.S.
Docket no.: L90-06544-2224
Date of decision: January 21, 1993

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CIRCUIT COURT HOLDING: An interstate claimant’s entitlement to benefits is determined by the state in which the claim is made. The Agency is not precluded from redetermining an erroneous contribution rate if such redetermination is made within one year of the issuance of the initial rate.

FACTS: Claimant Wanda Forbes worked for involved employer and another Michigan employer in 1981 before moving to Nevada where she worked, then filed a combined wage claim for benefits, in September 1982. The Michigan employers provided information but this employer was not notified of charges to its account until 1985. Employer challenged charges and an adjustment of $898 was made for 1986. Employer requested redetermination of rate in 1989 which was denied as untimely. Agency subsequently discovered employer had received $898 credit for years 1987 through 1990 in error. Nevertheless, the Agency only recalculated the 1990 rate because redetermination of others was time barred under Section 32a.

DECISION: Redetermination of 1990 rate affirmed.

RATIONALE: Employer lacked standing to challenge award of benefits because under MESA Section 11(g), which conforms with 26 USC 3304, her entitlement to benefits was controlled by laws of Nevada (paying state). Agency had the authority to redetermine employer’s 1990 contribution rate within one year of its issuance. Erroneous rates for 1987 through 1989 could not be redetermined because of the one year time limit.

Digest Author: Board of Review (original digest here)
Digest Updated: 7/99