03. Benefit Computation Factors 18. Restitution, Waiver, Fraud

Elliott’s Amusements, LLC v. Garrison – 17.23

Elliott’s Amusements, LLC v. Garrison
Digest No. 17.23

Section 421.44

Cite as: Elliott’s Amusements, LLC v Garrison, unpublished opinion of the Ingham County Circuit Court, issued October 1, 2007 (Docket No. 07-251-AE).

Appeal pending: No
Claimant: Ronald L. Garrison
Employer: Elliott’s Amusements, LLC
Date of decision: October 1, 2007

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HOLDING: Certain per diem payments made by the employer to the claimant were remuneration when not for the “convenience of the employer” and the claimant had the ability to choose how to spend the money.

FACTS: The ALJ decided that per diem amounts the employer paid to the claimant were remuneration under Section 44(1). The Board of Review affirmed and incorporated the ALJ’s decision. As the Board explained, the claimant worked six months per year for the employer, while also living in the employer’s trailer and paying rent and food money. The claimant received a per diem payment from the employer, plus reimbursements for some expenses. Citing Seligman v MESC, 164 Mich App 507 (1988) as controlling, the Board endorsed the ALJ’s view that the per diem payments amounted to wages because the employer did not require the claimant to live at the work site, the lodging was not free, and the claimant’s use of the per diem payments were not controlled by the employer.  The claimant choice to use the employer-provided lodging was based on his own convenience, distinguishing his situation from the mandatory on-site lodging provided for the “convenience of the employer” in Seligman.

DECISION: The court upheld the determination that certain per diem payments made by the employer to the claimant were remuneration.

RATIONALE: Per diem payments for on-site lodging and food are considered remuneration if the employer did not control the claimant’s use of the per diem monies and the claimant could have spent the money in other ways.

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: 10/25/2017

04. Total or Partial Unemployment

Jackson v. General Motors Corp – 4.31

Jackson v. General Motors Corp
Digest no. 4.31

Sections 44, 48

Cite as: Jackson v General Motors Corp, unpublished opinion of the Wayne Circuit Court, No. 01-119168-AE (July 8, 2002), lv den No. 242842 (Mich App January 13, 2003).

Appeal pending: No
Claimant: Willie Jackson, Jr., et al.
Employer: General Motors Corporation
Docket no.: MUL1999-57622 et al 154957
Date of decision: July 8, 2002

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CIRCUIT COURT HOLDING: Where the source of a one-time payment is a strike resolution agreement, absent which there was no expectation of receiving monies for the relevant period, the payments are bonuses, not wages, and are excluded from “remuneration” under Section 48(2).

FACTS: In August 1998 employees received special payments for the lay-off period of June 28, 1998 through July 3, 1998. Employer paid the monies as part of a strike settlement and attempted to allocate the monies to that period of time. The payments were to compensate employees laid off due to interruption in the flow of parts caused by the labor dispute at the struck facilities.

DECISION: Claimants are eligible for unemployment benefits for the lay-off period.

RATIONALE: Section 44 defines “remuneration” under the MES Act. Section 48(2) has a narrower scope, and addresses how to treat “lost remuneration,” i.e. remuneration that falls outside the course of ordinary pay. Under Section 48(2), bonuses do not qualify as remuneration. The court found the one-time payments were bonuses, not wages, as the source of entitlement was the agreement resolving the strike, and absent the agreement, the claimants had no expectation of receiving monies for the relevant period.

Section 44 speaks to remuneration in general. The court conceded the payments might appear to be “back pay.” However, the court decided that the specific language of Section 44 precluded such a finding in this case.

[NOTES: Section 48(2) was amended effective April 26, 2002, and no longer includes bonuses in its exclusions to remuneration. Section 44(1) was amended effective April 26, 2002, and now includes “back pay” as remuneration.]

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

04. Total or Partial Unemployment

Fletcher v Atrex Corp – 4.29

Fletcher v Atrex Corp
Digest no. 4.29

Sections 48, 44

Cite as: Fletcher v Atrex Corp, unpublished opinion of the Macomb Circuit Court, issued October 22, 1997 (Docket No. 96-7137-AE).

Appeal pending: No
Claimants: Clare Fletcher
Employer: Color Custom Compounding, Inc., d/b/a Atrex Corporation
Docket no.: FSC 95-00061-136470W
Date of decision: October 22, 1997

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CIRCUIT COURT HOLDING: Where claimant spent her time performing services, though not paid for those services until after the fact, she was nonetheless employed and received remuneration.

FACTS: Claimant had a benefit year in effect in May 1992 when she began performing services for Universal Plastics. At that time, that employer was unable to offer her a paying job. Nonetheless, claimant continued to perform services until she was officially hired there August 1, 1992, at which time she informed the Agency that she was employed. After claimant was hired she was compensated retroactively for the services she performed between May and August 1992. When the Agency became aware of this a determination was issued holding claimant ineligible for the May – August period under Section 48.

DECISION: Claimant is ineligible for benefits for the period May 3, 1992, through July 11, 1992, under Section 48.

RATIONALE: Remuneration is compensation for personal services and is not limited by the statute as to when it is paid – it may be paid after the service is rendered and not in the form of an hourly or weekly rate. The substantial amounts claimant received in addition to her regular wages after she was hired were, in fact, remuneration for services rendered during the period in question.

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

17. Employee Status

Psychological Services v MESC – 17.14

Psychological Services v MESC
Digest no. 17.14

Sections 42, 44

Cite as: Psychological Services v MESC, unpublished opinion of the Kent County Circuit Court, issued May 4, 1990 (Docket No. 89-64789-AE).

Appeal pending: No
Claimant: N/A
Employer: Psychological Services
Docket no.: L87-07843-RO1-1978
Date of decision: May 4, 1990

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CIRCUIT COURT HOLDING: Where several licensed psychologists paid to use space and clerical services provided by the clinic owner, but conducted separate practices serving clients, they were not employees of the clinic but were independent contractors.

FACTS: Dr. Charles Laufer operates a clinic which provides psychological services. Several individuals who are licensed psychologists see clients at his facility, use the office suite, present their billing information to the office manager employed by Dr. Laufer and pay Dr. Laufer a 40% share of their receivables. Dr. Laufer provides testing supplies and clerical services in addition to office space. These are no written contracts. IRS 1099 forms are issued to the claimants. Dr. Laufer advertises the clinic in the yellow pages under his name. Some of the claimants are not fully licensed (i.e. have limited licenses) and must practice in a fully licensed establishment.

DECISION: Services provided are not in employment and remuneration received was not wages under Section 42 and 44.

RATIONALE: MESC relied on inadequate evidence in reaching its conclusion that services performed by 4 psychologists were in employment. The fact that each contributed 40% of their billings to pay for the overhead does not establish that there was an employer-employee relationship. Reliance on a form filled out only by Dr. Laufer while ignoring his sworn testimony regarding the form was error. Applying the economic reality test yields the conclusion that the psychologists did little more than share expenses at the clinic.

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

04. Total or Partial Unemployment

Barnett v Good Housekeeping Shop – 4.05

Barnett v Good Housekeeping Shop
Digest no. 4.05

Section 44

Cite as: Barnett v Good Housekeeping Shop, unpublished opinion of the Court of Appeals of Michigan, issued March 14, 1983 (Docket No. O/P B78 53596 60992); lv den 418 Mich 873 (1983).

Appeal pending: No
Claimant: Rebekah Barnett
Employer: Good Housekeeping Shop
Docket no.: O/P B78 53596 60992
Date of decision: March 14, 1983

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COURT OF APPEALS HOLDING: The distinction in Section 44(5)(a) and (c) of the MES Act as to the treatment of disability payments as wages depending on whether the disability benefits are paid directly to an employee or through a disability plan does not constitute a denial of equal protection.

FACTS: Claimant, a 12 year employee, was on a medical leave and received 26 weeks of medical disability benefits through a disability insurance plan provided by the employer. When her disability ended claimant’s employment was terminated. She applied for unemployment benefits but had insufficient credit weeks because the disability payments were not considered wages under Section 44(5) because they were paid through an insurance plan rather than directly to the employee.

DECISION: Claimant does not have sufficient credit weeks to establish a claim because disability payments she received do not constitute wages under Section 44 of the Act.

RATIONALE: “Equal protection in its guarantee of like treatment to all similarly situated citizens permits classification which is reasonable and not arbitrary and which is based upon material and substantial differences which have reasonable relation to the object or persons dealt with and to the public purpose or purposes sought to be achieved by the legislation involved. The equal protection clause does not forbid discrimination with respect to things that are different. Gauthier v Campbell, Wyant & Cannon Foundry Co360 Mich 510, 514 (1960). We find as did the trial court, that the legislative purpose in the distinction of Section 44 is to encourage the establishment of plans and systems which would financially aid workers when they are ill and disabled and for which unemployment benefits are not payable because the individual employees are not qualified under section 28 of the act, because they are not able and available for work due to the sickness or disability.”

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