December is always a time of reflection on the past year and anticipation for the new year and all it brings.

I’m proud of the work the staff of the UIA’s Tax and Employer Services accomplished in 2022. Did you know we answered nearly 96,000 calls from employers? This past summer, we started offering callers the option to take a customer service survey. Results show that we have a nearly 90 percent overall positive customer satisfaction rating!

In 2022, we activated nearly 39,000 new employer accounts, a testament to the continued strength of Michigan’s post-pandemic economy. More of those employers – if they have 100 employees or less – can now also spread their tax liability over four quarters instead of paying it all in the first quarter under changes that went into effect this past summer.

We completed 164 special investigations, 800 claims investigations and over 2,000 employer audits. These actions help keep the UI system fair for everyone who pays into the program. Integrity in the unemployment insurance system is important to maintaining a healthy Trust Fund, which stands at nearly $1.8 billion (and growing).

The partnership between businesses and the UIA is robust and we appreciate working cooperatively with everyone throughout the year. We look forward to strengthening that collaboration in the year to come.

If you want to learn more about what UIA offers the business community, stop by our vendor booth at the Detroit Policy Conference on Jan. 10 at MotorCity Casino Hotel in Detroit. You can talk to UIA staff about our many employer services that aid you in hiring, holding on to staff during tough times, reporting fraud, getting help from our Office of Employer Ombudsman, and so much more. Hope to see you there!

This month’s newsletter offers several tips and lots of advice to keep in mind as you go through the year and stay on track to meet your UI obligations. We also have the 2023 tax rates and a reminder that you have until Jan. 30 to protest your rates.

Happy Holidays and Happy New Year!

Please mark your calendars!

Your employer Form 1771, UIA Tax Rate Notice for 2023 calendar year is scheduled to be mailed Dec. 29. The deadline to protest your tax rate is Feb 1, 2023. Protests received after that date will be considered late. 

If you have missing tax report(s) and submit a protest, your tax rate will not change the overall rate. You must file all missing reports before submitting a protest to also avoid the 3 percent Non-Reporting Penalty (NRP) portion of the tax rate. Once you have filed missing reports:  

• The 3 percent NRP is removed if the missing report is filed within 30 days of the Tax Rate Notice.
• A 2 percent NRP is assessed if the missing report is filed after 30 days, but within one year of the rate notice.
• The 3 percent NRP will remain unchanged if the missing report is filed after one year of the rate notice.

On Nov. 9, UIA mailed Form 1761, Potential Tax Rate Increase Due to Missing Report(s). Employers had until Dec. 13 to file the missing report and avoid the additional 3 percent rate penalty.

If an employer is no longer in business, it must complete Form 1772, Notice of Change, for the employer's account to be closed. This form is available in MIWAM or at Michigan.gov/UIA.

Employers that do not respond to layoff notices sent by UIA are considered Negligent Employers.

If UIA discovers a pattern by an employer of not responding to requested information, the agency will issue to the employer a Form 6367, Determination of Pattern of Non-Responsiveness.

If the finding of a pattern is established in a determination, the employer’s account is not credited for benefits charged.

Employers deemed to be nonresponsive represent individual claim cases where employers were marked as not responding in a timely manner or adequately to UIA’s request for information. For employers that receive this determination and are not familiar or unaware, it will impact UI charges for non-responsiveness.

If the employer disagrees with the determination, just as in all determinations, there are protest rights. The back side of the determination form explains those rights.   

The Michigan employer Taxable Wage Base for 2023 is $9,500 for each employee that works for you.

Employers who employ less than 100 workers, can use our Apportionment plan to spread your first quarter tax liability over four quarters in the calendar year. The number of employees needed to participate in the plan previously was 25.

All Michigan liable employers must file quarterly reports through their MiWAM account. All employers with estimated reports are considered missing reports and will receive penalty fees. Need help filing? Call the Office of Employer Ombudsman at 855-484-2636.

For seasonal employers not operating because they are closed, the quarterly tax report is still required. You must file a report but enter zero wages for employees during off-season quarters.

New employers can avoid closure of the Employer Account Number by checking your payroll date. If you have admitted to reaching the liability threshold to become an employer, it's verified with the initial  report that is filed for accuracy. The employer account will be closed if the payroll date does not match the report. You cannot file a zero-wage report.

Before a business or individual is determined by the UIA to be liable, it is referred to as an employing unit. To become a liable employer, UIA follows a process outlined in Section 41 of the Michigan Employment Security Act (MES) to determine if the employing unit is an employer and should pay unemployment taxes.

UIA will then notify you of its determination.

• If your liability falls in the subject quarter or you plan to start operations in the future, then complete Form 6442, Action Needed for Employer Status to update your liability status.
• If you registered as a liable employer in error, then Form 1772, Notice of Change, is needed to close the account.
• If an individual is an officer of a corporation and is active in the daily operation of the business, then their wages are taxable. The employer is also required to file a report that includes that person.

UIA provides an Employer Liability Toolkit and video to explain what how to register your business.

The unemployment insurance Trust Fund received
a second voluntary payment from the State of Michigan this past June, this one for $100 million to offset expected exposure to state fraud and improper payments during the COVID-19 pandemic.

The trust fund balance currently stands at nearly $1.8 billion dollars.

Although this is significantly lower than the pre-pandemic high balance of $4.7 billion, the fund has remained solvent. Tax rates for 2023 are expected to remain flat or even decline slightly, due to unemployment benefit costs in 2022 remaining below pre-pandemic levels.

Michigan has more than 200,000 employers and that number increases quarterly. Thanks for all you do to keep Michigan’s economy strong and its citizens employed.