Michigan Man Says State Wants Unemployment Money Back After Settlement

Thousands of Michigan residents remain caught in repayment disputes as claimants say they can’t reach the Unemployment Insurance Agency for answers.

LANSING, Mich. — A Mid-Michigan man says the state’s unemployment agency is once again demanding repayment, even after a major class-action lawsuit settlement was supposed to resolve years of disputes over wrongful overpayments.

Roy Hedges, who worked through the COVID-19 shutdowns, said he was among thousands of residents caught up in the chaos when Michigan’s Unemployment Insurance Agency (UIA) scrambled to process a flood of claims in 2020.

Hedges said he received part of a $55 million settlement earlier this year after the state was accused of clawing back benefits from people who received payments legitimately. That lawsuit followed revelations that Michigan’s automated fraud-detection system wrongly flagged tens of thousands of claims and demanded repayment, often with penalties, without giving claimants a fair chance to respond.

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“I thought this was finally over,” Hedges said. “Basically, they told me I had to sign back in to the unemployment system and see how much I owed again. I had just gotten my settlement back, and now they want me to pay $1,100. I don’t understand how I can be punished for getting it.”

A Cycle of Overpayments and Repayments

Hedges said he has spent years submitting documents, waiting for phone calls that never came, and watching others receive repayment demands of $20,000 or more. He believes the system still struggles to tell the difference between fraudulent claims and legitimate cases like his.

“This was chaos from the beginning,” Hedges said. “I gave them all my tax returns and ID, but I’m still caught in limbo while some people walked away with money and never paid a dime.”

Adding to the frustration, Hedges said he can’t get a straight answer from the UIA. Reaching someone on the phone can take hours, if it happens at all. “You’re told to wait in a call queue, they promise to call you back, and then no one ever does,” he said. “You can submit forms online, but then it’s just weeks or months of waiting. Meanwhile, they threaten to garnish wages or take it out of your taxes. It feels like a no-win situation.”

The UIA faced harsh criticism for its handling of claims during the pandemic. The federal government had expanded unemployment eligibility to include self-employed workers and contractors, but Michigan’s system was not designed to handle the new rules. Claimants often submitted extensive paperwork only to be told years later that they had been overpaid — sometimes because the state used the wrong formulas to calculate benefits.

The class-action lawsuit alleged that the state violated due process and harmed residents by demanding repayment of benefits people never should have been denied. As part of the 2024 settlement, thousands of claimants were awarded refunds, though many said the process left them financially and emotionally drained.

State Responds

State officials acknowledge the system is still working through cases. Nick Assendelft, spokesman for the Department of Labor and Economic Opportunity, said the agency is following established procedures. He noted that repayment notices are required in some situations but emphasized that “no one is being asked to repay benefits without due process.”

Calls for Change

For Hedges, the fight isn’t over. He said he plans to keep appealing and hopes lawmakers will step in.

“You just can’t do this to people — give them a settlement and then say you want it back,” Hedges said. “I’ve done everything I was supposed to do as a taxpayer. I submitted all the documents they asked for. And still, I’m the one paying for their mistakes.”

Lawmakers have previously called for reforms at the UIA, pointing to years of dysfunction, long wait times, and unanswered calls. While officials argue that improvements have been made since the pandemic, cases like Hedges’ show the system still struggles to regain public trust.