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For a business owner, unemployment taxes are not thought of as an important item to be concerned about but in recent years, the UIA (Unemployment Insurance Agency of Michigan) has instituted a new web-based computer system and as a consequence, has increased its monitoring of business taxpayers to a much higher degree.

Along with increased monitoring, stricter rules and penalties have made UIA compliance an important item to manage for better profitability.

Here are some of the ways the UIA can sting you:

  1. You have a fire, roadwork or other reason to close temporarily. Your long-time employees collect unemployment benefits for several months while you re-build.  All those benefits get charged to your account and could cause your unemployment rate to sky-rocket after you re-open.
  2. You buy a foreclosed location that has been closed for less than 2 years. All the former employees that collected benefits will affect your rate as a new employer.
  3. You buy a location that was poorly managed. You inherit the bad unemployment rate of the prior owner.
  4. You hire people for a day or for a probationary period before putting them on the payroll. If UIA catches it, penalties can go into the thousands.
  5. You pay employees as contractors instead of as employees. If UIA catches it, the penalties can go into the thousands.
  6. You miss obtaining a social security number for someone or you have an incorrect number. The person leaves and you do not have a way to contact them.  If UIA catches it, the penalties can go into the thousands.

There are ways to mitigate all the above problems.  If you have any concerns or would like to know more, call our Unemployment Specialist, Lakia at 313-962-6000.

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