Great Lakes Wire

As of April 2, 2025, legislation that increases unemployment insurance benefits and extends benefit weeks has come into effect in Michigan. This legislation, known as Public Act 173 of 2024, was signed by Governor Whitmer despite opposition from the National Federation of Independent Business (NFIB).

The new law raises the maximum weekly benefit from $362 to $445 for 2025. In subsequent years, the benefit will rise to $530 in 2026 and $614 in 2027. Future increases will be tied to the Consumer Price Index from the US Bureau of Labor Statistics. The legislation also extends benefits from 20 to 26 weeks and raises the dependent allowance.

Employers will not experience any tax rate increases in 2025 since rates have already been set. However, they are likely to see an increase starting in 2026 as a means to fund these expanded benefits.

The Unemployment Insurance Agency indicates that employers charged at the maximum tax rate of 10.3% could face an estimated increase of 1.9% in their chargeable benefit component for taxes due in 2026.

There is also concern that increased benefits may cause the Unemployment Insurance Trust Fund to dip below $2.5 billion, which would trigger a rise in the taxable wage base from $9,000 to $9,500.

Michigan's unemployment tax system is noted for being highly "experience rated," meaning an employer's tax is closely linked to actual benefit charges and payroll size. More information on how paid benefits can impact this rating can be found at Michigan.gov/UIA.

The NFIB remains opposed to these increases and continues advocating for accountability measures that require claimants to actively seek employment rather than relying on benefits.