Pandemic Unemployment Woes: Michigan Family Struggles Without $25,000 in Benefits
Paul Kreps, a Michigan man, has been waiting for five years to receive unemployment benefits owed to him after his payments were frozen during the COVID-19 pandemic. Kreps, who owns a pest control business in Monroe, was approved for unemployment benefits in April 2020 when the pandemic forced him to close his business. He was eligible to receive $362 per week from the state, in addition to aid from the Pandemic Unemployment Assistance (PUA) program.
However, despite being approved, Kreps did not receive any of the money by 2022, with his online account showing a “Stop Payment Indicator” on all 44 weekly payments. This left him and his family struggling to survive as they lost their savings and struggled to pay bills. Without income, the Kreps family was forced to rely on Kreps’ parents, who took out a second mortgage to help prevent the family from becoming homeless.
Kreps, along with four others, filed a class-action lawsuit against the Michigan Unemployment Insurance Agency (MUIA), claiming that thousands of workers during the pandemic had their payments frozen without any explanation or ability to appeal. This lawsuit highlighted how many eligible claimants went months without assistance or were never paid at all, causing them significant financial hardship.
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The lawsuit argues that the MUIA violated claimants’ due process rights by freezing benefits without providing a chance to be heard or appealing the decision. The plaintiffs, including Kreps, felt that they were unfairly treated and left without a financial lifeline when they needed it most. Despite these claims, Kreps and others in the lawsuit have yet to receive the benefits they are owed.
In June 2021, Kreps began working as a truck driver and has since struggled to rebuild his life. As of July 2023, the federal court ruled that the plaintiffs had plausibly alleged a procedural due process claim, indicating that the freeze on their benefits violated their rights. However, litigation for the lawsuit is still ongoing, and Kreps is still waiting to receive the $25,000 he is owed.
Meanwhile, the MUIA has agreed to a $55 million settlement in another related lawsuit involving workers who were incorrectly told they owed the state money. The agency has pledged to reform its claim processing system to prevent future issues for Michigan workers and employers. A final approval hearing for the settlement is scheduled for March 2025.
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