Michigan Expands Unemployment Insurance Benefits Despite NFIB Opposition
In December 2024, Michigan passed legislation increasing unemployment insurance benefits and expanding benefit weeks, despite vehement opposition from the National Federation of Independent Business (NFIB). The legislation, signed into law by Governor Whitmer as Public Act 173 of 2024, became effective on April 2, 2025. The new law significantly increases the maximum weekly benefit amount from $362 to $445 in 2025, with further increases to $530 in 2026 and $614 in 2027. Future benefit amounts will be adjusted annually based on the Consumer Price Index from the US Bureau of Labor Statistics.
The legislation also expands the duration of benefits from 20 to 26 weeks and increases the dependent allowance. While employers won’t see immediate tax increases in 2025 due to already set tax rates, they can expect potential tax rate hikes starting in 2026 to fund the expanded benefits. According to the Unemployment Insurance Agency, employers currently charged at the maximum tax rate of 10.3% in 2025 may face an estimated 1.9% increase in their 2026 tax rates for the chargeable benefit component (CBC).
The increased benefits could potentially reduce the Unemployment Insurance Trust Fund below $2.5 billion, triggering an increase in the taxable wage base from $9,000 to $9,500. Michigan’s unemployment tax system is highly “experience rated,” meaning employer tax rates are closely tied to actual benefit charges to their accounts and payroll size. For detailed information on how benefits affect employer tax rates, visit Michigan.gov/UIA.
NFIB remains committed to opposing these benefit increases and is advocating for the Unemployment Insurance Agency to ensure claimants actively seek and accept job offers rather than relying solely on benefits. As the changes take effect, small businesses and employers in Michigan will need to navigate the implications of these legislative changes on their operations and workforce management.
