Employment security: benefits; certain improperly paid benefits; require waiver of recovery as an administrative or clerical error. Amends sec. 62 of 1936 (Ex Sess) PA 1 (MCL 421.62).

Michigan House Bill 5394, introduced on December 17, 2025, aims to amend Section 62 of the Michigan Employment Security Act. The bill proposes that if unemployment benefits are improperly paid due to administrative or clerical errors by the state, the state must waive the recovery of those overpaid benefits. This means that individuals who received excess unemployment benefits through no fault of their own would not be required to repay those amounts.

Supporters of HB5394 argue that it provides necessary relief to individuals who were overpaid unemployment benefits due to state errors. They contend that requiring repayment in such cases places undue financial strain on recipients who acted in good faith. By waiving recovery of these overpayments, the bill seeks to promote fairness and alleviate unnecessary burdens on unemployed individuals.

Critics of HB5394 express concern that waiving the recovery of improperly paid benefits could lead to increased costs for the state's unemployment insurance system. They argue that this policy might reduce the incentive for the state to improve administrative accuracy and could potentially encourage lax oversight, ultimately impacting the financial stability of the unemployment fund.