# Unfair Unemployment Tax Exemptions - in Michigan



## Herm Witte (Jan 27, 2009)

Your thoughts on this one. I have mine which I'll share later. The Michigan House passed this the week of October 21. It's off to the Michigan Senate now - maybe a committee first. This information came in front of me by way of an e-mail from the Michigan Chamber of Commerce.

*Unemployment Tax Exemptions for Employers Pass the State House

Last week, the Michigan House passed a bill, House Bill 4958 (Rep. Foster), to exempt employers of H-2B (temporary worker) and J-1 (exchange visitor) visas from remitting unemployment insurance (UI) taxes on the wages of these visa holders because, by law, they cannot claim benefits due to the temporary nature of their visas*


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## BC Handyman (Dec 15, 2010)

so what they saying is temp workers dont pay into ui(called ei here) cause they cant get ui? makes sence, the queston of needing & hiring these guys in first place is the issue I think.


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## SnowClear (Feb 24, 2012)

Makes sense. But, it also provides incentive for businesses that rely upon seasonal labor to utilize the labor which cost less. It sounds concerning to me though. There are number of ways I might posit how this law might impact snow businesses. 

First is the reduction in hiring higher cost (experienced) labor. We're all aware of which business structures will be the first to exploit this opportunity.

Second is the eventual decline of available, experienced snow professionals (higher cost labor which will require UI) and abundance of inexperienced labor (lower cost labor not requiring UI).

Third is the stagnation of wages and possible decline of snow contract value when pitting one competitor with local labor against a competitor with a large percentage of visa-based labor. 

There is a whole lot to chew on with this law from a microeconomic perspective. 

Opportunity knocks though. This law permits an immediate increase to a company's bottom line. Also a complete reexamination of their present seasonal labor strategy.


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## Herm Witte (Jan 27, 2009)

"the question of needing & hiring these guys in first place is the issue I think."
*BC Handyman*, That's another subject I think. 

*Snowclear*, I understand the financial ramifications pro and con. My Question for you is as follows; *Should any branch of our government, local, state or federal, pass a law that as an end result its enactment would end up being a financial adavantage for one to hire foreign temporary worker versus hiring a legal resident of our city, state and country?* This is what the end result will be.


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## Mark Oomkes (Dec 10, 2000)

Herm Witte;1663852 said:


> *Snowclear*, I understand the financial ramifications pro and con. My Question for you is as follows; *Should any branch of our government, local, state or federal, pass a law that as an end result its enactment would end up being a financial adavantage for one to hire foreign temporary worker versus hiring a legal resident of our city, state and country?* This is what the end result will be.


This is absolutely the question. And problem.

H2B workers generally are paid less than a citizen. They also send a majority of their money home to support their families, thereby not enhancing the economy locally.

As for fair or making sense (I realize you guys probably aren't aware of this) but this is a bogus, BS excuse. I, as an officer of the corporation, am forced to pay into the unemployment fund but will never be able to collect, either.

One other thing, Michigan had about a 10 year or more recession. A single state recession. Then the nationwide recession hit. During this time, our legislators voted extensions in "benefits" to those collecting unemployment. After awhile, the well ran dry. Big surprise. The state borrowed from the feds to continue paying these extensions. When those loans came due, guess what those legislators did? Yup, raised rates on those businesses that had no choice in the matter of extensions.

The issue is the reduction in cost to the employer for the employee, giving them an even more artificially low cost for labor.

This is just further interference in the market by a bunch of idiot politicians. Somebody received a huge contribution to his campaign fund by a lobbyist to introduce this legislation.

Off my soapbox. For now.


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## SnowClear (Feb 24, 2012)

Herm Witte;1663852 said:


> "the question of needing & hiring these guys in first place is the issue I think."
> *BC Handyman*, That's another subject I think.
> 
> *Snowclear*, I understand the financial ramifications pro and con. My Question for you is as follows; *Should any branch of our government, local, state or federal, pass a law that as an end result its enactment would end up being a financial adavantage for one to hire foreign temporary worker versus hiring a legal resident of our city, state and country?* This is what the end result will be.


In short, no. I do think it is difficult to prognosticate the outcome with a high degree of certainty because of the following.

I perused the UI manual for MI and found some interesting information applicable to your question. From page 22A under H-2B row, second cell "Allows U.S. employers to temporarily employ foreign workers to meet temporary need when U.S. workers not available"

While the law does introduce a potential loophole where extensive debate will ensue pertaining to the definition of "when U.S. workers not available," and "temporary need;" I don't think the intent of the law was to create a loophole. But to reduce taxation of wages where the benefit of named tax is not available to said worker.

I've already acknowledged the potential issues at hand though. One being the threat to local economic stability as a result of shifting labor practices.


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## SnowClear (Feb 24, 2012)

Mark Oomkes;1663876 said:


> As for fair or making sense (I realize you guys probably aren't aware of this) but this is a bogus, BS excuse. I, as an officer of the corporation, am forced to pay into the unemployment fund but will never be able to collect, either.


Really? You're not able to apply for exemption from UI or opt to pay and receive benefits? I know what your next lobbying effort will be.

A bit different in my area. Minnesota allows officers of a company in excess of a certain percentage of ownership the option to pay taxes on wages or not and subsequently receive UI benefits, or not.


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## snowpro44 (Oct 31, 2013)

To be really honest!!! Hire americans with SS NUMBERS!!!..LET THEM PICK THE FRUIT AND MOVE ON!!..You wanna live in america than become a citizen..


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## Woodenshoe (Oct 30, 2010)

Mark Oomkes;1663876 said:


> As for fair or making sense (I realize you guys probably aren't aware of this) but this is a bogus, BS excuse. I, as an officer of the corporation, am forced to pay into the unemployment fund but will never be able to collect, either.


Sorry to say Mark, this is false. I tried to fight a claim with this exact same status and lost. UI is designed for the employee, very difficult to deny benefits...


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## Mark Oomkes (Dec 10, 2000)

Woodenshoe;1664430 said:


> Sorry to say Mark, this is false. I tried to fight a claim with this exact same status and lost. UI is designed for the employee, very difficult to deny benefits...


Officer's can collect?


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## Woodenshoe (Oct 30, 2010)

apparently... i tried to contest, but that is like trying to smash your head against a concrete wall hoping something good will come of it!


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## Mark Oomkes (Dec 10, 2000)

Interesting. 

Maybe I'll try laying myself off.


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## Woodenshoe (Oct 30, 2010)

Otherwise, elect new officers every once in a while and take turns collecting


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## RLM (Jan 12, 2006)

Mark Oomkes;1663876 said:


> This is absolutely the question. And problem.
> 
> H2B workers generally are paid less than a citizen. They also send a majority of their money home to support their families, thereby not enhancing the economy locally.
> 
> ...


Mark,
You sure your not from NY.....your in the same boat I am ;(


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## GARRETTWOOD (Feb 3, 2005)

Mark Oomkes;1663876 said:


> This is absolutely the question. And problem.
> 
> H2B workers generally are paid less than a citizen. They also send a majority of their money home to support their families, thereby not enhancing the economy locally.
> 
> ...


Well said, same has happened in PA. We are in the same boat, have small company and hire only local and some high-school and college help to when we are in the heart of the season. Also myself and my father are corporate officers and pay in on ourselves and can't collect. Pay in on all our help and only have our core men collect during the slow periods during the winter.


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