A $55 million settlement has been set aside for Michigan residents whose pandemic-era unemployment benefits clawed back by the state, but the window for opting in to a payment closes tomorrow.

The unemployment rate in the US spiked to alarming levels during the COVID-19 pandemic, as numerous businesses were forced to either cut their workers or close up shop altogether. According to the Center on Budget and Policy Priorities, the unemployment rate during this time peaked at an average of 13% in the second quarter of 2020, a huge jump from 3.5% in February 2020.

Some of those affected by this surge in unemployment later claimed in a suit that their benefits were clawed back by the state in a manner that violated their rights. Now, a sizable settlement for these claimants has been reached, and there's still a chance you could get in on it.

There are only a few days left before the deadline for opting into this settlement, which should help some workers get a measure of restitution for their struggles. Read on to get all the answers you need, and for more settlement news, find out if you're eligible for a recent settlement against 23andMe.

Why was there a class-action lawsuit?

The settlement resulted from the class-action lawsuit Saunders, et al. vs. State of Michigan Unemployment Insurance. Initially brought back in January 2022, the suit accused the Michigan Unemployment Insurance Agency of unlawfully taking back unemployment benefits that were issued during the COVID-19 pandemic. A settlement was reached in April, with $55 million being set aside for claimants.

The lawsuit accused the unemployment agency of claiming that certain individuals had been overpaid in benefits during the pandemic, which then led to it enforcing repayment before appeals decisions could be properly assessed. This, the claimants argued, was a violation of their rights to due process, and led to their wages being garnished and their tax returns being seized.

Who is eligible for this class-action settlement?

Michigan residents whose benefits were taken back by the agency between March 1, 2020, and April 25, 2024, are eligible to apply. 

Those who are eligible for the settlement should have already been alerted by mail or email. You can also log into your Michigan Web Account Manager account for unemployment insurance and see if there is a message titled, "Saunders v. UIA Improper Collections Alert." You can also check your eligibility with the settlement's administrator by calling 866-499-4565 or emailing info@bwclassactions.com.

How do I opt into this settlement?

You can submit a claim on the settlement administrator's website, which requires a claim number and PIN. You can contact the settlement administrator if you're unsure about the credentials you'll need.

The deadline for submitting these claims was previously set for Nov. 4, but was later extended to this Friday, Dec. 20.

How much will this settlement pay out?

Payment estimates for this settlement are about $250 or more per claimant. It is unclear, however, when these payments will be delivered. There is a final hearing in the case scheduled for March 20, 2025, but the settlement can still be appealed if it's approved, potentially delaying things even more.

For more, find out if you're eligible for the Fortnite class-action settlement.