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160638 - Dep't of Talent & Economic Development v Great Oaks CC

Department of Talent & Economic Development/Unemployment Insurance Agency,


Zachary Risk





(Appeal from Ct of Appeals)



(Oakland – Grant, N.)


Great Oaks Country Club, Inc.,


Kenneth Gross





This case involves interpretation of a provision of the Michigan Employment Security Act, MCL 421.1 et seq. (MESA), MCL 421.13m(2)(a)(i)(A).  The issues are: (1) for what length of time must a client employer have reported no employees or payroll to the Unemployment Insurance Agency (UIA) (eight or more vs. 12 or more calendar quarters) before its unemployment insurance tax rate will be the beneficial “new employer tax rate” and (2) how does the statutory date of “January 1, 2014” factor into this equation?  After an administrative law judge, the Michigan Compensation Appellate Commission, and the Macomb Circuit Court determined that the defendant was subject to the shorter 8 or more calendar quarters and entitled to the beneficial “new employer tax rate,” the UIA appealed the circuit court’s decision to the Court of Appeals.  In a published opinion, the Court of Appeals reversed the circuit court and interpreted MCL 421.13m(2)(a)(i)(A) to require client employers to have reported no employees or payroll for the longer period of 12 or more calendar quarters where, as here, a professional employer organization (PEO) changes its method of reporting beginning January 1, 2014.  The Supreme Court has ordered oral argument on the application to address whether the Court of Appeals correctly determined that the defendant could not satisfy MCL 421.13m(2)(a)(i)(A) by reporting no employees or no payroll for the eight quarters before January 1, 2014.​