Michigan court reverses order permitting merger of eight LLCs into single employing unit for UI purposes
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Wednesday, August 26, 2020

Michigan court reverses order permitting merger of eight LLCs into single employing unit for UI purposes

By Payroll and Entitlements Editorial Staff

The agency determined that eight limited liability companies, each of which operated a separate Subway restaurant and were owned by one man, would be merged into a single employer unit under the company's account for UI purposes. In reversing the agency’s merger determination, the ALJ determined that state statutes did not authorize the agency to convert previously determined “employers” to “employing units.” The ALJ rejected the agency’s reliance on a provision which refers only to the agency’s right to make determinations with respect to whether an employing unit constitutes an employer, and thus, does not apply to the agency’s attempt to convert multiple employers into a single employing unit. In addition, the ALJ correctly observed that other sections of the statutory scheme—sections not relied on by the agency in support of its determination—specifically provide for merging accounts of multiple employers. Accordingly, the court reversed the circuit court’s order allowing for the merger and reinstated the decisions of the ALJ and the appellate commission which had reversed the merger determination (DLEO/UIA v. JCE Acquisitions, LLC, Mich. Ct. of App. (Unpub. Op.), No. 347897, July 30, 2020).

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