Small business owners can't collect UI benefits despite governor's forced shutdown

Posted at 9:43 PM, Mar 26, 2020
and last updated 2020-04-19 18:20:09-04

WALKER, Mich. — Small business owners say Governor Gretchen Whitmer's executive order to shutdown non-essential businesses have created some unintended consequences. The governor has issued a series of orders in the fight to stem the spread of COVID-19.

John Bergsma hosts Great Lakes Fisherman's Digest. The small business owner now finds himself in the same boat as thousands of other people: out of work as a result of the governor's executive order.

He says his business was forced to shutdown because it's non-essential. While his two staff members are filing for unemployment benefits, Bergsma says as a business owner he's not allowed to.

"The rules, the way unemployment is currently set up, is that if you pay yourself as a W-2 employee - which I do and thousands of other owners do - even though we pay those unemployment tax withholdings, we are not eligible as business owners to collect or be eligible for benefits," Bergsma explained.

"That is going to be a massive problem going forward," he said.

Bergsma says, under normal circumstances, the current policy is designed to prevent small business owners from committing fraud - such as laying themselves off and collecting benefits. However, in this instance, he says small business owners are not the ones choosing to close.

"This is where I'm being told by my governor to shut my business down. So for me personally, I believe there has to be some addressing from unemployment and the governor's office to the current statute or rule," he said.

Bergsma says he wants an exception made under these circumstances for small business owners to be able to collect benefits.

The Walker area resident says if that's not addressed, he's concerned small business owners will also miss out on federal dollars.

"For you to be eligible for that $600 per week federal stimulus you have to be currently in an unemployed situation receiving benefits through your state. Well, obviously if you're denied benefits from the State of Michigan that will immediately eliminate those business owners from receiving the federal stimulus as well," he said.

FOX 17 reached out to the governor's press secretary, Tiffany Brown, to ask if the governor had considered making an exception for small business owners. Brown forwarded the inquiry to the state Department of Labor and Economic Opportunity. There's been no further response.

FOX 17 spoke with labor attorney Megan Parpart with the law firm Howard and Howard out of Royal Oak. She says small business owners have some resources to turn to, including the Small Business Administration. The SBA has opened up disaster recovery loans:

Also, the State of Michigan's Michigan Strategic Fund has a grant and loan process that can be found here at