If your business has employees in the state of Michigan, you’ll need to make sure you adhere to Michigan’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in Michigan?

Most employers in Michigan will need to purchase Workers’ Compensation Insurance. The following are regulations for what types of companies must carry coverage:

• All private employers regularly employing one or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks
• All private employers regularly employing three or more employees at a time
• Agricultural employers if they employ three or more employees 35 hours or more per week for 13 or more consecutive weeks
• Households employing domestic servants if they employ anyone 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks
• All public employers

The Michigan Workers’ Disability Compensation Act (WDCA) defines all of the requirements for Workers’ Comp in Michigan, and the Michigan Workers’ Disability Compensation Agency (WCA) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in Michigan?

Almost all workers are covered under Workers’ Compensation in Michigan. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.

The following are categories of employees that are eligible for Workers’ Comp coverage:

• Full-time and part-time employees
• Apprenticeships and internships
• Undocumented workers
• Domestic workers employed 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks
• Agricultural workers who work for an employer that employs three or more employees 35 hours or more per week for 13 or more consecutive weeks
• Minors

The following are categories of employees that are generally excluded from Workers’ Comp coverage:

• Independent contractors
• Volunteers, except those in service of emergency services or civil defense
• Casual or occasional workers
• Self-employed individuals
• Licensed real estate agents or brokers whose earnings are mainly from commissions
• Agricultural employees who are directly related to their employers and reside in the employer’s home or premises
• Domestic workers who are directly related to their employers

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in Michigan, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits

• Medical expenses, including treatment, hospital and surgical services, medicine, and any other necessary attendance or treatment.
• Dental services, crutches, artificial limbs, eyes, teeth, eyeglasses, hearing apparatus, and any other necessary equipment for recovery.

Specific Loss Benefits

• If an employee suffers the loss or loss of use of a body part that is specified in the WDCA’s schedule, he or she may be entitled to specific compensation benefits. These benefits are paid regardless of whether the employee is disabled or is unable to work.
• Specific loss benefits are 80 percent of the injured employee’s average weekly wage pre-injury.
• The WCA establishes minimum and maximum benefit amounts, which change yearly. In 2020, the maximum specific loss benefit was $934 per week. The minimum benefit amount was $259.28 per week.
• The WDCA lists specific scheduled losses, which generally involve loss or loss of use of fingers, toes, hands, arms, feet, legs, or eyes. The number of payable weeks is dependent upon the injured body part.

Total Disability Benefits

• If an injured employee suffers a total disability, meaning their disability prevents them from performing any job that pays the maximum wages available for work suitable to his or her qualifications and training, he or she may be eligible for total disability benefits.
• Total disability benefits are 80 percent of the injured employee’s average weekly wage pre-injury.
• The WCA establishes minimum and maximum benefit amounts, which change yearly. In 2020, the maximum total disability benefit was $934 per week.
• For employees who suffer total and permanent disabilities, benefits are the same as total disability benefits; however, these workers are allowed to take advantage of changing minimum and maximum benefit amounts. The minimum benefit is only applicable to those with total and permanent disabilities. This amount for 2020 was $259.28 per week.
• Total disability benefits are available until the injured employee is no longer disabled or is able to work and receive wages, at which point benefits may be reduced or stopped. As long as the employee remains disabled, benefits can be made available for life.

Partial Disability Benefits

• If an injured employee has a partial disability, meaning he or she is able to work at some level but his or her wages are less than the maximum wages available for work suitable to his or her qualifications and training, the employee may be eligible for partial disability benefits.
• Partial disability benefits are 80 percent of the difference between the injured employee’s pre- and post-injury average weekly wages.
• The WCA establishes minimum and maximum benefit amounts, which change yearly. In 2020, the maximum partial disability benefit was $934 per week. The minimum benefit amount was $259.28 per week.
• Partial disability benefits are available until the injured employee is able to earn wages equal to or higher than his or her pre-injury average weekly wages.

Vocational Rehabilitation Benefits

• Injured covered employees are entitled to vocational rehabilitation if they are unable to perform the work for which they have previous training or experience.
• Vocational rehabilitation may include a variety of services, including job placement assistance, retraining support, or guidance in starting your own business.

Death Benefits

• Employers are required to pay up to $6,000 to cover funeral expenses.
• A worker’s surviving dependents may be eligible to receive up to 80 percent of the deceased employee’s average weekly wages, up to the maximum average weekly wage set by the WCA.
• Death benefits are payable for up to 500 weeks after the employee’s death, but this limit can be adjusted depending on dependent age and other factors.

What are the penalties for breaking Michigan Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the WDCA can result in significant fines and even the closure of your business. In order to avoid any costly penalties, it’s important to consult the WDCA or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

Failure to Purchase Coverage

• Failure to secure adequate Workers’ Compensation Insurance may result in a misdemeanor charge, punishable by a fine of up to $1,000 or imprisonment for up to six months, or both.
• The state may also issue an injunction preventing the non-complying employer from employing anyone, in addition to a civil fine of $1,000 for each day that the employer is in noncompliance.

Unpaid Benefits

• Failure to pay the required weekly compensation benefits to an injured employee within 30 days after a payment is due may result in an additional fee paid to the employee of $50 per day that the payment is late, up to $1,500.

Intentional Evasion of Coverage

• If an employer knowingly evades providing Workers’ Compensation coverage to an employee by discharging the employee prior to meeting the minimum amount of work time required by the WDCA for coverage, they may be charged with a misdemeanor, punishable by fine, imprisonment, or both.

How much does Workers’ Compensation Insurance cost in Michigan?

According to the National Academy of Social Insurance Workers’ Compensation Report (October 2019), the average employer cost for Workers’ Compensation in Michigan was $0.74 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in Michigan?

The claims process in Michigan begins with the employee. If an employee suffers a work-related injury or illness, he or she must report the condition to the employer within 90 days of the injury or accident. Any delay in reporting may result in delays in the claims process or a denial of the claim.

The employer must submit a claim to the WCA within two years of:

• The date of the injury,
• The date the disability manifests itself,
• The last day of employment with the employer, whichever is later.

In the case of an employee death, the employee’s dependents must file a claim within two years of the death.

Michigan Workers’ Compensation Insurance Resources

For more information on Michigan Workers’ Compensation laws and requirements, please visit the following resources:

• Michigan Workers’ Disability Compensation Agency (WCA)

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