Michigan Workers’ Compensation Laws

In Michigan, an average of 200,000 workplace accidents and occupational diseases from private industries, like manufacturing and healthcare, as well as public sectors, such as the local government, are reported annually by the U.S. Bureau of Labor Statistics. In 2021, Michigan had an incident rate of 3.0 total recordable cases for every 100 full-time employees—with 75% from the educational and transportation industries and 56% from private trade—which was higher than the national rate of 2.7.

In light of this, the Michigan Workers’ Disability Compensation Act was enacted. This law provides benefits for employees who suffer physical injuries or disabilities while on the job and those with pre-existing conditions aggravated by work duties. The benefits range from medical treatments and loss-of-wage payments to vocational rehabilitation and long-term care. At the same time, workers’ comp aims not only to secure compensation for injured employees but to protect employers from liability as well. 

To understand more about this complex legal matter, this article guides both employees and employers through the Michigan Workers’ Compensation Law. It discusses topics including their rights and responsibilities, insurance requirements and exclusions, penalties, and how to obtain workers’ compensation benefits in the Wolverine State.         

Michigan Workers’ Compensation Insurance Requirements

The Michigan Workers’ Compensation Act requires all private and public employers with one or more employees to carry workers’ comp insurance. This coverage includes part-time or full-time workers who worked 35 hours weekly for at least 13 weeks or more. Agricultural employers must obtain workers’ compensation insurance if they have three or more employees working for 35 hours within 13 or more weeks. Homeowners hiring household helpers (unless family members) with a duty of at least 35 hours within 13 weeks are also mandated to provide a plan. 

On the other hand, sole proprietors or self-employed individuals are not considered employees and, thus, are not eligible for workers' compensation benefits. They can only purchase the plan if they hire three part-time workers or one full-time employee. Meanwhile, employers with subcontractors and independent contractors are not legally mandated to provide workers’ compensation coverage. 

Eligible employers in Michigan can purchase workers’ comp insurance through private insurance agencies, by participating in a group self-insurance program, or by applying as self-insured with the Workers’ Disability Compensation Agency. They can also obtain a policy through the assigned risk pool in the Compensation Advisory Organization or submit an exclusion form with the Insurance Compliance Division.

Employers’ liability insurance is already included in the standard workers’ compensation insurance plan. However, policyholders under the Federal Employers' Liability Act or admiralty law must attach specific endorsements to their standard policy to obtain employers’ liability insurance. 

Who Is Exempt From Michigan Workers’ Compensation Coverage?

 In Michigan, almost all businesses are mandated to have workers’ compensation coverage, but there are a few exemptions. These include sole proprietorships with no workers or those with family members as employees, partners, managers of limited liability companies who own 10% of interest, and corporate officers who own 10% of stock. 

In addition, the following employees protected by federal law are excluded from the workers’ compensation coverage:

• People who load and unload vessels;

• People who work on interstate railroads;

• People who work in a Veterans’ Administration hospital;

• Postal workers;

• Members of the armed forces. 

Michigan Workplace Required Posting

According to the Michigan Workers’ Compensation Law, employers are required to display posters containing workers’ compensation information in a visible place. The Employees - Know Your Rights poster details the employees’ rights to workers’ comp benefits, including medical care, vocational rehabilitation, and weekly wage loss payments. It also provides the insurance carrier's name and contact number and the termination date of the policy. Meanwhile, the Rights and Responsibilities poster contains the responsibilities of employees and employers throughout the process of filing a workers’ compensation claim.

Penalties for Not Adhering to Workers’ Comp Rules

In Michigan, failing to comply with the workers’ compensation insurance requirements is a misdemeanor charge. Violators may face a fine not exceeding $1,000 or no less than 30 days and no more than six months of imprisonment, or both. Each day the employees are still uninsured is a separate offense.     

Employers who do not comply with the workers’ comp rules are liable for economic and non-economic damages and other expenses of employees who sustained injuries from workplace-related accidents. Meanwhile, directors and officers of the uninsured corporations are individually and jointly responsible for the costs incurred by their injured employees.

The Workers’ Disability Compensation Agency has the right to prohibit the company from operating and hiring individuals by filing a petition with the court unless the company provides the right workers’ compensation insurance policies. 

Michigan Workers’ Compensation Benefits

Michigan operates under the no-fault system, which means workers’ comp benefits are automatically provided regardless of who caused the accident. Workers’ compensation covers injuries resulting from work-related duties and occupational diseases, regardless of whether or not the employees were in Michigan when the incident occurred. On the other hand, minor employees are entitled to double workers’ comp benefits.

The coverage includes:

• Medical-related benefits

During the first 28 days of medical care, employers have the right to choose their preferred physician. After the stated period, injured employees can choose their own provider by emailing their disputes or writing a letter to their employer and insurance carrier. The covered medical treatments include hospital stays, dental services, prescription drugs, and surgical operations, as well as medical aids like hearing apparatus, wheelchairs, and crutches.   

• Wage loss benefits

Workers’ comp coverage provides 85% of the employee’s average weekly wages, including overtime payments, salary increases, and other merits. Meanwhile, disability wage benefits provide two-thirds of the employee’s income for 50 weeks. There is a seven-day waiting period to obtain wage loss payments. On the other hand, all earnings of employees who worked for multiple employers are covered and calculated for wage loss payments. 

• Vocational rehabilitation benefits

This type of benefit covers professional solutions, including on-the-job training, counseling, short-term retraining, vocational assessment, and job placement assistance. Employees with disputes regarding vocational rehabilitation arrangements can file for a hearing before the Workers’ Compensation Agency.  

• Death benefits

Surviving spouses or children of deceased employees can claim death benefits of no more than 90% of the average weekly income in Michigan. These benefits cover funeral expenses and burial costs. If there are no surviving dependents, the compensation pays a fixed $6,000 for burial bills.   

• Specific loss benefits

These benefits provide 80% of the average weekly earnings of employees with specific loss of a body part. For instance, individuals who lose a third finger are entitled to benefits for 22 weeks, while those who lose a thumb will receive benefits for 65 weeks.  

Exclusions and Limitations to Michigan Workers’ Compensation Benefits

In Michigan, laws governing workers' comp aid those who have suffered losses as a result of accidents at work. Employees with pre-existing conditions that were not made worse by their employment are not covered by the law and are not eligible for workers' compensation benefits. The same is true for employees who were injured through intentional or willful conduct and were hurt outside the workplace premises. Additionally, employees are not allowed to receive weekly wage benefits if their earnings are the same or more than they did before getting injured, unless they sustain a permanent disability or specific loss. 

The employer is not legally required to pay for the injured employee’s health insurance policies while the latter is receiving workers’ comp benefits. On the other hand, the Workers’ Compensation Act does not cover pain and suffering or punitive damages, as these are obtained through filing a personal injury law claim.  

Michigan Workers’ Disability Comp Provisions

The Michigan Disability Compensation Act is the sole remedy for employees who suffered physical injuries, disabilities, or illnesses while performing their work duties; thus, they have no right to sue their employers for not providing benefits outside the scope of the legislation. 

However, damages resulting from the employer’s willful conduct, including failing to prevent the harm they are aware of and those accidents due to toxic substance exposure, are not compensable under the Workers’ Disability Compensation Act. Victims of workplace-related incidents due to the employer’s intentional act have the right to file a civil lawsuit and can recover punitive, economic, and non-economic damages, including pain and suffering. 

Accidents involving employees who are going to or coming from work within the business establishment are considered within the scope of work duties and are entitled to benefits. Meanwhile, those who get injured due to recreational or social activity outside of work duties cannot receive benefits.  

How to File a Workers’ Comp Claim in Michigan

Employees must immediately report their injuries or occupational diseases to their employers before filing a workers’ compensation claim in Michigan. They must also seek medical treatment right after they sustain an injury from a workplace-related accident. According to Michigan Rights and Responsibilities, employees must maintain open communication with their employers throughout the claim process and recovery period. Their employers must discuss accommodation options and choose a light-duty work course when the employees return to work. 

When Is the Deadline for Filing Workers’ Compensation Claims in Michigan?

Employees have two years from the date of the accident to file workers' comp claims in Michigan. For claims resulting from injuries or disabilities lasting less than seven days, Sedgwick or the Michigan Workers’ Compensation Third-Party Administrator will notify the claimant within 14 days of receiving the notice. Meanwhile, claims due to over seven days of disability are processed 30 days after the submission. 

A Step-By-Step Guide on Filing a Workers’ Comp Claim in Michigan

1. Report the injury or illness to your employer.

Michigan employees have 90 days to report their illness or injury to their employer or designated personnel in the department to assist them in filing for workers’ compensation claims and submitting needed paperwork.

2. Seek medical care from an occupational healthcare clinic.

Michigan employees must secure medical treatment from an occupational healthcare clinic and inform them that the injury is work-related. Employers and insurance carriers have the right to choose the healthcare provider for the first 28 days; after the said period, employees can change their physician.    

3. Submit the workers’ compensation claim form.

Employers must submit the claim form to the Civil Service Commission Disability Management Office via email at MCSC-DMO@michigan.gov or by fax at 517-241-9926. If employers fail to do so, employees can submit Form WC-117 to the Department of Labor and the Economic Opportunity of the Workers’ Disability Compensation Agency.   

4. Track the workers’ compensation claim.

Michigan employees can track their claims by logging into their File Transfer Service account and viewing the Scheduling Order. They can also contact their workers’ compensation lawyer to help them understand the timeline for receiving their entitled benefits.     

5. Obtain workers’ compensation benefits.

Once approved, employees can secure the benefits they are entitled to, like medical care, loss wage payments, and rehabilitation services. Meanwhile, they can only obtain long-term care benefits if Sedgwick denies or disputes their claim.     

6. Return to work.

Employees must submit medical paperwork to the Michigan Disability Management Office and Sedgwick to return to their workplace. The physician of those who need restrictions to return to work is responsible for informing DMO and Sedgwick about the conditions. These entities will then collaborate with the employee’s HR department to accommodate their situation. Sedgwick can be reached at 800-324-9901 or by fax at 866-229-4474.

What Should One Do if a Workers’ Compensation Claim in Michigan Has Been Denied?

In Michigan, injured employees who have been denied a workers’ compensation claim can apply for a hearing by calling 888-396-5041 or submitting Form WC 104-A  with the Workers’ Compensation Agency. They are not required to seek legal assistance from workers’ compensation lawyers; however, hiring one can help them understand the complexities of the legal system, create strategies against insurance agencies, and expedite the hearing request process. 

Workers will be scheduled for mediation proceedings if they have one of the following:

• Claims for medical benefits only;

• Claims with an employer who does not have an insurance policy;

• Claims exclusively for vocational rehabilitation care;

• Claims with no attorneys;

• Claims that, according to the agency, can be settled through mediation. 

If the dispute is not resolved through mediation, the claims will be transferred to the Michigan Workers Compensation Board of Magistrate's docket.    

Legal Resources for Injured Workers in Michigan

The Michigan workers’ compensation law can be complex and make employees feel overwhelmed with its processes and provisions. The organizations and entities below can help them navigate the workers’ comp procedure:

Michigan Immigrants Rights Center

The Michigan Immigrant Rights Center offers legal assistance to immigrant individuals and farmworkers facing employment law matters, from wage and hour disputes to sexual harassment and workers’ compensation. It focuses on building communities wherein immigrants feel equality and a sense of belonging, with staff members who fluently speak Spanish and French. For questions and concerns, the office may be contacted at 734-239-6863.

Michigan Indian Legal Services

Michigan Indian Legal Services advocates for the rights of Native Americans by providing free legal counsel on employment law claims resulting from workplace discrimination and denied workers’ compensation benefits. To seek assistance with Tribal employment rights, call 231-947-0122. 

Michigan Migrant Legal Assistance Project

The Michigan Migrant Legal Assistance Project gives advice regarding employment law cases, like workers’ compensation, civil rights lawsuits, and public benefits, to low-income individuals and families, migrants, and community advocates. The office is reachable at 616-454-5055 or by fax at 616-454-7022.   

Sugar Law Center

Sugar Law Center for Economic and Social Justice advocates for the rights of low-income individuals and families who experience unfair employment practices involving workers’ comp, discriminatory policies, and environmental harm. Contact them at 313-993-4505 or visit their office at 4605 Cass Avenue, Detroit, MI 48201.