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Michigan's workers' compensation system serves as a crucial safety net for employees across the state, providing financial assistance and medical benefits in the event of work-related injuries or illnesses.
Governed by the Michigan Workers' Disability Compensation Act, this system ensures that workers are fairly compensated for lost wages and medical expenses.
Here’s everything you need to know about Michigan workers’ compensation.
In Michigan, workers' compensation is a state-mandated insurance program for almost all employers. It’s designed to provide employees who suffer work-related injuries or illnesses with medical treatment and indemnity benefits.
Without workers’ compensation, the cost of a work-related injured or ill employee’s medical treatment could become the responsibility of your business.
The Michigan Workers’ Disability Compensation Act (WDCA) requires that the following types of employers must be insured with a workers’ compensation policy:
The State of Michigan (SOM) Disability Management Office (DMO) and the Department of Labor and Economic Opportunity’s (LEO) Workers' Disability Compensation Agency administer the workers’ comp law in the state. The law, according to the Michigan Workers’ Disability Compensation Act, requires employers with one or more employees to be covered by an active workers’ compensation insurance policy.
Businesses can obtain workers’ comp coverage through a partner like EverPeak Insurance. Alternatively, companies that meet the state’s requirements may also apply to be self-insured.
Employees can verify online if their employer has coverage.
Policies include protection for full and part-time workers.
Some exemptions from workers’ comp in Michigan may include, for example:
Workers' compensation covers a range of work-related injuries and illnesses, including physical injuries resulting from an accident and occupational diseases that may develop over time due to job conditions.
Michigan workers’ comp insurance provides three types of benefits for work injuries:
Injured workers are paid 80%, after tax, of their average weekly wage.
As of 2023, Michigan’s workers’ comp weekly benefit amount maximum is $1,095.
In the event of a work-related injury or illness:
Employees in Michigan should report their injury to their employer immediately but no later than seven days from the accident.
The employee should immediately seek medical attention.
If the workers’ compensation claim is accepted, an injured employee may begin to receive workers’ compensation benefits, such as lost wages and medical benefits.
Following their recovery, a worker is expected to resume work safely. If a work injury has left an injured employee unable to do any type of work, the employee might be entitled to permanent disability benefits.
During the first 28 days of care, the State of Michigan’s Workers' Compensation’s claims process administrator, Sedgwick, has the right to select the injured worker’s healthcare provider.
After the 28-day period, injured workers are free to change doctors if they wish. To change, employees must notify Sedgwick and the Disability Management Office (DMO) of their desire to change and provide the name of the physician they wish to select.
If an employee’s work-related disability results in them missing work for:
Injured workers who disagree with the outcome of their claim can submit a mediation request with Michigan’s Department of Labor and Economic Opportunity.
Generally, unless exempt, employers in Michigan must carry workers' compensation insurance or qualify for self-insurance. Compliance with this requirement is essential to protect both the employer and employees.
When selecting a workers' compensation insurance provider, consider factors such as the provider's experience in the industry, financial stability, coverage options, claims process, customer service, and cost.
We recommend requesting multiple quotes and comparing the offerings before making a decision.
Covering your business and employees with a trusted insurance partner — like EverPeak — brings peace of mind so you can focus on your bottom line.
In Michigan, the penalties for businesses without workers’ compensation coverage are severe. Businesses may be prohibited by the Workers' Disability Compensation Agency from employing any persons in their business until workers' compensation insurance is obtained.
Additionally, employers may face a $1,000 fine, imprisonment for a minimum of 30 days (up to 6 months), or both. Each day without insurance is considered a separate violation.
In most cases, policies bar employees in Michigan from suing their employers for work-related injuries or illnesses. The workers' compensation system provides an exclusive remedy, meaning that employees typically cannot file a lawsuit against their employers. Instead, they must pursue a workers' compensation claim to receive benefits for their injuries or illnesses.
Generally, a business’s workers’ compensation policy does not cover independent contractors in Michigan. Workers' compensation laws typically apply to employees rather than independent contractors.
However, it's important to note that the classification of a worker as an independent contractor or an employee can be complex, and misclassification can lead to legal disputes. If unsure whether an independent contractor should be treated as an employee, seek legal guidance.
The incident should be reported immediately or within a few days of the occurrence. Prompt reporting helps ensure the necessary steps are taken to initiate the workers' compensation claims process.
Employees can verify online if their employer has coverage.