Michigan Workers’ Compensation Requirements

An A-Z guide on everything you need to know before you purchase a Michigan Workers' Comp Insurance Policy

Do you have one or more employees? If so, Michigan workers’ compensation requirements say you must carry worker’s comp insurance. However, you will find some exemptions to this rule, as well as some differences in terms of how the state structures its workers’ comp laws.

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There are different rules based on your industry and how many weeks you have employees for.

Self-employed professionals, sole proprietors and 1099s are not required to carry workers’ comp insurance.

Is workers’ comp insurance required in Michigan?

Yes, workers’ compensation insurance is required for any business with one or more employees. It’s also important to realize that Michigan workers’ compensation requirements mandate any employer be able to prove they can pay benefits if an employee is injured on the job or suffers from a work-related disease. 

Workers’ compensation insurance is required in Michigan in very specific situations. For instance, businesses that employ one or more people for 35 hours or more per week for 13 weeks or longer during the year are required to carry workers’ comp insurance.

The same is true for private employers that “regularly” employ three or more people at one time, agriculture employers that employ three or more people for 35 hours or more per week for at least 13 weeks in a year, and households that employ domestic employees for 35 hours or more week/13+ weeks within a year. 

Public employers of all types are required to carry workers’ compensation insurance.

Are self-employed professionals required to carry workers’ compensation in Michigan?

According to Michigan workers’ compensation requirements, self-employed professionals are not required to carry workers’ comp insurance. The same is true for sole proprietors, as well as for 1099 workers.

Who is exempt from Michigan workers’ compensation requirements?

While most workers must be protected by workers’ compensation insurance, you will find some other exemptions, these include the following: Domestic workers who do not meet the hours/weeks worked requirement, Business partners, Corporation officers and family members working for relatives.

How much is workers’ comp coverage in Michigan?

Your Michigan workers’ comp rate will depend on the following factors:

  • The type of business you have
  • The size of your payroll
  • Your safety record
  • Claim history
workers comp policy cost

How can Michigan small business owners save money on workers' comp?

While Michigan workers’ compensation requirements are pretty stringent, small business owners can find many ways to obtain the coverage they require without overpaying for it. 

A few ways to reduce your costs include:

  • Ensure your employees are correctly classified.
  • Start an employee safety training program.
  • Create a return-to-work program for injured workers.
  • Use your dividends each year after your audit.

How does workman’s comp work in MI?

The process you’ll follow with Michigan workers’ compensation requirements is similar to that of other states. You’ll need to first get a quote on workers’ comp based on your estimated annual payroll. 

Next, you’ll pay your premium and get a year of coverage. When the term ends, the insurance company will audit your payroll to determine its accuracy. You’ll get a refund if you overpaid and a bill if you underpaid.

What does workers’ comp cover in Michigan?

Workers who file a workers' comp claim in Michigan can receive benefits for the following:

workers comp covers medical bills

Medical bills

workers comp covers lost wages

Lost Wages

Workers' comp coverage also protects employers from legal action. This means that if an employee sues your business because of a workplace injury, the insurance will cover the legal costs of the case.

How can business owners purchase workers’ comp insurance in Michigan?

Michigan workers’ compensation requirements make it relatively simple to obtain insurance coverage.

The most common way to purchase workers’ comp insurance is to get a quote from n agent. At Kickstand Insurance, we can give you an online quote in just seconds.

If you can’t obtain insurance through an insurance company because of risk, you can buy from the state fund, which is the insurance option of last resort because it is more expensive. 

For large businesses with the funds to cover workers’ medical bills and other related costs, there’s the option to self-insure. You’ll need to meet Michigan’s workers’ comp requirements for self-insurance and file the appropriate forms

What happens if I don’t have workers’ comp insurance in MI?

Michigan takes its responsibility to protect workers and businesses very seriously. Employers who fail to purchase insurance can face a range of ramifications, including:

  • A prohibition on hiring any new employees until you have purchased insurance
  • $1,000 fine or imprisonment for 30 days to six months
  • Civil lawsuits from employees/survivors

Note that every day you go without workers’ comp insurance is a separate offense under state law.

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What are workers’ comp death benefits in MI?

Michigan workers’ compensation requirements spell out the death benefits offered to surviving spouses and dependents in the event of a qualifying employee death. 

These include:

  • Up to 80% of an employee’s average weekly earnings
  • Death benefits payable for up to 500 weeks or when a beneficiary turns 21
  • Up to $6,000 for funeral expenses

Note that Michigan recognizes spouses, children, grandchildren, siblings, grandparents, parents, and other family members as dependents/beneficiaries.

How do workers’ comp settlements work in MI?

Under Michigan workers’ compensation requirements, employees, employers, and insurance companies can come to a mutually agreeable decision, called a settlement. 

This can be either a lump sum settlement or a structured settlement that pays out over time. All settlements must be presented to the Michigan Workers’ Compensation Agency for approval. 

In most cases, a settlement means the employee waives their right to pursue further benefits regarding the same injury.

What are the statutes of limitation regarding MI workers’ compensation?

Workers have two years from the date of the injury to file a workers’ compensation claim. However, under Michigan workers’ compensation requirements, employees must notify their employer within 90 days of the injury and then file a claim with the state within the two-year timeframe.

How do I get a workers’ comp insurance policy with Kickstand Insurance?

Start by filling out a short online form about your business. We’ll use that info to get you an estimated quote. Then, one of our experienced agents will contact you to review the quote and make sure you are getting the absolutely lowest rate possible for your business. Once the quote is finalized, you’re ready to buy the policy - often with coverage starting that day!

Learn more about Workers' Comp in Michigan

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