Buying workers’ compensation for:


State Fund: No

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Michigan, although some waivers are permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

All private employers, other than agricultural employers, who regularly employ 3 or more employees at 1 time or who regularly employ less than 3 employees if at least 1 of them has been regularly employed by that same employer for 35 or more hours per week for 13 weeks or longer during the preceding 52 weeks are required to have Workers Compensation Insurance. All public employers must have Workers Compensation Insurance regardless of number of employees.

All agricultural employers of 3 or more regular employees paid hourly wages or salaries, and not paid on a piecework basis, who are employed 35 or more hours per week by that same employer for 13 or more consecutive weeks during the preceding 52 weeks. Coverage shall apply only to such regularly employed employees and all agricultural employers of 1 or more employees who are employed 35 or more hours per week by that same employer for 5 or more consecutive weeks are required to have Workers Compensation Insurance.

The Workers’ Compensation law covers any household domestic worker except those employed for less than 35 hours per week for 13 weeks or longer during the preceding 52 weeks.

Agricultural and domestic employees may be voluntarily included by specific indorsement to a workers’ compensation policy in those cases where coverage is not required.

Under certain circumstances named partners and officers who are also shareholders of small, closely-held corporations may exempt themselves from the Act. Firms which wish to exclude partners or officers of a corporation but have other employees can do this by making arrangements with their insurance company. Firms in which all of the employees are either partners or owners of a small corporation may obtain a certificate of their exemption under the Act by contacting the Insurance Division of the agency.

Factors that Impact Coverage

  • You are a sole proprietor: You are considered self-employed in Michigan and are exempt from coverage. You may also exclude your employees if they are all your spouse, children or parents.
  • You are a partner: In Michigan, you are included in coverage but have the option to exclude yourself if all employees are partners.
  • You are a corporate officer: Michigan includes you but you have the option to exclude yourself, if you own 10% or more stock and all employees are corporate officers.
  • You are a member of an LLC: You are included in coverage, but if you own at least 10% of the company and all employees are members you may elect to be excluded.

Failure to Secure Compensation

There are severe penalties for the failure of an employer to provide workers’compensation coverage.

  • First of all, if a worker is injured, he or she may sue the employer for civil damages. If the employer was at fault for the injury, this might result in the payment of a great deal of money by the employer.
  • Secondly, the Workers’ Compensation Agency actively enforces the Workers’ Disability Compensation Act. It has the authority to go into court and seek an order prohibiting the company from employing any persons in their business until such time as proper workers’ compensation insurance coverage is obtained.
  • Finally, the employer may be subject to a fine of $1,000 or imprisonment for not less than 30 days nor more than 6 months, or both. Each day for which the employer is uninsured is considered a separate offense.

Employers who consistently discharge employees within the minimum times specified above and replaces the discharged employees without a work stoppage will be presumed to have discharged them to evade the provisions of the Workers’ Compensation act and is guilty of a misdemeanor.

Proof of Coverage is Required

Michigan does not have any posting requirements for Workers’ Compensation.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.