Protect Your Team, Protect Your Business

Is workers compensation insurance required in Michigan?

Yes. Michigan law requires all employers with one or more employees to carry workers compensation insurance. This includes part-time, seasonal, and full-time workers. Failure to carry coverage can result in fines up to $1,000 per day and criminal penalties under Michigan’s Workers’ Disability Compensation Act.

What does workers compensation insurance cover in Michigan?

Workers compensation insurance in Michigan covers medical expenses, wage replacement (up to 80% of after-tax average weekly wage), vocational rehabilitation, and death benefits for employees who are injured or become ill due to their job. It also protects employers from lawsuits related to workplace injuries.

How much does workers compensation insurance cost in Michigan?

Workers compensation insurance costs in Michigan vary based on your industry, payroll size, claims history, and number of employees. Rates are set per $100 of payroll by classification code. According to the Michigan Workers’ Disability Compensation Agency, businesses can reduce premiums through workplace safety programs and claims management.

Who is exempt from workers compensation insurance in Michigan?

In Michigan, sole proprietors, partners, and members of an LLC may opt out of workers compensation coverage for themselves. Independent contractors are also generally not required to be covered, though misclassification of employees as independent contractors can lead to penalties.

What happens if I don’t have workers compensation insurance in Michigan?

Operating without workers compensation insurance in Michigan is a misdemeanor. Employers face fines of up to $1,000 for each day without coverage, potential imprisonment, and personal liability for all employee injury costs. The state can also issue a stop-work order, shutting down your business until coverage is obtained.