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A Breakdown of Michigan's Workers' Compensation

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Did you know that workers’ compensation results in the exchange of more money between hands than any other area of law in the state of Michigan? When it comes to workers’ compensation, there is a lot you have to be aware of if you’re going to be an HR professional. The Michigan Workers’ Disability Compensation Act, which was adopted in 1912, governs all of the details surrounding this unique law. Prior to 1912, injuries that occurred on the job were treated in the same manner as they would off the job. This was deemed unjust due to the high case of injuries that would occur because of the dangerous manner of many factory jobs at the time. Thus workers’ compensation came about. However, this law in the early 1900s was a very different law than we see today, so it’s important to know how complex and intricate this law can get.

The Michigan Workers’ Disability Compensation Act describes workers’ compensation as the compensation an employer offers when an employee has an injury while on the job. The specifics behind this definition has changed gradually over the years to the point where there isn’t always a clear cut case when it comes to workers’ comp. Currently, there are three ways an employee can be reimbursed for an injury that occurs on the job:

  1. Wage Loss Benefits: This equates to the pay the employee would have received had they not missed work due to their injury.

  2. Medical Treatment Coverage: The cost of medical treatment with the understanding that it is necessary and reasonable. The medical treatment must only be related to the injury received while on the job.

  3. Rehabilitation Services: This is mostly provided in the form of on-the-job training that assists the employee in getting back to work and earning their normal wages in a timely manner.

It’s important to understand that there isn’t always a clearly defined formula for who is entitled to workers’ comp and who isn’t. That is why we’re going to dive into detail about what makes an employee qualify for workers’ compensation as well as some other important details you should know.

Qualifications for Workers’ Compensation

The easiest and most important distinction for workers’ compensation is that the injury must “arise out of and in the course of employment.” The exact wording of this is important to look at if you’re evaluating a claim because the “and” clearly indicates that the injury must arise out of AND take place in the course of the employee’s employment. For a more detailed breakdown of this concept, check out the Workers’ Comp Resource Center’s blog Understand “Arising Out Of and in the Course Of” Concepts. Consider, for instance, that a machine malfunctions and injures Employee A during the course of her usual duties on the clock. This is a pretty clear cut case that she is probably entitled to compensation. But what about Employee B, who threw his back out when not on the clock, but while loading up his car with work related materials? As easy as it is to evaluate Employee A’s claim, the majority of workers’ compensation issues you’re going to come across will be more in line with Employee B’s situation.

Typically, if the injury occurs on the employer’s premises or if the job duties directly caused the injury, the claim will likely be legitimate. Injuries sustained on the way to or from work, on the other hand, are rarely compensable. That being said, the increased popularity in telecommuting in recent years makes it difficult to discern when you’re on the clock and when you’re not. That is why employee compensation claims have to be situational almost across the board, which causes a huge headache for HR.


So we understand how Employee A’s injury arose out of and in the course of employment, allowing her to claim workers’ compensation. We’re safe in assuming that her claim would go through because the machine malfunctioned and there was nothing she could have done to prevent it. However, let’s consider a scenario where she didn’t injure herself due to a machine malfunction, but rather because she was goofing off and it was ultimately her fault. Does this still keep her qualified for workers’ compensation? The case law does take into consideration the fact that there’s going to be some level of horseplay on the job, and in most cases, the claim would still be legitimate. Where it doesn’t cover the employee is when there is intentional or willful misconduct. There is a lot of room for interpretation when it comes to defining “willful misconduct”, so an employer is more likely to contest an injury that is the result of horseplay.

When an Employee Can Make a Claim

Notice of an employee’s injury must be provided to the employer within ninety days of when the injury took place. The notice can be provided to a supervisor or manager verbally or in written form. It is advisable to have written documentation of all injuries that occur within the workplace in order to have records to refer to in case a discrepancy arises. Employers should have a company accident form of some sort, though an employee can always create one if necessary.

The actual claim itself must be done within two years of the injury. Again, this can be done by simply asking the employer for the aforementioned compensation (i.e. wage loss benefits, medical cost reimbursement, and/or rehabilitation services), though having it in writing is best to ensure proof of the claim is on record. It is rare for an employee to successfully obtain collection for injuries further than two years prior, though in some cases an experienced workers compensation lawyer can make a solid case.

Requirements for Filing a Claim

When an employee files a claim for workers’ compensation, it’s important to set up a mediation or hearing. This is usually done with the assistance of an attorney, known as the magistrate, though it is possible to go through the process completely internally (but this is not advised). At that point, it is a good idea to hold a pre-trial within the next sixty days from the filing date. At the pre-trial the magistrate will then set up a control date, typically another sixty days out, to give the parties the chance to exchange all necessary information such as wage and medical records. This will also be the period of time where the employer will choose a doctor to examine the individual’s injury. Over the course of these sixty days, both parties can build a case to determine if the injury is compensable or not.


Your standard timeframe for a workers’ compensation case can last up to a year, and sometimes more! When a claim is highly contested with strong evidence on both sides as to whether the case is legitimate, the timeframe can get even longer. Degenerative changes are a major gray area when it comes to workers’ compensation. An employee who has chronic back pain could attribute the pain to a workplace injury years earlier, while the employer could just as easily argue that it’s the standard “wear and tear” of getting older. Are you starting to see why some of these cases go on for so long, and why it has to be a case by case basis?

At any time during the trial, either party can take the case to the Michigan Appellate Commission for further review. Throughout the appellate process, it falls on the employer to pay 70% of benefits lost and medical expenses accrued at that time. The employer does, however, have the right to have the employee examined by a physician of their choosing during what is called an independent medical examination. They can also have a vocational expert evaluate whether the individual has the capacity to complete any of their normal duties on the job (or a similar job in which they are qualified to perform), thus allowing them to work for their normal wages.

Redemption Settlements

Many workers’ compensation cases end in a settlement known as redemption. This means that the employee gives up all workmans’ compensation benefits including wages lost, the cost of medical treatment, and rehabilitation services, in exchange for a lump sum of money. In return, the individual will waive their right to any and all claims, be they work related or wrongful termination, and essentially walk away from the employment with no seniority rights to be rehired by the employer. The magistrate must approve of the redemption after the hearing is held.

Denying a Claim

If the employer does not believe that the injury occurred during the course of employment, they can simply deny the claim. They will have to file a notice of dispute on Form WC - 107 in order to get the litigation process started. If this notice is not filed, the employer will likely pay benefits to the employee in some form or another. You have a second opportunity to dispute a claim if your doctor of choice claims the injury was not caused in the course of employment during the independent medical examination. There must be a cause and effect relationship that indicates that the injury was a result of a mishap at work. It falls on the plaintiff (the individual who initiated the claim) to prove this connection, not the employer.

Independent Contractors

While many employers believe that hiring independent contractors is an easy way to avoid workers’ compensation claims, this isn’t always the case. There are millions of employees and independent contractors that have been misclassified, so it’s important that you understand the difference between the two. If you assume you have an independent contractor on your hands and a workplace injury occurs, you might be in for rough ride.

In general, most workers’ compensation cases are resolved without dispute. Getting a lawyer involved can be costly, so an adjuster or HR representative will try to settle the case internally. However, the more you can learn about workers’ compensation guidelines, the better prepared you will be for those claims that are not very clear cut.

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