An Overview of Workers' Compensation in Michigan

Workers’ compensation is a unique area of the law. It’s all governed by the Michigan Workers’ Disability Compensation Act. Prior to 1912, all injuries that occurred on the job were to be treated as a personal injury matter. If you were to get in a car accident, or you were to slip and fall while you’re visiting a store, it was all the same. Back in 1912, everyone had adopted a statute that made it almost automatically a liability on the employer’s perspective, but it really limited the amount in damages that an individual could recover if an injury were to happen on the job. 

Worker’s compensation is when someone, an employee, has an injury while working. The definition of that has been defined by case law over the years, but that is the basics when you’re dealing with a workers’ compensation issue. Now, there are three things available to someone when they are injured on the job.

  1. Wage loss benefits for the amount of pay you would have received had you not been injured on the job.
  2. The cost of medical treatment as long as it is necessary and reasonable. This has to be related to the on-the-job injury. 
  3. Some rehabilitation services. This is mostly vocational rehabilitation services such as on-the-job training or some other training that will help the individual get back to the job and earning their normal wages. 

One of the first requirements for workers’ compensation is that the injury must arise out of and in the course of employment. For example, if John Doe slips, falls, and breaks his leg while loading a truck for his employer, he is most likely entitled to compensation. What if, however, he was on his way to work or on his lunch hour? What if he was on a business trip, but not engaged in business when he fell? Unfortunately, there is no simple principle that can be applied to all cases. An injury is likely compensable if it happens on the employer’s premises or if the employment provided the occasion for the injury. Generally, injuries that occur on the way to or from work are not compensable. It all depends on the situation. This is an evolving area of the law because so many people are working from home or remotely, it makes it very difficult to draw a line in the sand as to when you are working and when you are not working. 

Something that most people don’t realize is the case law takes into consideration that there’s going to be horseplay on the job. Where it doesn’t cover you is when there is an intentional or willful misconduct act. So if someone intentionally hurts another person that is outside of the workers’ compensation act. However, if it’s just joking at the water cooler and someone slips and falls while taking a five-minute break that is likely a compensable issue. There is a lot of gray area there and because of that, employers will likely contest an injury that arises out of horseplay. 

There are a lot of notice and claim requirements in workers’ compensation. Unlike other areas of the law, there really is no statute of limitations that apply to workers’ compensation. For example, let’s look at what the statute of limitations may be in a contract case. Let’s say you drew up a contract and sold something to your neighbor. Typically, in this case, you would have six years to sue on that contract. Maybe you didn’t get payment or something went wrong with the transaction, you have a six-year window to sue. Once you hit that six-year mark, you no longer can submit a claim and you are entitled to zero after that. In workers’ compensation, there is typically a two-year-back rule. This doesn’t mean a person only has two years to make a claim, rather that they are only entitled to two years back of benefits. There are other circumstances, too. If someone was paid compensation and then it was disputed, they now have a one-year back rule. 

There are also steps the worker needs to take. As a worker, you need to immediately notify your employer of any injury on the job. There is a certain procedure that needs to be followed so that notice of injury needs to happen within 90 days of the date of the injury. Although, if they do not provide that notice within the 90 days, it does not forbid the employer from having to compensate that individual unless the employer themselves is harmed by the individual not making the claim. Let’s say someone doesn’t report a claim, it doesn’t give the employer the opportunity to have that person examined as they otherwise would develop that causal relationship between the injury and the disability if there is one. Let’s say John Doe slips on the job and hurts his back, but doesn’t report it. If he doesn’t report it, then we can’t send him to an employer clinic to be evaluated and have an x-ray and all of those things that would allow us to look at instance and time very closely to the incident and make a determination whether that injury was work related or not. In this case, it does hurt the employer if the individual doesn’t report it for six months and we don’t have the opportunity to build the case. 

Realistically, most cases are settled without dispute. A lot of times an adjuster or an HR person can settle the case internally without having to get a lawyer involved. One interesting fact that most people don’t know is that workers’ compensation exchanges more money between hands than any other area of law in the state of Michigan. Another requirement for the employee is to file an application for mediation or hearing. Typically, this is through the help of an attorney. Some people try to go through this process by themselves; it is not advisable, but some individuals do file this application without counsel. From there a pre-trial is usually held within the first 60 days of an application for mediation or hearing being filed. After that, the magistrate would put the case on a control date which is typically another 60 days out. A control date gives the parties an opportunity to exchange things like wage records and medical records, and have the individual examined by a doctor of the employer’s choosing. All of these things allow for both parties to build a case and see if the injury is compensable or not. 

A realistic timeframe for a workers’ compensation case is typically a year, but there are plenty of cases that do reach the two-year mark. If it is a highly contested case where both sides have evidence that it is or is not related to the workplace. Sometimes there are situations where it is degenerative changes. If you have a guy who is 50 years old who has a back injury, typically he has some of his own degenerative issues with his spine outside of any issues that might have happened on the job. This is why it can take a while to see what the cause of the injury might be. 

If the case goes through trial, either party has the opportunity to take it to the Michigan Appellate Commission for another level of review. During the appellate process, the employer is required to pay 70 percent of the benefits lost, which might be an issue, as well as any medical expenses during that time. Every employer has the right to have an injured employee examined by a physician of their choice. This is called an independent medical examination. An employer can also send the individual to a vocational expert for an evaluation of his or her qualifications, training, and experience, which will then be used to determine if there is work available within the individual’s capacity to perform. For example, if someone works in a shipping dock and injures their back, they can be examined, and based on that examination they may be able to find a different position that would allow them to earn similar wages. Individuals are often evaluated by vocational experts retained by their own attorneys as well. 

A large percentage of workers’ compensation cases result in a settlement known as redemption. During redemption, an individual will typically waive their right to any and all claims, whether it is work related or wrongful termination; anything local, state, or federal law. They are essentially washing their hands clean of the employment and going their own way with no seniority rights to be rehired by the employer. Redemption must be approved by a magistrate after a hearing is held. 

It is permissible to deny a workers’ compensation claim if you have reason to believe that the injury did not happen during the course of employment. You can file a notice of dispute which is form WC107, which will get the litigation process going. If you don’t file this notice, you will probably end up paying benefits to the individual claiming workers’ compensation. You can also dispute a claim if the doctor in which you as the employer sent the individual to does claim that the injury was not caused by the work. There always has to be a causal relationship showing that the injury was a result of a mishap at work. If there is not a causal relationship it is likely the employer will have the better outcome. It is the plaintiff's burden to prove this connection, it is not the employers. 

Some basic conclusions from recent case law are:

  • A disability is always compensable if it is solely and directly caused by a work-related injury or illness.
  • A preexisting condition may become compensable if the underlying pathology is aggravated by employment to create a medically distinguishable condition. The aggravation merely of symptoms will not be sufficient. 
  • In the case of mental disabilities, cardiovascular conditions, and conditions of the aging process, the plaintiff must prove that the work applies to degenerative arthritis for injuries on or after December 19, 2011.
  • In death cases, the normal standards apply when death occurs instantaneously on injury. When the death occurs at a later date, work must be the sole proximate cause of death, meaning it was the most immediate, efficient, and direct cause.

Some businesses hire independent contractors and think that they can avoid workers’ compensation by doing so, but this is not necessarily the case. In the event of an injury, you will need to follow the IRS guidelines of what an employee is. To sum it up, the IRS says “generally the relationship of employer and employee exists when the person or persons for whom the services are performed have the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work, but also as to the details and means by which that result is accomplished.” 

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