Workers Comp in Michigan

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Michigan’s complicated workers compensation system can add a lot of financial pain and frustration to the workplace injury that any of the state’s 4.5 million workers might suffer on the job.

Michigan’s workers compensation laws and their application are so complex and confounding that regardless of how severe or slight an injury may be, no one knows for sure if the injured party will receive benefits and for how long.

“Michigan used to be a role model for states to follow on workers comp cases,” Joel Alpert, a Detroit workers comp attorney for 43 years, said. “It’s still a role model, but now it’s a model for limiting benefits to workers and making it hard to get them. “

How Michigan treats the term “disabled worker” is a perfect illustration of the problem.  State legislators and judges have batted the definition of “disability” back-and-forth like it’s a game of ping-pong for the last 40 years and the truth is, nobody can tell you the score now.

The truth is, however, that a finding of long-term disability in workers compensation cases is rare, but so are cases that involved. Strains and sprains represent 30% of cases with cuts and punctures accounting for another 19% and contusions 12%. The accidents resulting in injury are caused by material handling (32%), slips, trips or falls (16%), being struck with an object (10%) or accidents involving tools (7%).

The majority of cases receive the medical treatment needed, compensation due and the employee returns to work.

However, that still leaves a “minority” of cases that aren’t easily treated, compensated and return to work is an issue. That’s where workers comp attorneys usually come in and trials are needed to interpret the law.

“Workers comp cases are supposed to be handled through simple summary proceedings, but they’re anything but simple these days,” Alpert said. “In fact, it’s not even possible to have a summary proceeding because of all the layers of proof we have to meet.”

Jack Nolish, who is the director of Michigan’s Workers’ Disability Compensation Agency (WDCA), agreed that finding a clear path to benefits has gotten difficult.

“The system has gotten so complicated that for an individual to try and weave their way through it is just a difficult burden, if for no other reason than cases have to be substantiated with medical testimony and the average lay person is not in a position to go running around taking doctor’s testimony,” Nolish said.

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How to File a Workers Compensation Claim in Michigan

An employee injured in the workplace should report it to a supervisor immediately, regardless of the severity of the injury, and promptly seek medical assistance. It is in everyone’s best interest to document an injury and have it treated as quickly as possible.

If you report the injury to your employer, it is their responsibility to inform their insurance carrier. If the injury keeps you out of work for more than seven days, the employer must report it to Michigan’s Workers Disability Compensation Agency (WDCA).

Michigan laws say that the injured worker must see and be treated as needed by the employer’s designated physician or medical facility for the first 28 days following an accident. Beyond that, injured employees can choose their own doctor, but only after notifying the employer and insurance carrier.

If possible, the employee should take note of the time, location and cause of the accident, as well as the names of employees who witnessed it. If you have a smartphone available, it is extremely helpful to take pictures that help document the situation.

The more complete your documentation of the incident is, the easier the claims process will be.

Employer’s Responsibility for Filing Claim

It is the employer’s responsibility to notify their insurance carrier when an employee is injured on the job site. If the recovery period for the injury is going to last more than seven days, the employer also must file Form WC-100 with the state’s Workers’ Disability Compensation Agency.

Form WC-100 asks for basic information (employee’s name, address, social security number, etc.) as well as the employer’s general business information. The form asks questions about where and how the accident occurred and descriptions of the injury, so it is best to have conducted at least a cursory investigation of the incident before filling out the form.

If, for any reason, your employer chooses not to file a workers compensation claim form, you may do so yourself. Form WC-117 is available on the state website, along with other forms pertinent to your claim.

Insurance Carrier’s Responsibility for Claims

If an employer is covered by workers compensation insurance, the carrier claims adjusters will take over the investigation. The insurance carrier’s adjuster will determine what benefits the employee qualifies for and notify both the employee and employer.

If the employer is self-insured, the case typically will go through a workers compensation department within the company or be sent to an outside agency that handles workers compensation claims.

Eligibility for Workers Comp in Michigan

Michigan is a mandatory insurance state. All employers must provide workers compensation insurance through a state approved carrier. The employer may elect to be approved by the state agency to be a self-insurer or a participant in a group self-insurers’ organization.

If an employer has three or more employees at any one time or pays one employee for 35 hours of work, they are required to have workers compensation insurance.

Special arrangements may be approved for major construction projects to allow for single coverage of all employees on a specific site.

Injuries must arise out of and in the course of employment at a work site. If an employee is injured as the result of intentional and willful misconduct, they are not entitled to benefits. If they are injured at a company picnic or office party, or where the primary purpose of the activity is social or recreational, in most cases, they are not covered.

Employees traveling to and from work are not covered. However, if an employee’s job requires travel, or if the employee is on a special mission, he/she is covered while traveling.

What Happens If a Workers Comp Claim Is Disputed?

If an injured worker or the insurance carrier disputes the claim, it goes to the Workers Disability Compensation Agency for resolution.

If the worker does not have a lawyer, there is a facilitation process. The WDCA tries to help the two parties reach a resolution and Nolish says that happens most of the time.

However, if the facilitation process does not resolve the matter, or the worker has a lawyer, the case is referred to a magistrate, who serves as the judge. Workers compensation cases in Michigan are bench trials. There is no jury.

Michigan is a wage-loss compensation case state. Not only do you have to prove that the injury arose out of and was in the course of employment, but as a result of that injury, you are losing wages.

The magistrate makes the final decision on the matter. There is no jury in a workers compensation case.

The trial includes documents, witnesses and medical testimony. The magistrate has 42 days to reach a verdict and write a detailed opinion on what they found.

The vast majority of reported work-related injuries are compensated in these cases. However, Alpert says that is not always the case with significant work-related injuries.

“The laws need to be rebalanced to be more equitable to injured workers,” Alpert said. “Workers gave up the right to sue for pain, suffering and employer’s negligence. In return, they are supposed to be guaranteed benefits and it’s supposed to be simple to get them, but there has been a complete reversal of that. It’s not simple anymore.”

How to Appeal a Workers Comp Claim in Michigan

Either party in a workers compensation case can dispute the magistrate’s decision but be prepared for a long process that may take up to a year to reach a final decision.

The first step in the process is to file an administrative appeal with the Workers’ Disability Compensation Appeals Commission. The group is made up of three commissioners appointed by the governor.

The WDCA appeals commission will look at record as a whole to see if the decision was based on competent material and substantial evidence. The appeals commission could affirm the original verdict; it could ask for additional testimony and fact finding or it could reverse it.

If two of the three commissioners agree on an outcome, that is the outcome. The reversal rate is not very high.

If either side wants to appeal beyond that, it must ask the Michigan Court of Appeals to review it. The Court of Appeals can choose to review the case or deny the application. Very few cases get that far. The Court of Appeals addresses errors in law that may have been made by the magistrate or appeals commission.

The last stop in the appeal’s process is at the Michigan Supreme Court, which also is by application for leave to appeal, but it is rare for a case to reach that level.

What Benefits Does Michigan Workers’ Comp Provide?

The laws in Michigan provide benefits to injured workers in four categories that include:

  • Wage loss benefits
  • Medical benefits
  • Rehabilitation benefits
  • Burial allowance in case of death

There are two ways injured workers can resolve claims without going through a trail.

  1. The injured worker can accept a lump-sum payment of benefits from the insurance carrier, which is called a “redemption of liabilities.”
  2. The second is called a “voluntary payment” meaning the two sides agree to start paying benefit.

If the case goes to a magistrate, the magistrate has three options for settling the case:

  1. The magistrate could enter a “closed award” which means the employee got injured, was threated, benefits were paid and he is not back at work.
  2. The magistrate could enter an “open award” which is considered an all-out win for the employee. He got injured on the job; he can’t work; he’s entitled to medical benefits; he’s not got any residual capacity so he receives approximately 80% of his wage capacity and that could go on for the rest of his life, or until the magistrate says to stop.
  3. The magistrate could decide to deny benefits.

Wage Loss Benefits

Wage loss benefits begin after the injured worker misses at least seven days. If the injury prevents an employee from working for more than seven days, compensation benefits begin on the eighth day.

If the injury continues beyond two weeks, the injured worker will receive wage loss compensation for the first week of disability. The first wage compensation check is payable on the 14th day after an injury. It is not considered late until the 30th day following an injury.

Benefits can be paid as long as the worker is disabled, possibly meaning for the rest of their life, but can be reduced up to 50% after age 65 or upon receipt of Social Security benefits. Benefits may also be reduced by other employer funded benefits such as sick pay, retirement pensions or disability benefits. Wage loss benefits can be reduced by wages that the injured worker may be able to earn based on their residual earning capacity.

Weekly wage loss benefits are calculated based on the injured workers average wage for the highest 32 weeks of the previous 52 weeks. The benefit rate is 80% of the after-tax value of their average weekly wage. The maximum amount of wage-loss benefits a worker can receive is 90% of the average weekly wage (AWW) from the previous year. The AWW for 2021 in Michigan is $975. There is no minimum benefit for an ordinary injury, but someone who suffers a specific loss or is totally or permanently disabled, is entitled to 25% of the AWW.

If you return to work on medical restrictions that cause you to receive less wages than your AWW, you could receive partial benefits to close the gap.

Specific Loss Benefits

If a worker loses a hand, a foot or functional use of an eye, finger, etc. the state of Michigan allows for “specific loss” benefits. These benefits are equal to 80% of your after-tax, average weekly wage and are paid for specific number of weeks, depending on which body part you lost.

Some examples of specific loss benefits would be 215 weeks for a hand; 65 weeks for a thumb; 269 weeks for an arm; 215 weeks for a leg and 162 weeks for an eye and 11 weeks for a toe.

You will continue to receive the benefits for the scheduled number of weeks, even if you are able to return to work during that time.

For example, if you lost a hand in an accident at work, you would be entitled to 265 weeks of specific loss benefits.

Total and Permanent Disability Benefits

If a worker meets the requirements for being “totally and permanently disabled,” they would receive the same benefits as in an ordinary case, for 800 weeks, whether they work or no during that time.

Medical Benefits

Injured workers must see and receive treatment from medical providers approved by the employer or insurance carrier for the first 28 days of treatment. After that, they can choose their own doctor, but must inform the employer or insurance carrier.

Workers are entitled to have all reasonable and necessary medical care paid for by their employer or the employer’s insurance carrier. The list of services that should be paid include:

  • Medical
  • Surgical
  • Hospital
  • Dental
  • Nursing care
  • Chiropractic care

Medical benefits also include medications and appliances such as braces, crutches, canes, prosthesis, wheelchairs and fitting out vans or home to be handicap accessible.

Rehabilitation Benefits

Michigan law does not require an employer to offer an injured worker a job, but employers, employees and insurance companies agree that getting a worker back on the job quickly is the best outcome.

In some cases, the employer may have to alter workstations to accommodate an injury or ask the worker to do a different job altogether.

There are training programs assist injured workers in learning new jobs. The Vocational Rehabilitation for Injured Employees is designed to offer counseling, guidance, retraining and job placement assistance.

Injured workers are assigned a counselor who will work to find employment consistent with your pre-injury position and wage level. However, if the worker can’t do the job, their benefits continue until they can work successfully or decide to reach a settlement with the employer.

Injured employees can expect to be reimbursed for expenses incurred as part of the rehab process, including mileage and education costs, including books, tuition and fees.

Death Benefits

Survivor benefits are paid directly to the dependents, not to the estate. A worker’s children are presumed to be dependents, but anyone else, including a spouse, must prove they were dependents.

If there are no dependent survivors, the only amounts paid are for funeral expenses and costs of last illness.

The amount of benefits is expected to be 80% of the after-tax value of the wages the worker received at the time of the injury. Benefits are paid for 500 weeks, but if the dependent is a child, that can be extended. If the child is physically or mentally incapacitated, the benefits continue indefinitely.

If a worker collecting benefits dies, the case ends if the death is not related to the work injury; if it is, survivor benefits are paid directly. Estate claims only involve any past due benefits that might have been  awarded posthumously if the worker dies from unrelated causes before the award.

What Happens If an Employer Doesn’t Have Workers Comp Insurance?

The penalties for employers not having workers compensation insurance are severe in Michigan.

  • The employer can be sued in civil courts by an injured worker.
  • The employer can be subject to fines of $1,000 a day and imprisonment.
  • The employer can be prohibited from operating the business until he obtains workers comp insurance.

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About the author

Bill Fay has touched a lot of bases in his 45-year career. He started as a sports writer, gaining national attention for work on college and professional sports. He had regular roles as an analyst on radio and television and later became a speech writer for a government agency. His most recent work is as an internet content marketing specialist. Bill can be reached at bfay@workerscompensationexperts.org.