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Michigan workers' compensation insurance: Your guide to requirements and getting a policy
If you’re a Michigan employer looking to protect both your business and your team, you’re in the right place. At Beyond, we provide the essential information you need to understand how workers’ compensation works and how to stay compliant.
Workers’ comp isn’t just a benefit for employees, it’s a smart safeguard for employers too. This type of insurance helps cover medical costs for work-related injuries or illnesses. And for businesses, it helps reduce legal exposure by limiting employees’ ability to sue over those same incidents.
Now let’s dive into which Michigan employers are required to carry workers’ compensation coverage.
Under the Workers’ Disability Compensation Act (WDCA), the state of Michigan mandates coverage for businesses that meet the following criteria:
Private employers with one or more employees working 35+ hours per week for 13 weeks or more in the past 52 weeks.
Private employers with three or more employees at any time, even part-time.
Agricultural employers with three or more workers meeting the same 35-hours-for-13-weeks threshold.
Households employing domestic workers 35+ hours/week for at least 13 weeks.
All public employers.
It’s worth noting that in Michigan:
Partners in a partnership are considered employees.
LLC members who manage the business are considered employees.
Corporate officers are considered employees of the corporation.
However, there are some situations where business owners may be excluded.
Yes — certain businesses or roles are exempt from the coverage requirement:
Businesses with no employees for at least 13 weeks.
Small farms with fewer than 3 employees.
Households with domestic workers under 35 hours/week.
Sole proprietors and their immediate family members.
Partnerships where all workers are partners.
Corporations where all workers are 10%+ shareholders and officers.
LLCs where all members are managers and each owns at least 10% of the business.
If your business believes it qualifies for an exemption, you’ll need to file Form WC-337 – Notice of Exclusion with Michigan’s Insurance Compliance Division.
Michigan workers’ compensation provides several key protections for employees:
Covers all necessary medical treatment — including surgery, hospital care, dental work, physical therapy, and durable medical equipment.
If an injury results in time off work beyond seven days, wage replacement kicks in on day eight. Benefits last until the employee can return—or indefinitely if the disability is permanent.
If an employee can’t return to their previous role, the policy may cover retraining, education, or job placement services.
If a fatal workplace incident occurs, dependents (spouse, children, parents, etc.) may qualify for funeral costs (up to $6,000) and weekly compensation based on their eligibility.
Employers in Michigan can:
Purchase workers’ comp from licensed private insurance carriers.
Apply to the assigned risk pool (via the Compensation Advisory Organization of Michigan) if coverage is denied by private insurers.
Choose to self-insure, either individually (with state approval) or by joining a self-insured group. A full list is available from the state.
Skipping this legal requirement can lead to serious consequences, including:
Paying all injury-related medical expenses out-of-pocket.
Potential lawsuits from injured employees.
Inability to hire new employees until coverage is in place.
Fines up to $1,000 or imprisonment from 30 days to 6 months.
The employee must notify the employer immediately.
Emergency cases should go to the nearest ER.
Non-emergencies should be treated by a company-designated physician.
The employer must file Form WC-100 – Employer’s Basic Report of Injury.
If the employer doesn’t file, the employee can use Form WC-117 – Employee’s Report of Claim.
Employees have up to two years to file a claim, but they must report the incident within 90 days of occurrence.
Workers’ compensation is more than a legal box to check. It’s a way to protect your business and show your employees that you’ve got their backs. With the right policy in place, you create a safer, more secure workplace, while minimizing your financial risk.
Need help getting started? The team at Beyond is ready to help you explore coverage options and stay compliant.
