An Overview of Michigan Workers Compensation Law
The laws that cover workers' comp in Michigan can be overwhelming and confusing for many. To help clear up some of this I have included common terms and phrases that you may hear if you are involved in a comp claim with your employer after a work-related injury.
Agency: Injured workers and their employers are governed by the Workers Disability Compensation Act. The Act was first adopted in 1912 and provides benefits to individuals who are hurt at work while limiting liability for employers. The mission of the Workers Compensation Agency is to administer the Act and provide prompt, courteous, and impartial service to all stakeholders.
Magistrate: The Board of Magistrates was created as a quasi-judicial administrative body to decide workers compensation cases. Magistrates are appointed by the governor and are tasked with deciding contested cases. Hearings are held at various locations around the state.
Comp Rate: Add the highest 39 paid weeks in the last 52. Divide this number by 39 to calculate an average weekly wage. The comp rate will be approximately 80% of the after-tax value of the average weekly wage. This works out to be about 60% of gross pay. Please note that the comp rate is subject to a state-wide maximum.
Notice of Dispute: This is a state approved form that is used by employers and insurance companies to dispute benefits. An employer or insurance company can dispute all or some workers compensation benefits at any time.
Control date: A control date is a type of hearing where all parties appear with the magistrate to ensure that the case is moving towards resolution. Control dates happen about every sixty days and several are needed before a magistrate will set a firm trial date. These hearings are important because it gives both sides the opportunity to develop the issues, exchange medical, and discuss resolution.
Trial: This is a formal hearing before a magistrate who will hear evidence and make a determination as to the facts and law. Witness testimony will be taken under oath and is always recorded. Other evidence submitted at trial includes medical records and deposition testimony.
Facilitation: Most cases must go through facilitation before trial can begin. Facilitation gives both sides the opportunity to informally present their arguments to another magistrate who will not be deciding the case. The magistrate will attempt to come up with a dollar amount for settlement. Many workers compensation cases are resolved through facilitation but neither side has to accept the amount suggested by the magistrate.
Redemption: If a person decides to settle their workers compensation case, it must be approved by a magistrate at a redemption hearing. The magistrate will be given a brief explanation as to why the case is being settled. The magistrate will also want to hear that the person understands what benefits are being given up as part of the settlement.
Reasonable employment: Sometimes an employer will require that an injured employee return to work with restrictions. This is done to reduce the amount of wage loss benefits that need to be paid. Reasonable employment (sometimes called favored work) is work within a person’s capacity to perform that poses no danger to health and safety, and is within a reasonable distance from their home.
Independent Medical Examination (IME): This is when an employer or its insurance company have a claimant examined by a doctor of their choosing. No treatment is provided as the doctor is only there to give a medical opinion. Attendance is required or benefits can be suspended. IME doctors rarely support a claim for benefits.
Disability: A person must prove disability to receive wage loss benefits. Disability is not the inability to do past work. A person must show a limitation of his or her ability to earn maximum wages in work suitable to qualifications and training. This includes jobs never performed before. A disability is partial if the person retains a capacity to work at a lower pay level.
Stokes Exam: Stokes vs. Chrysler LLC is a 2008 Supreme Court case that attempts to clarify the burden of proof in a workers compensation matter. It ended up making it much more difficult to prove disability for the injured worker. Vocational experts must now be hired in almost every matter to perform a transferable skills analysis and labor market survey. The injured worker must define the universe of jobs that he or she is qualified to perform at maximum wages and then somehow show that none are available. This is frequently used to stop or reduce the payment of benefits.
Wage Earning Capacity: Think of wage earning capacity as a person’s ability to earn income in other employment taking into consideration their work injury and restrictions. An employer or insurance company can use a person’s wage earning capacity to reduce the amount of wage loss benefits paid. It does not matter if the person has a real job or is earning actual wages. This is often used to reduce or stop the payment of benefits.