Options if Your Michigan Employer Does Not Have Workers Comp Insurance Coverage
Most private employers are required by Michigan law to purchase workers comp insurance. This is to protect both the employer and the employee in the event of a work-related injury or illness.
Employers required to purchase workers comp insurance in Michigan:
All private employers, other than agricultural employers, who regularly employ 3 or more employees at 1 time.
All private employers, other than agricultural employers, who regularly employ less than 3 employees if at least 1 of them has been regularly employed by that same employer for 35 or more hours per week for 13 weeks or longer during the preceding 52 weeks.
All public employers.
Householders employing domestic servants if they employ anyone 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks.
Employers who can exclude employees from the workers comp system:
Sole Proprietorship– If it has one or more employees and all employees are the spouse, child, or parent of the sole proprietor.
Partnership – If all employees are partners.
Stock Corporation – If all employees are corporate officers and own 10% or more stock in the corporation.
Limited Liability Company – If all employees are members and are also managers and own 10% or more interest in the business.
Don’t give up hope if this happens to you. Here are some options that may be available for your situation.
Workers comp benefits
An employer is not off the hook just because no insurance is available. You still have the right to medical treatment and wage loss benefits if you cannot work. The problem in these types of situations is collection. Your employer may close the business or file bankruptcy. If the employer is a corporation, the officers and directors of the corporation shall be personally liable for any portion unsatisfied after execution against the corporation.
Workers comp is your exclusive remedy for an injury at work. However, there is an exception if your employer does not have insurance coverage. You may be allowed to file a tort action against your employer for negligence. You can ask for additional damages including pain and suffering.
Failure to comply with the Act is taken seriously by the State of Michigan. Penalties include a fine of $1,000 and imprisonment for not less than 30 days nor more than 6 months. Each day could be considered a separate offense.
Where to turn for help
Contact an experienced lawyer if your employer is not playing by the rules. You may have options that you do not even realize.