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Jay Trucks & Associates, PC
600 Pine St. Clare, MI 48617
1.800.762.8623
Workers' Compensation Frequently Asked Questions
Serving the communities of Flint, Saginaw, Traverse City and Lansing, Michigan
- What is workers' compensation?
- Who is covered by the Workers' Disability Compensation Act?
- What if I'm self-employed?
- Are independent contractors covered by workers' compensation?
- Do employers have to carry workers' compensation?
- Are there penalties if an employer does not obtain insurance or permission to be self-insured?
- When and where are workers' covered?
- Are employees covered if they are traveling on company business?
- How soon should I return to work?
- Does my employer have to offer me a job?
- "We will come to you!"
What is workers' compensation?
Workers' Compensation is a state-regulated insurance program that pays medical bills and replaces some lost wages for employees who are injured at work or who have work-related diseases, injuries, or illness. In Michigan workers' compensation provides medical, income, death and burial benefits.
Who is covered by the Workers' Disability Compensation Act?
In general, all employers in Michigan are covered by workers' compensation whether public or private employers. Exceptions to this include, but are not limited to:
- Employees of the federal government (i.e., postal workers, veterans administration hospital employees, members of the military)
- Those who work on interstate railroads (covered by Federal Employers Liability Act)
- Seamen on navigable waters (covered by the Merchant Marine Act of 1920)
- People loading and unloading vessels (covered by the Longshoremen's and Harbor Workers' Compensation Act)
What if I'm self-employed?
An owner is considered self-employed if their business is not a partnership or a corporation and is owned but just one person (a sole proprietorship). The Workers' Disability Compensation Act covers employees of a sole proprietorship, but the person who owns the business, the sole proprietor, is not an employee of anyone and accordingly is not covered by the Act.
Are independent contractors covered by workers' compensation?
When one company hires another company to come in and do some work for them, the second company is generally considered an "independent contractor" and not an employee of the first company. There can be exceptions, however. Should a company hire one person to come in and perform a specific job, disputes can arise as to whether or not that person is an employee or an independent contractor. This would need to be reviewed on a case-by-case basis.
Do employers have to carry workers' compensation?
The State of Michigan requires that every employer subject to the Workers' Disability Compensation Act provide some assurance that it can pay workers' compensation benefits should they become injured. Most employers in Michigan accomplish this by purchasing an insurance policy from a private insurance company. The insurance company then reports to the bureau that it is providing coverage for that employer. Occasionally, employers have a strong enough financial status that they can "self-insure" and pay benefits directly to their employees, if needed.
Are there penalties if an employer does not obtain insurance or permission to be self-insured?
Penalties can be severe for failure of an employer to provide workers' compensation coverage. For example, if a worker is injured, he or she may sue the employer for damages. If the employer was at fault for the injury, a large settlement may have to be paid by the employer. The Bureau of Workers' & Unemployment Compensation has the authority to go to court and seek an order barring the company from employing any persons in their business until appropriate workers' compensation insurance coverage has been obtained.The Bureau understands the potential consequences for employees whose employers do not carry appropriate workers' compensation coverage and actively enforces the Workers' Disability Compensation Act. Thus, the employer may be subject to a fine of $1,000 or imprisonment for not less then 30 days or more than 6 months, or both. Each day for which the employer is uninsured is considered a separate offense.
When and where are workers' covered?
To be covered, the injury must happen at work. Workers' compensation is designed to cover only injuries that "arise out of and in the course of the employment." It is usually fairly obvious if the injury happened at work but there can be times when this becomes questionable.
Are employees covered if they are traveling on company business?
If an employee is traveling to or from work, any injury sustained will probably not be covered by workers' compensation. Once on the premises, however, coverage would take effect. If the job requires travel, the employee will generally be covered. However, if the employee deviates from the assumed business travel, coverage may be questionable.
How soon should I return to work?
In general, even though you may not be completely recovered, it can be to your advantage, and your employers', to return to work and be given a job that you can do.
Does my employer have to offer me a job?
Michigan state law does not require your employer to offer you a job following a workers' compensation incident. However, most employers, if they are smart, will try to make work available if at all possible. Many employers in Michigan are finding that employee recovery times are shorter and costs lower if they are willing to make some changes to help their employees. This can be as simple as making a change in the person's workstation or finding a new job the person can do. Most company's find that the sooner an employee can get back to the job, the better off everyone is. These are just a few of the numerous questions that pertain to workers' compensation coverage. For more detailed information, please email or call us.
