Is workers comp required in Michigan?
Michigan generally requires coverage for employers with three or more employees at one time, or with at least one employee who works a substantial schedule over a sustained period. Owners, partners and corporate officers are treated under their own rules, and some workers such as certain agricultural or domestic employees may be handled differently.
Buying coverage in Michigan
Michigan employers buy workers comp from private insurance companies, and businesses that are hard to place can obtain coverage through the state's residual market or a state-chartered carrier where one exists.
Who sets the rules
The Michigan Workers' Disability Compensation Agency oversees workers comp in Michigan. Classifications and loss costs in Michigan come from the Compensation Advisory Organization of Michigan (CAOM), an independent rating organization, so codes and rules can differ from NCCI states.
What Michigan employers should know
- Auto manufacturing suppliers in Michigan often face strict contract requirements for employers liability limits.
- Michigan's rating advisory organization sets classifications, so national class descriptions may not match exactly.
Michigan facts employers ask about
Michigan's Workers' Disability Compensation Agency, part of the Department of Labor and Economic Opportunity, administers the system. Coverage is required if a business has three or more employees at one time, or if it has employed at least one person for 35 or more hours a week for 13 weeks or longer during the preceding 52 weeks. Public employers must always carry it.
Michigan's rating organization is the Compensation Advisory Organization of Michigan (CAOM), which maintains the classifications and advisory loss costs carriers use, so codes and rules differ from NCCI states. Employers that cannot get voluntary coverage can apply to the Michigan Workers' Compensation Placement Facility.
Because the 35-hour, 13-week test can be met by a single full-time employee, growing businesses often become subject to the law earlier than they expect. The Agency can investigate uninsured employers and impose fines, and an uninsured employer is liable for claims directly.
Sources: Michigan Workers' Disability Compensation Agency; CAOM. Rules change; confirm current requirements with the agency before you rely on them.
How premiums are calculated
As in most states, MI premium is generally the class code rate per $100 of payroll, adjusted by any experience modification, credits and state charges. The final amount is confirmed by a payroll audit after the policy period. Learn more about how workers comp rates work and preparing for an audit.
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Michigan workers comp FAQ
Is workers comp required in Michigan?
Michigan generally requires coverage for employers with three or more employees at one time, or with at least one employee who works a substantial schedule over a sustained period. Rules and exceptions change, so confirm your situation with the state agency or an agent.
Who oversees workers comp in Michigan?
The Michigan Workers' Disability Compensation Agency administers the workers compensation system in Michigan.
Can I buy Michigan workers comp from a private insurer?
Yes. Private insurers write workers comp in Michigan, and a market of last resort is available for businesses that are hard to place.
How is workers comp priced in Michigan?
Classifications and loss costs in Michigan come from the Compensation Advisory Organization of Michigan (CAOM), an independent rating organization, so codes and rules can differ from NCCI states. As in most states, MI premium is generally the class code rate per $100 of payroll, adjusted by any experience modification, credits and state charges. The final amount is confirmed by a payroll audit after the policy period.