Workers Compensation Articles What is Workers' Compensation?
What is Workers' Compensation?

Workers' compensation laws in the United States developed during the early 1900s as a result of the industrial age and growing numbers of industrial injuries. Workers' compensation benefits are most commonly provided to workers who are injured by a specific accident on the job, such as the worker who trips and falls down the employer's staircase, or the worker who gets a hand caught in factory machinery. But a compensable accidental injury might also include an occupational disease, such as lung disease that resulted from an employee's exposure to asbestos in the workplace. Workers' compensation law is governed by statutes in every state.

Workers' disability compensation is an employee benefit that has been available to Michigan workers since 1912. Compensation is provided for employees who can demonstrate their disability or death is as a result of a work-related injury or disease. Benefits are paid by the employers (either directly or through their insurance company). These benefits are separate from unemployment compensation, hospital, health or accident insurance. The Department of Labor & Economic Growth, Workers' Compensation Agency provides oversight for workers' disability compensation programs.

Private employers in Michigan who employ three or more workers at one time; or have regularly employed at least one worker for 35 hours or more per week for 13 weeks or longer during the last 52 weeks must have workers' disability compensation coverage, either as a self-insured or through an insurance company.

Employees have the right under the Michigan disability compensation laws to:

  1. Wage loss benefits for the period of the disability, commencing on the 14th day of disability. Specific amounts of compensation will depend on the date and type of injury. Even if an employee returns to work, the employee may be entitled to continued partial wage loss benefits if the job to which they return after injury pays less than they were making before the injury.
  2. Medical care and treatment, commencing immediately.
  3. Vocational rehabilitation, which may include job counseling, guidance, specialized job placement or retraining.
  4. Death benefits: if an employee dies as a result of an injury or work-related disease, the employer is responsible for payment of the reasonable expenses of the employee's last sickness, funeral and burial. Funeral and burial expenses are limited at $6,000 or the actual cost.
  5. Death benefits are payable to the dependents of a deceased employee who died because of a work-related injury or disease.
  6. A Hearing/Mediation/Arbitration: If you disagree with any decision of your employer or the insurance company, you may file an application for hearing before a magistrate at the Workers' Compensation Agency. You may request an application for hearing form from the Workers' Compensation Agency or from the Workers' Compensation Agency website at http://www.michigan.gov/wca. Depending on the kind of dispute involved, you may be entitled to mediation or if your claim is for less than $2,000, your case may be heard in the small claims division of the Board of Magistrates.

Wage loss benefits are based on the employee's average weekly wages at the time of injury and the number of dependents the employee has. Benefits are determined in accordance with a formula in the statute, and a schedule of the maximum benefits that an employee can receive is published annually. There is no minimum amount of benefits. Medical benefits are paid in accordance with a fee schedule adopted as part of the administrative rules for the Workers' Compensation Agency.

The Legislature has also provided that an injured employee may be eligible for unemployment insurance benefits. The Legislature has additionally provided for an offset and workers' disability compensation benefits will be reduced by the amount of unemployment benefits received for the same period.

Employees have responsibilities under the Act as well. An employee must report details of work-related accidents or diseases promptly to the employer, supervisor or other person in charge. Failure to give notice of an accident or injury within three months may result in a loss of rights to compensation. An employee must submit to reasonable and periodic medical examinations if required by the employer or insurance company. An employee must cooperate with reasonable rehabilitation efforts directed toward assisting the employee to return to appropriate competitive employment. An employee must accept a reasonable offer of employment from the previous employer or another employer or through the Unemployment Insurance Agency. If an employee is receiving old age Social Security benefits, pension or retirement benefits or benefits under a wage continuation program, self-insurance program or disability insurance policy paid for by the employer, the employee must report the amounts received as there will be a coordination of these benefits against any wage loss benefits received from the same employer.