Michigan Workers’ Compensation: What Employers Need to Know (Quick Summary Included)

Quick Summary: In Michigan, most businesses with one or more employees are required by law to carry workers’ compensation insurance. This includes full-time, part-time, and seasonal workers. If your business has three or more employees at any time —even family members—you must have coverage. Failure to carry workers’ comp can lead to steep penalties, fines, and personal liability.

At Family Auto Insurance Agency in Detroit, MI, we help small businesses understand and secure the proper workers’ compensation coverage. You can learn more or request a quote here: https://www.familyautoagency.com/workers-compensation.

Who Needs Workers’ Compensation Insurance in Michigan?

Michigan’s Workers’ Disability Compensation Act requires most employers to carry workers’ comp. You must have coverage if your business meets any of the following:

• You employ one or more workers for 35 hours or more per week for 13 weeks or longer.
• You employ three or more workers at any time(full-time or part-time).
• You are a public employer (city, county, state, etc.).
• You are a construction business that hires workers, regardless of how many employees you have.

Independent contractors may still legally be considered employees depending on how the work is controlled, so it’s important to review each work relationship carefully.

What Does Workers’ Comp Cover?

Workers’ comp protects both the employee and the business by covering:

• Medical expenses related to a work injury
• Wage replacement while the employee recovers
• Long-term disability benefits
• Rehabilitation services
• Death benefits for surviving dependents

Without coverage, the employer becomes fully responsible for these costs out of pocket.

How Much Does Workers’ Comp Cost in Michigan?

Premiums vary based on several factors, including:

• Your industry and risk level (e.g., retail vs. construction)
• Number of employees
• Annual payroll
• Claims history
• Safety programs you have in place

At Family Auto Insurance Agency, we compare multiple carriers to help Detroit-area businesses find an affordable policy that meets state requirements.

Penalties for Not Carrying Workers’ Compensation Insurance

Michigan takes non-compliance seriously. If you operate without required coverage, you could face:

• Civil fines up to $1,000 per day of non-compliance
• Criminal penalties including misdemeanor charges
• Personal liability for all injury-related medical and wage costs
• Lawsuits from injured employees
• Business shutdown orders

In other words—going without workers' comp can cost far more than the premium.

Get Help From a Local Detroit Insurance Agency

Since 2012, Family Auto Insurance Agency has helped small and mid-sized businesses across Detroit, Lincoln Park, Downriver, and all of Michigan stay compliant with workers’ compensation laws.

If you're unsure whether your business needs coverage or you're ready to compare quotes, visit: https://www.familyautoagency.com/workers-compensation

We’re here to make the process simple, affordable, and stress‑free.