FAQs

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West-Michigan
Since 1979
 

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MICHIGAN

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INTRODUCTION
 

What is workers' compensation?   Workers' compensation is the system used to provide wage replacement, medical and rehabilitation benefits to men and women who are injured while at work.

COVERAGE UNDER THE ACT
 

Who is covered by the Workers' Disability Compensation Act?   Nearly all employers in Michigan are covered by workers' compensation.  This includes both public and private employers.  In fact, when talking about workers' compensation, it is easier to discuss the exceptions.  There are a few classes of workers who are covered by federal laws and are not covered by the Workers' Disability Compensation Act of Michigan.  Employees of the federal government (such as postal workers, employees at a veterans administration hospital, or members of the armed forces) are covered by federal laws.  People who work on interstate railroads are covered by the Federal Employers Liability Act.  Seamen on navigable waters are covered by the Merchant Marine Act of 1920, and people loading and unloading vessels are covered by the Longshoremen's and Harbor Workers' Compensation Act.  Virtually all other workers and employers are subject to Michigan's Law. Certain very small employers are exempt.  If a private employer has three or more employees at any one time, or employs one or more workers for 35 or more hours per week for 13 or more weeks, the employer is subject to the Workers' Disability Compensation Act.  (Section 115)

COVERAGE
 

	When and where are workers covered?   Of course, to be compensable the injury must happen at work.  Workers' compensation is designed to cover only injuries which "arise out of and in the course of the employment."  In the majority of cases it is obvious whether an injury happened at work.  There are, however, many times when this becomes questionable.
	Is a worker covered when he or she is traveling?   Generally speaking, if a worker is injured on the way to or from work, he or she is not covered.  If, however, the worker is on the employer's premises when injured, then he or she is covered. If a job requires a person to travel, he or she is covered while traveling.  However, if the worker "deviates" from the business travel, he or she may not be covered.
	Is everything that happens at work covered?   The courts have recognized that a  certain amount of "horseplay" is to be expected on most jobs and that if a worker is injured as a result of such horseplay, that injury is compensable.  The courts have also held, however, that there is a limit to this situation.  If the worker is injured as a result of his or her "intentional willful misconduct," he or she is not entitled to benefits.  The courts have held that if an injury results from a violation of a rule, which is clearly announced and regularly enforced by the employer, the worker is not entitled to workers' compensation benefits.

CIVIL LAWSUITS
 

Can a worker sue for damages other than workers' compensation?   An individual injured at work can only receive workers' compensation benefits and cannot sue for other damages.  This is provided for in Section 131 of the Act.  There are a few exceptions to this rule.

When can a worker sue his or her own employer?   Intentional torts Section 131(1) provides that an "intentional tort" is an exception.  This means that if an employer deliberately takes an action that is specifically intended to injure a worker, the worker can sue the employer.   Suits based on contract or other statutes There are other laws that give workers a right to sue their employers.  These include Civil Rights statutes, labor laws, and other similar Acts.  The workers' compensation law does not deprive a worker of the right to sue under those circumstances.  Workers may also have a right to sue their employer if there was a contract between them which the employer breached. Generally under these circumstances the worker is not suing as a result of a "personal injury or occupational disease."  It is lawsuits based on an injury or a disease that the Workers' Disability Compensation Act prohibits.   Uninsured employers Section 641(2) of the Act provides that if an employer is covered by the Act but fails to provide security for workers' compensation, a worker who is injured on the job may sue that employer for civil damages.   Retaliation Section 301(11) of the Workers' Disability Compensation Act provides that an employer cannot discriminate against an employee because the employee exercised his or her rights under the Workers' Disability Compensation Act.

DISABILITY
 

	Who is entitled to receive disability benefits?   Sections 301(4) and 401(1) of the Workers' Disability Compensation Act state: As used in this chapter, "disability" means a limitation of an employee's wage earning capacity in work suitable to his or her qualifications and training resulting from a personal injury or work related disease.  The establishment of disability does not create a presumption of wage loss. In order to receive benefits, a worker must be "disabled" as defined above.  However, the fact that a worker is disabled is not enough to obtain benefits.  In addition to being disabled, the injury or disability must be work-related and there must be a wage loss.  Benefits can also be denied if the worker has refused a reasonable offer of employment or has established a wage-earning capacity. Section 373 of the Act contains a special definition of disability for retirees.  It makes it harder for a retiree to obtain benefits.  A person is considered a "retiree" if he or she is receiving a pension or retirement benefit (but not a disability pension) that was paid for by the employer.  To be disabled, a retiree must prove that he or she is unable "to perform work suitable to the employee's qualifications, including training or experience."
	Must the work cause the injury?   Yes the work must "cause" the disability.  If John Doe simply comes down with the flue while on the job, he is probably not entitled to workers' compensation benefits.  The work must somehow be the cause of the disability.
	What if the work is only one of the causes of an injury?   The work does not have to be the only cause.  It is enough if the work causes, contributes to, or aggravates a condition which results in disability.  Some of us can lift 200 pounds without any difficulty.  Some of us, however, would severely hurt our back if we lifted 100 pounds.  The law does not make this distinction.  If a person does something at work that causes him or her to become disabled, the worker is entitled to benefits.  It does not matter if there was some pre-existing weakness or if the worker was born with some condition that made him or her more susceptible to injury.  This is an old principle of law that has been applied by the courts to all kinds of damage actions, including workers' compensation. There are some special rules for certain conditions.  In cases of heart disease, mental disabilities, and conditions of the aging process, the worker must prove that the employment aggravated or accelerated the condition in a significant manner.  In cases of mental disability, the condition must be caused by actual events of employment.  A worker is not entitled to benefits if he or she simply imagined something at work which caused the disability.

DEATH BENEFITS
 

Are death claims treated the same as disability claims?   Generally, the same principles apply to death cases.  The issues outlined in the "Disability" sections of the Act regarding when and where workers are covered by workers' compensation apply to death cases.  In general, the question of causation is treated the same in death cases as in disability cases.  A major difference is that in death cases there must be a dependent in order to receive wage loss benefits.  It sometimes happens that a childless, unmarried worker is killed on the job leaving no dependents.  In that case, his or her estate receives a burial allowance not to exceed $6,000.

SPECIAL BENEFITS
 

What are "specific loss" benefits?   Section 361 of the Act provides for compensation for certain specific losses.  For example, if John Doe loses his thumb while on the job, he is entitled to 65 weeks of compensation benefits regardless of whether he is disabled and regardless of whether he has a wage loss. If John Doe recovers and returns to work after two weeks, he still continues to receive benefits for the remaining 63 weeks.  Assume that John Doe was a skilled watchmaker and is unable to return to work at the end of 65 weeks or assume that he is an ordinary laborer but suffers an infection in his amputation and is unable to work at the end of 65 weeks.  Under those circumstances, his situation at the end of 65 weeks is evaluated in the same way as any other "general disability."  If he is disabled, has a wage loss, has not refused a reasonable offer of work, and has not established a wage-earning capacity, he will continue to receive benefits. Generally speaking, the amount of benefits paid is calculated in the same way as for any other injury.  The exception is that Section 356(3) of the Act provides a minimum rate of 25 percent of the state average weekly wage for a specific loss.  Thus a worker with a very low wage could receive benefits higher than 80 percent of the after-tax value of his or her average weekly wage.

WAGE-LOSS BENEFITS
 

	What benefits can a worker receive?   ... the workers' compensation law provides a strict limit on the benefits that an individual can receive as the result of a job-related injury.  A worker can only receive certain specified (1) wage loss benefits, (2) medical benefits, and (3) rehabilitation benefits.  Each of those benefits will be discussed in the following sections.
	How are wage-loss benefits calculated?   In the ordinary case a worker receives 80 percent of the after-tax value of his or her wage loss.  It does not matter whether the worker is "totally" or "partially" disabled.  Benefits are based on the wage loss and set at 80 percent of the after-tax value of the loss.  (Total and permanent disability is a special category.) Thus, if Jane Smith is unable to work, a determination would be made of her "average weekly wage" before her injury and she would be paid benefits equal to 80 percent of the after-tax value of that amount.  If she returned to work and because of her injury received wages less than her average weekly wage, she would receive benefits equal to 80 percent of the after-tax value of the difference. Prior to 1982 the basic rate of benefits was two-thirds of the worker's gross average weekly wages rather than 80 percent of the after-tax value of his or her wages.  When this law changed, it was also provided that if the two-thirds formula subject to the 1981 maximum limitation would result in a higher rate, the worker is entitled to receive that rate.  The tables published by the bureau for calculating the compensation rate indicate when this situation applies.
	Are fringe benefits included?   Under certain circumstances the value of fringe benefits may be included in determining the average weekly wage.  "Fringe benefits" include things such as the cost of health insurance, employer contributions to a pension plan, and vacation and holiday pay.  Sometimes when a worker is injured, the company continues to provide fringe benefits.  There is nothing in the law that requires the company to do this. However, if benefits are not continued, the worker has suffered a greater loss of income.  The value of fringe benefits that are not continued is added to the value of the cash wages to determine the worker's average weekly wage.  There is a limit, however.  Fringe benefits cannot be used to raise the benefit to more than two-thirds of the state average weekly wage.
	Is there a penalty for the illegal employment of minors?   Section 161(1)(b) provides that if an illegally employed minor is injured, he or she is entitled to double compensation.  This does not apply if the minor fraudulently uses permits or certificates of age in order to obtain the job.
	What if a worker is employed on more than one job?   If a worker is employed by more than one employer at the time of injury, the earnings from both employers are added together to calculate the average weekly wage.  The worker's benefits are based on the total wages from all employments.  If the job in which the worker was injured accounts for more than 80 percent of the worker's wages, that employer is responsible for all the benefits owing.  If, however, that employer was responsible for less than 80 percent of the worker's wages, it pays the entire benefits, but is reimbursed a proportional amount by the Second Injury Fund.

MEDICAL BENEFITS
 

What medical benefits is a worker entitled to receive?   Section 315 of the Workers' Disability Compensation Act provides that a worker is entitled to all reasonable and necessary medical care.  This includes medical, surgical, and hospital services, dental services, crutches, hearing apparatus, chiropractic treatment and nursing care.  The responsibility to provide medical care continues indefinitely so long as the need for the care is related to the industrial injury.

How is the doctor chosen?   During the first ten days of treatment the employer has the right to choose the doctor.  After that the worker is free to change doctors if he or she so desires.  The worker, however, must notify the employer of the change. In practice, many large employers have company doctors.  The worker ordinarily seeks treatment from the company doctor first.  If the assistance of a specialist is necessary, the company doctor refers the worker to such a specialist.  Small employers, on the other hand, often tell their workers that they should go to their family doctor or some other physician in the community.

VOCATIONAL REHABILITATION BENEFITS
 

What rights does a worker have to vocational rehabilitation?   Section 319 of the Act provides that a worker has a right to vocational rehabilitation benefits.  Vocational rehabilitation can include a whole variety of things.  It might simply mean that the employer makes some minor change in the worker's job station so that he or she can return to the work in spite of some continuing problem.  It might mean that an outside rehabilitation counselor will work with the employer and the employee to aid in a return to work at the same job or a similar job with the same employer. It might mean that a vocational rehabilitation agency, either a state agency or private agency, will help the worker find a job with some other employer. It might involve short-term training to help the worker find a new job or in some unusual circumstances, long-term re-education.  In the appropriate circumstance an employer can be required to provide up to two years of vocational rehabilitation services.

PROCEDURES
 

	In what way is a worker required to give notice of an injury or make a claim for benefits?   Whenever a worker is injured on the job, he or she should immediately report the injury to the immediate supervisor.  If a problem does not result from a single event but instead results from an exposure over a long period of time, the worker should report the injury as soon as he or she knows there is a problem that may be related to the work. The law does not require that either notice or claim be in writing.  However, most employers provide forms upon which to report an accident or injury.  Workers should use such forms.  The failure to report an injury in writing will not in itself mean that the worker is not entitled to compensation.  However, if there is any doubt about the situation, it will be much easier for the worker to prove that he or she report the injury (and that the injury happened) if a written report is made and if the worker keeps a copy of the report. Section 381 of the Act requires that the employee give his or her employer notice of an injury within 90 days after the injury or within 90 days after the employee knew or should known of the injury.  If the worker fails to give such notice, however, the employer does not escape responsibility unless it can show that it was somehow harmed by the worker's failure to give notice. Section 381 also requires that a worker must make a claim for compensation benefits within two years after the injury.  The claim to the employer need not be in writing, but as discussed above, there are good reasons why it should be.  In the vast majority of cases, the claim is made with the employer.  The law, however, does provide the alternative that a worker can make a claim by filing it in writing with the bureau on a form available from the bureau.
	What other time limitations apply?   Circumstances can arise under which a worker has given the proper notice and made a proper claim but for various reasons benefits were not paid.  Sometimes many years go by before a worker files an application for hearing.  Section 381(2) provides that in those cases the worker cannot receive past due benefits for more than two years back from the date he or she filed an application for hearing. Section 833(1) deals with the situation in which a worker receives benefits which are then stopped and the worker later files an application for hearing to have benefits started again.  Ordinarily a worker would do this shortly after benefits were stopped.  Sometimes, however, this is delayed for a long period of time.  Section 833(1) provides that under these circumstances the employer cannot be ordered to pay benefits for more than one year back from the date the application is filed with the bureau. Sometimes, for various reasons, an employer pays a worker more benefits then he or she is entitled to.  Under those circumstances the employer has a right to recover that overpayment from the worker.  Usually this is done by reducing future benefits by a specified amount until the overpayment is recovered. Section 833 provides that the employer cannot recover for an overpayment which was made more than one year prior to the date it takes action to recover that overpayment.
	When can a worker get a "settlement" of his or her workers' compensation claim?   Workers' compensation benefits are ordinarily paid on a weekly basis.  There are a number of circumstances, however, under which workers can receive a payment of benefits in a single lump sum. When an employer has denied benefits and a case is eventually decided in favor of the worker, the worker is usually entitled to receive a large payment for past due benefits.  Under these circumstances the worker receives a large lump sum payment but it is not in any way a "settlement" of the case. Under the circumstances described above, the worker keeps his or her right to file a new claim if he or she has additional trouble in the future.  In other words, if the worker has more medical bills or another period of disability involving that same injury, the claim can be reopened. Sometimes cases are settled by a redemption.  If a case is redeemed, the worker receives a single, lump sum payment from the employer and in return gives up all of his or her future rights to workers' compensation benefits.  Redemption are valid only if they are approved by a magistrate after a formal hearing.  At such a hearing papers are prepared that show exactly how much the settlement will be, where the monies will go and how much the worker will receive.  The case and reasons for the settlement are then explained to the magistrate by the parties.  The magistrate makes certain that the worker understands his or her rights.  Only then will a magistrate approve such a redemption settlement. If an employer is represented by an insurance company, it must be notified of any proposed redemption at least ten days before the hearing.  It has a right to come to the hearing and object to the settlement.
	How are attorney fees calculated?   Workers are usually represented by attorneys who are paid on the basis of a contingent percentage fee.  The worker is not ordinarily required to pay any fee or monies when he or she hires the attorney.  Instead the attorney agrees to accept as his or her fee a percentage of the amount the attorney recovers for the worker.  If there is no recovery, the attorney does not receive any fee. Ordinarily the attorney will pay the costs of preparing the case for trial.  This often involves a considerable amount of money to pay doctors for reports and examinations and to pay court reporters.  If there is a recovery of money for the worker, this amount is deducted first to reimburse the attorney for the monies he or she has paid out.  Then the attorney charges a percentage fee on the remaining amount of money that is recovered.  The attorney is allowed to base the fee on all workers' compensation benefits that have been recovered for the worker up to the time the case is concluded.  The attorney is not permitted to charge a fee on benefits that are paid in the future. For example, if a worker has three months of benefits owing at the time he goes to see the attorney, the attorney files a petition, takes medical testimony, attends a mediation or a pretrial, and eventually takes part in a trial, one year might go by between the time the case is filed and the time of trial.  At this point there would be 15 months of benefits payable.  If the worker is completely successful, the magistrate would order the payment of those 15 months of past due benefits plus benefits indefinitely in the future.  The attorney would base his or her fee on the 15 months of past due benefits. If there was an appeal to the Appellate Commission, this might take another year.  During the time of the appeal the worker would receive 70 percent of the benefits ordered by the magistrate.  If the worker wins, at the time the case is concluded the attorney is entitled to charge a fee based on all of the benefits owing up to that date.  This includes the 70 percent benefits that the worker received while the case was on appeal. If the worker wins the case as the result of a trial and/or an appeal, or if benefits are paid as the result of a voluntary payment, the attorney is entitled to charge a maximum fee of 30 percent of the benefits received.  The maximum attorney fee, however, cannot be based upon a rate of benefits that is higher than two-thirds of the state average weekly wage.  This means that if the worker is receiving the maximum benefit which would be 90 percent of the state average weekly wage, the attorney must calculate his or her fee as if the worker was only receiving an amount equal to two-thirds of the state average weekly wage. If the case is resolved through a redemption settlement, the amount paid in a lump sum is usually higher.  This is because a redemption settlement usually involves some payment for the future.  Accordingly, lawyers are limited to smaller fees in those cases.  If the case is settled before a trial is completed, the fee is limited to 15 percent of the amount of the settlement if it is for less than $25,000.  If the settlement is for more than $25,000, the maximum fee is 15 percent of the first $25,000 and 10 percent of the amount over that.  If a trial has been held and completed and the case is later settled through a redemption, the attorney is entitled to a fee of 20 percent. In redemption, the magistrate will examine a statement of the fees provided by the attorney.  In any case, the director of the Bureau of Workers' Disability Compensation has the authority to review any disputes concerning attorney fees.