How many employees before you need workers comp insurance in Michigan?

Warning for Michigan employers who fail to purchase required workers comp insurance.

A childhood friend is a small business owner doing property management and leasing. He was recently contacted about workers comp insurance and did not know how to respond. Workers comp insurance was something he never even thought about.

Does he really need workers comp insurance if no full-time employees? Are there penalties for not purchasing this coverage? What does he need to know to protect himself?

Here is some info about Michigan law that was passed along to him. Remember, it is best to speak to a legal professional about your own individual situation.

Numerical test

Private employers who regularly employ 3 or more people must purchase workers comp insurance.

Private employers who employ less than 3 people, if at least 1 has been employed for 35 or more hours per week for 13 weeks or longer during the last 52 weeks, must also purchase workers comp insurance.

Households employing domestic help if they employ anyone 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks.


Not having required workers comp insurance is considered a misdemeanor. Penalties include a fine of $1,000 and possible imprisonment up to 6 months. Each day’s failure is a separate offense.

Payment of workers comp benefits is still required even if no workers comp insurance exists. If the employer is a corporation, officers and directors are personally liable for any portion of the obligation not paid.

The employer also gives up the protection of the exclusive remedy provision and can be sued for its negligence. This would include additional damages such as pain and suffering. What started as a small insurance claim becomes a major lawsuit.

Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (855) 221-2667 for a free consultation today.

Related information:

More confusion regarding independent contractors

Photos courtesy of Creative Commons, by free pictures of money.

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