Michigan lawyer discusses misclassifying workers in Michigan and how to protect legal rights under workers’ compensation.
We have blogged about this topic on several different occasions. It is a real problem that causes unnecessary suffering for people who get hurt on-the-job. Here is some additional information about employee misclassification in Michigan.
What is employee misclassification?
Employee misclassification occurs when a business deliberately calls an employee an independent contractor. They are paid wages with a 1099 tax form and no income withholding happens.
Why is this distinction important in the workforce?
This is an important distinction because independent contractors are not covered under workers’ compensation in Michigan. If a person gets hurt on-the-job, they are on their own for medical treatment and lost wages.
Michigan law is specific about who is an employee for purposes of workers’ compensation. Services are considered employment when an individual meets the requirements of IRS revenue ruling 87-41. Some factors that must be examined include whether the individual has set-hours of work, must follow instructions, underwent training to perform the job, was paid by the hour, can be fired, was furnished tools and materials, and shared in profits/losses. Additional factors include whether they maintained a separate business, held themselves out and rendered service to the public, and were an employer subject to the Act.
Can you sue for employee misclassification?
A person who is a victim of employee misclassification in Michigan can file an Application for Mediation or Hearing and seek a formal hearing. A state magistrate will decide if they are an independent contractor or employee and can order payment of workers’ compensation benefits.
Employee misclassification statute of limitations
There is no statute of limitations under workers’ compensation in Michigan for employee misclassification. An employee can seek benefits if notice was given within 90 days and claim was made within 2 years. Both can be done verbally so just telling a supervisor is enough. There is a 1 and 2 year back rule that limits past recovery.
Private employers who have 3 or more employees at a time or employed 1 employee for 35 or more hours for 13 or more of the preceding 52 weeks, are required to purchase workers’ compensation insurance. Failing to comply is a crime punishable by up to 6 months jail time and civil penalties of $1,000.
Misclassifying workers can be a dangerous game. Businesses without proper insurance lose the protection of the exclusive remedy provision. They can be sued for pain and suffering damages. Officers and directors of the corporation can also be found personally liable for payment of workers’ compensation benefits.
We have handled many of these workers’ comp cases in Michigan. It is possible to file an Application for Mediation or Hearing with the State of Michigan and seek a determination of rights. Many of these disputed workers’ compensation cases eventually settle for a lump sum cash payment.
Injured at work? Contact our workers’ comp lawyers for a free consultation
If you were injured at work and would like to speak with an experienced workers comp lawyer about your case call us now, or fill out our contact form for a free consultation. There is absolutely no cost or obligation. We’re here for you.
Our attorneys have been exclusively helping injured workers in Michigan for more than 35 years and they can help you better understand Michigan workers comp laws and what happens after someone has been hurt on the job. To see what our own clients have to say about the caring, compassion, and communication they received from us, you can read in their own words about their experience here on our testimonials page from clients we have helped.
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 (844) 316-8033 for a free consultation today.