Warning for employers who try to game the system by calling everyone who does work for them an independent contractor
We are not the law firm you want to see when a person gets hurt at your business. It does not matter if you call them an “independent contractor” and pay them with an IRS Form 1099. Michigan law specifically defines who is an employee and if workers’ comp insurance is mandatory. According to the law if anyone is working for your home or business more than 35 hours per week than you probably need insurance.
Michigan law is specific about who is an employee for purposes of workers’ comp. Services are considered “employment” when an individual meets the requirements of IRS Revenue Ruling 87-41. This 20-factor test looks at items such as hours, control, furnishing of tools and materials, or shared profits and losses. If your business has anyone who qualifies under this test then you are going to need insurance.
Additional items that may be considered include whether the person maintained a separate business, held themselves out and rendered service to the public, and were an employer themselves subject to the WDCA. Do You may not need insurance if the person working for you has their own separate business.
Do I need workers' comp if I have no employees in Michigan?
In Michigan, businesses with no employees are generally not subject to workers’ comp law. However, it is possible that an independent contractor might be found to be an employee. This could lead to significant financial obligations if workers’ comp benefits must be paid.
In Michigan, businesses are required to have workers’ comp insurance when they regularly employ 3 or more people at one time and/or employee 1 person for 35 hours or more per week for 13 weeks or longer during the last 52 weeks.
Businesses who fail to purchase mandatory workers’ comp insurance are still responsible for payment of benefits. Officers and directors of the company are personally liable. Penalties include civil fines and possible jail sentences as a criminal misdemeanor.
In Michigan, employers think they don't need workers' comp insurance because they think they don't have any staff but according to employee misclassifcation, they do need insurance. Employee misclassification is serious issue, and business are wise to follow the applicable law. We have seen some business go bankrupt because they were unable to pay a relatively small workers’ comp claim.
It is also possible to purchase work injury insurance to cover yourself as a business owner. This could be important if a workplace accident occurs, and you need medical treatment or become unable to work. We recommend speaking to an insurance agent to find out about coverage options.
Have questions? Contact our Michigan workers' comp lawyers now
If you have questions on whether or not you need workers' comp insurance in Michigan if you do not have any employees, call now at (855) 221-2667 or fill out our contact form for a free consultation with an experienced lawyer. There is absolutely no cost or obligation. We're here to help.
For more than 40 years, our lawyers have been helping people like you who have suffered from on-the-job injuries in Michigan. We understand the physical, emotional, and psychological hardships you are experiencing from your accident. We also have the skill, experience, and know-how to protect you and get you the best possible payout amount for your case.
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.
Remember, every work injury claim is different and must be negotiated on its own merits. Do not accept any payout amount without fully understanding your legal rights.
Michigan Workers’ Comp Lawyers law firm has consistently secured the largest settlements in the state and is the best choice for your case. We never charge a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 40 years. Call (855) 221-2667 for a free consultation today.
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