Michigan workers compensation requirements decide exactly when you must carry coverage, who counts toward the threshold, and what it costs to skip it. This guide breaks down the Michigan workers compensation requirements in plain English — the employee count that triggers the mandate, who is exempt, the penalty for going without, and how to get covered. All figures are from Michigan sources, verified as of June 2026.
In This Michigan Guide:
Is Workers’ Comp Required in Michigan?
Yes — Michigan requires workers compensation insurance for all private employers who regularly employ 3 or more employees at one time (including part-time), or who employ 1 or more employees for 35 or more hours per week for 13 or more weeks during the preceding 52 weeks, under the Workers Disability Compensation Act of 1969
Michigan Workers’ Comp Requirements at a Glance
Here are the exact Michigan workers compensation requirements every employer should know:
| Employees that trigger the mandate | 1 |
| Which workers count | The mandate triggers at 1 employee if that employee works 35 or more hours per week for 13 or more consecutive weeks during the preceding 52 weeks; it also triggers at 3 employees at any one time regardless of hours (full-time, part-time, and seasonal workers all count toward the 3-employee threshold); agricultural employers have a separate rule requiring coverage when employing 3 or more workers 35 or more hours per week for 13 or more consecutive weeks |
| Who is exempt | Sole proprietors with no employees meeting the threshold; partners in a partnership (the partners themselves are not automatically covered employees); independent contractors; domestic servants employed by a household for fewer than 35 hours per week or fewer than 13 weeks; agricultural employers who do not meet the 3-employee/35-hour/13-week threshold; LLC members and corporate officers who elect exclusion under the rules below |
| Owners & officers | Corporate officers and LLC members are automatically included in coverage but may elect to be excluded if the corporation has 10 or fewer shareholders and the officer owns at least 10 percent of the stock; exclusion requires filing Form WC-338 (Election or Rejection of Coverage) with the Workers Disability Compensation Agency and the insurance carrier; if all employees of a corporation are officers who each own at least 10 percent of stock, the corporation may file Form WC-337 (Notice of Exclusion) to be exempt from coverage requirements entirely; sole proprietors and partners may voluntarily elect coverage but are not required to cover themselves |
| Penalty for going without | Failure to carry required workers compensation insurance is a misdemeanor punishable by a fine of up to 1000 per day of noncompliance, imprisonment for 30 days to 6 months, or both; each day without coverage is treated as a separate offense; the Workers Disability Compensation Agency may petition the court for a stop-work order prohibiting the employer from employing anyone until proper coverage is obtained; an uninsured employer also loses the exclusive-remedy protection and may be sued directly by injured employees for full civil damages |
| Monopolistic state? | No — buy from private carriers |
| State fund | Michigan formerly operated the Michigan Accident Fund as a competitive state fund but it was privatized; there is currently no state-operated fund |
How to Get Workers’ Comp Coverage in Michigan
Michigan employers obtain coverage by purchasing a policy from a private insurance carrier licensed in the state; large financially sound employers may apply to the Workers Disability Compensation Agency to become individual self-insurers or join a group self-insurance program; employers unable to obtain coverage in the voluntary market are placed through the Michigan Workers Compensation Placement Facility (the assigned-risk pool administered by the Compensation Advisory Organization of Michigan)
Private market: YES
What Workers’ Comp Covers in Michigan
Workers’ compensation is a no-fault system: an injured employee gets benefits without having to prove the employer did anything wrong, and in exchange gives up the right to sue for most workplace injuries. A typical Michigan policy pays for medical treatment tied to a work injury, part of the wages lost while the worker recovers, longer-term disability benefits if the injury is permanent, and death benefits to a family.
It also includes employers-liability coverage, which protects the business if an injury still leads to a lawsuit. That trade-off is the practical heart of the Michigan workers compensation requirements: the coverage exists to keep one bad injury from sinking both the worker and the business.
Employees vs. Independent Contractors in Michigan
The most common way owners get the Michigan workers compensation requirements wrong is by assuming a worker is an “independent contractor” who does not count. State agencies look at how the work is actually controlled, not the label on a 1099. If Michigan decides a contractor was really an employee, the business can owe back premiums and penalties as if coverage should have been in place all along.
When you are close to the employee threshold, confirm each worker’s status with your state board before you decide you are exempt.
Other Michigan workers’-comp rules: Michigan uses the Compensation Advisory Organization of Michigan (CAOM) rather than NCCI as its workers compensation rating and classification organization; employers in the construction industry who use subcontractors should verify subcontractor coverage because the general contractor may be liable for injuries to uninsured subcontractors employees under MCL 418.171;
the maximum weekly benefit rate for 2026 is 1201 based on 90 percent of the state average weekly wage; Michigan requires employers to post a notice of workers compensation coverage in a conspicuous workplace location
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Understanding Michigan Workers Compensation Requirements
The Michigan workers compensation requirements exist to make sure injured employees get medical care and lost wages without having to sue. For most owners, the Michigan workers compensation requirements come down to one number: the employee count that triggers the mandate, shown in the table above.
Once you hit that count, Michigan workers compensation requirements apply whether you planned for them or not, and the penalty for going without is real. If any part of the Michigan workers compensation requirements is unclear for your business, your state workers’-comp board can confirm the threshold, the exemptions, and how to get covered.
Next step: Once you know what your business in Michigan actually needs, comparing quotes from several carriers takes only a few minutes. Many owners do this right after they understand their state and trade requirements.
Frequently Asked Questions
Is workers’ comp required in Michigan?
Yes — Michigan requires workers compensation insurance for all private employers who regularly employ 3 or more employees at one time (including part-time), or who employ 1 or more employees for 35 or more hours per week for 13 or more weeks during the preceding 52 weeks, under the Workers Disability Compensation Act of 1969
What is the penalty for not having workers’ comp in Michigan?
Failure to carry required workers compensation insurance is a misdemeanor punishable by a fine of up to 1000 per day of noncompliance, imprisonment for 30 days to 6 months, or both; each day without coverage is treated as a separate offense; the Workers Disability Compensation Agency may petition the court for a stop-work order prohibiting the employer from employing anyone until proper coverage is obtained;
an uninsured employer also loses the exclusive-remedy protection and may be sued directly by injured employees for full civil damages
Who is exempt from Michigan workers’ comp?
Sole proprietors with no employees meeting the threshold; partners in a partnership (the partners themselves are not automatically covered employees); independent contractors; domestic servants employed by a household for fewer than 35 hours per week or fewer than 13 weeks; agricultural employers who do not meet the 3-employee/35-hour/13-week threshold; LLC members and corporate officers who elect exclusion under the rules below
Official Michigan Sources & Resources
- Michigan Workers Disability Compensation Agency (within the Michigan Department of Labor and Economic Opportunity): https://www.michigan.gov/leo/bureaus-agencies/wdca
- Michigan Workers’ Comp Statute: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-418-115
- U.S. Department of Labor — Workers’ Comp: dol.gov
- U.S. Small Business Administration: sba.gov
These Michigan workers compensation requirements were last verified against official sources in June 2026. Rules and penalties change — confirm the current figure with your state workers’-comp board or a licensed agent.
More Michigan Business Insurance Guides
Disclaimer: This guide is informational only and is not insurance, legal, or tax advice. Business Insure Guide is an independent educational resource, not an insurance agency or carrier. Coverage needs, legal requirements, and prices vary by business, profession, and state and change over time. Always verify the exact requirement and price with a licensed insurance agent and your state before you buy.