Who Needs Workers Compensation Insurance In Michigan? (MI Workers Comp Requirements)

Who Needs Workers Compensation Insurance In Michigan? (MI Workers Comp Requirements)

If you’re a business owner in Michigan, it’s critical to understand when workers compensation insurance is required by law. Whether you run a small contracting company or manage a team of seasonal employees, this coverage is not optional in many cases—and failing to have it could result in steep fines and serious legal consequences.

When Is Workers Comp Insurance Required in Michigan?

Under Michigan law, you’re required to carry workers compensation insurance if any of the following apply:

You have three or more employees at any time during a calendar year.

This includes full-time, part-time, and seasonal workers—not just W-2 employees working 40 hours per week.

You have one employee who works 35 hours or more per week for 13 weeks or longer.

Even if you only have one qualifying worker, this rule applies. It's a common scenario for businesses with long-term part-time or full-time help.

You are an agricultural employer with three or more employees working 35+ hours per week for at least 13 weeks.

Agricultural operations aren't exempt and must follow specific rules tied to hours and employment duration.

📘 For more details, you can refer to this official publication from the State of Michigan Workers' Disability Compensation Agency.

Who Is Not Required to Carry Workers Comp?

There are some exceptions under Michigan’s workers compensation rules:

• Sole proprietors and business partners are not required to carry coverage on themselves.
• However, if these individuals hire employees who meet the thresholds, then they must have coverage for their workers.
• Independent contractors are generally not covered unless they meet the legal criteria of an employee under Michigan law.

Why Workers Comp Insurance Matters

Even beyond legal compliance, workers compensation insurance is one of the smartest protections a business can carry. Here’s why:

• It covers medical bills and lost wages for employees injured on the job.
• It helps protect your business from lawsuits and financial liabilities.
• It shows your employees that you care about their well-being and are committed to a safe work environment.

Failing to carry workers comp when it’s required can lead to hefty fines, stop-work orders, and long-term damage to your reputation.

Final Thoughts: Don’t Risk It

If you're an employer in Michigan and meet any of the criteria above, make sure your business is properly protected. Workers compensation insurance is not just a legal box to check—it's a vital layer of protection for both your employees and your business.

If you’re unsure whether your business needs workers comp coverage or want help setting up the right policy, reach out to a local Michigan-based insurance agent who understands the rules and can help you stay compliant.

Need help reviewing your Michigan workers comp insurance?
Contact us today to make sure your business is protected.