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Workers’ Compensation Insurance Requirements in Michigan
Michigan triggers coverage at 3 employees, or sooner if one worker logs 35+ hours a week for 13+ weeks — Trade Safe helps contractors get compliant before the threshold catches them off guard.
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Workers’ Compensation Insurance Requirements in Michigan
Michigan’s dual-trigger rule catches many small contracting crews by surprise: you can owe coverage well before hitting a headcount of three if a single employee works full-time hours for a sustained stretch. For roofing, electrical, and plumbing crews that ramp up seasonally, tracking this threshold is critical to staying compliant.
Michigan Workers’ Compensation Legal Requirements
Under the Workers’ Disability Compensation Act (WDCA), Michigan employers must carry coverage if they regularly employ 3 or more workers at one time, OR employ just 1 worker for 35+ hours per week for 13+ weeks in the preceding 52 weeks — construction employers follow this same standard.
- Trigger 1: 3 or more employees regularly employed at one time
- Trigger 2: even a single employee working 35+ hours/week for 13+ consecutive weeks in the past year
- Penalties include fines up to $1,000, 30 days to 6 months imprisonment, or both — with each uninsured day treated as a separate offense
- The Workers’ Compensation Agency can also prohibit an uninsured business from employing anyone until coverage is secured
How Michigan’s Workers’ Comp System Works
System type: Private Carrier Market
Michigan is a private-carrier state, with employers purchasing coverage through licensed insurers rather than a monopolistic state fund. The Oregon DCBS 2024 study ranks Michigan 36th of 51 states for overall premium burden, with an index rate at 82% of the national median — putting it among the more affordable states for workers’ comp.
How Michigan’s Rates Compare by Trade
| Trade (NCCI Class Code) | National Rank (of 51) | Rate per $100 of Payroll |
|---|---|---|
| Roofing (Class 5551) | 45th of 51 | $2.76 |
| Electrical Wiring (Class 5190) | 40th of 51 | $1.73 |
| Plumbing NOC (Class 5183) | 28th of 51 | $2.66 |
Source: Oregon Dept. of Consumer and Business Services, 2024 Workers’ Compensation Premium Rate Ranking Study (published June 2025) — the only study benchmarking all 50 states plus DC on a common industry mix.
Filing a Workers’ Comp Claim in Michigan
Injured employees must notify their employer within 90 days of the injury, and the employer must report it to their insurer and the Workers’ Compensation Agency. Wage-loss benefits typically begin after a 7-day waiting period, which is waived retroactively if the disability extends past 14 days.
Penalties for Non-Compliance
Michigan enforces the WDCA (Sections 418-461) with fines up to $1,000, jail time of 30 days to 6 months, and the ability to shut down an uninsured employer’s operations entirely — each day without coverage counts as a separate offense.
Resources: Michigan LEO — Workers’ Disability Compensation Insurance Requirements, Michigan LEO — Employer Insurance Requirement (PDF), Michigan Workers’ Disability Compensation Agency
How Much Does Workers’ Comp Insurance Cost in Michigan?
Michigan ranks among the more affordable states in the Oregon DCBS national study, though rates still vary sharply by trade risk.
| Trade | Estimated Cost per $100 Payroll | What Drives It |
|---|---|---|
| Roofing | $2.76 (per the Oregon study’s Class 5551 rate) | Michigan’s roofing rate is well below the national average, reflecting the state’s overall lower cost index |
| Electrical | $1.73 (per the Oregon study’s Class 5190 rate) | Among the lowest electrical rates nationally per this study |
| Plumbing | $2.66 (per the Oregon study’s Class 5183 rate) | Mid-range risk for tool and jobsite-hazard exposure |
What Moves the Price Up or Down
- Michigan’s overall index (82% of national median) keeps base rates competitive across most trades
- Whether you’re triggered by headcount vs. the 35-hour rule doesn’t change your rate, but affects when coverage must start
- Experience modification factor from prior claims can move your premium up or down substantially
- Seasonal Michigan construction work can create payroll swings that affect total premium owed
Rates above are drawn from the Oregon DCBS 2024 Workers’ Compensation Premium Rate Ranking Study and represent national benchmark class-code rates, not a guaranteed quote. Your actual premium depends on your experience modification factor, claims history, and payroll — get a personalized Trade Safe quote for exact pricing.
Frequently Asked Questions
How many employees trigger workers’ comp in Michigan?
Three or more employed at one time, or as few as one employee working 35+ hours per week for 13+ weeks in the prior 52 weeks.
Do construction contractors in Michigan have different rules?
No — construction employers follow the same 3-employee or 35-hours/13-weeks trigger as other industries under the WDCA.
What’s the penalty for an uninsured Michigan employer?
Fines up to $1,000, 30 days to 6 months in jail, or both, with each day of noncompliance counted as a separate offense.
Can Michigan shut down my business for not having coverage?
Yes — the Workers’ Compensation Agency can prohibit an uninsured employer from having any employees until coverage is obtained.
Workers’ compensation requirements and penalties can change; always verify current rules with the Michigan Workers’ Disability Compensation Agency.
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