Michigan Workers’ Compensation Insurance: Requirements, Cost, and How to Get Covered
If you run a business in Michigan, you may be legally required to carry workers’ compensation insurance.
It helps pay for medical care and lost wages if an employee gets hurt at work, and it can reduce your business risk when accidents happen. 📋 Get a Workers’ Comp Quote
📞 Call 248-888-1134
Quick answer: Most Michigan employers need workers’ comp if they have 3+ employees at one time
(including part-time), or if they employ 1+ employees for 35+ hours/week for 13+ weeks
in the past 52 weeks.
If you’re unsure whether your staffing qualifies, it’s worth checking before you hire your next person.
Who Must Have Workers’ Compensation in Michigan?
Michigan’s rules can feel confusing because the requirement depends on how many people you employ and how many hours they work.
In general, you must carry workers’ comp if:
- You have three or more employees at one time (this includes part-time employees), or
- You employed one or more employees for 35+ hours/week for 13 weeks or longer in the preceding 52 weeks.
There are also special categories (like certain agricultural employers and household employers) with their own thresholds.
When in doubt, verify requirements with the state’s workers’ comp resources and get guidance from a licensed agent.
Michigan Workers’ Disability Compensation Agency employer FAQ:
View the criteria
Michigan Workers’ Comp by Industry and Business Type
Many people land on this page because they want a fast answer for their specific type of business.
Here are the most common scenarios we see in Michigan.
Contractors and Construction
If you hire laborers, subcontractors, or helpers, workers’ comp becomes a serious compliance issue quickly.
Even small crews can trigger the requirement. Payroll classification and job duties matter a lot for pricing in construction.
Restaurants, Cafes, and Food Service
Part-time staff still count toward the 3-employee rule. Owners often get surprised here, especially during seasonal hiring.
Cleaning, Janitorial, and Property Services
Job duties can vary widely from office cleaning to heavier physical work. A clean job description and accurate payroll reporting help keep audits from getting messy.
Office-Based Businesses
Lower-risk roles often cost less than hands-on trades, but the legal requirement can still apply once hours and headcount qualify.
Nanny Insurance and Household Employees (Workers’ Compensation)
Workers’ compensation is not just for traditional businesses. In Michigan, families who employ a
A nanny, babysitter, caregiver, or other household employee may also be required to carry workers’ comp.
depending on hours worked and the nature of the job.
This often catches families off guard. If a household employee is injured while working in your home,
Workers’ comp coverage can help pay for medical expenses and lost wages and may reduce the risk of personal liability.
- Coverage rules depend on hours worked and employment status
- Household workers are often misclassified as independent contractors
- Homeowners insurance typically does not replace workers’ comp for on-the-job injuries
For a deeper breakdown of how Michigan handles nanny and household employee coverage,
See our detailed guide:
Do You Need Workers’ Compensation Insurance for Nannies in Michigan?
What If You Can’t Find Coverage Through a Private Carrier?
If private carriers decline you, the Michigan Workers’ Compensation Placement Facility can be a last-resort option.
In many cases, your application must be submitted through a licensed agent.
- Premiums may be higher than private insurance
- Policies are serviced by approved carriers under facility guidelines
- Coverage typically appears under the servicing carrier’s name
If you’ve been declined and need a path forward, this guide may help:
Michigan workers’ comp: what to do if you’re denied coverage
How Much Does Michigan Workers’ Comp Cost?
Michigan workers’ comp pricing depends mainly on payroll, job duties, industry class codes, and your claims history.
Two businesses with the same headcount can pay very different premiums if one has higher-risk work.
Heads up on estimates: “Average cost” tables online can be misleading because workers’ comp is priced off payroll and duties.
not just business size. Use ranges as a starting point, then get a quote based on your actual roles.
| Business Type | Typical Starting Range (Illustrative) |
|---|---|
| Owner only (no employees) | Often low-cost, but depends on whether the owner elects coverage |
| Small business (few staff) | Varies widely based on payroll and job duties |
The fastest way to reduce surprises is to keep employee roles clear (clerical vs. fieldwork), track payroll accurately, and review your policy before renewal.
That helps your audit match what you actually do day-to-day.
When Are Businesses Exempt?
Some Michigan businesses may not meet the thresholds or have owners who qualify for an exclusion. Common examples include
- Businesses with no qualifying employees based on headcount and hours
- Situations where all workers are owners, officers, or partners and qualify for exclusion
Michigan uses the WC-337 Notice of Exclusion for certain exclusions.
Important: the state notes that this form is not available online, and you may need to contact the Compliance & Employer Records Division for eligibility and a copy.
WC-337 information
Penalties for Not Having Workers’ Comp in Michigan
If you’re required to carry coverage and you don’t, Michigan law can treat it as a misdemeanor.
Penalties can include fines up to $1,000 and/or jail time up to 6 months.
Michigan law can treat each uninsured day as a separate offense.
Legal requirements can be fact-specific. If you’re hiring soon, it’s safer to confirm your obligation before payroll starts.
How to Get a Michigan Workers’ Compensation Policy
- Gather basics: business type, FEIN, payroll estimates, job roles, and owner details
- Confirm whether any owners should be included or excluded
- Request quotes based on accurate job duties (this matters for pricing)
- Choose a start date, pay the deposit, and keep payroll records for audit time
🚀 Start Your Workers’ Comp Quote
Michigan Workers’ Compensation FAQs
Who needs workers’ comp insurance in Michigan?
Most private employers must carry workers’ compensation if they employ three or more employees at one time (including part-time).
or 1+ employee who works 35+ hours/week for 13+ weeks in the preceding 52 weeks.
Do part-time employees count toward the requirement?
Yes. Michigan’s “3 employees at one time” threshold includes part-time employees.
Can I buy directly through the Placement Facility?
In many cases, no. The last-resort facility process commonly runs through licensed agents and approved servicing carriers.
What factors affect my premium the most?
Payroll, job duties, industry risk classification, and past claims history. Accurate role descriptions and clean payroll tracking can make a real difference at audit time.
What happens if I don’t carry workers’ comp when required?
Michigan law can impose fines and jail time for noncompliance and may treat each uninsured day as a separate offense.
It’s usually cheaper to get compliant than to recover after a problem.
Do I need workers’ comp for a nanny in Michigan?
Possibly. Michigan law may require workers’ compensation coverage for household employees.
including nannies and caregivers, depending on hours worked and the employment arrangement.
Because the rules can be nuanced, many families confirm requirements before hiring or once hours increase.
Does homeowners insurance cover injuries to a nanny?
In many cases, no. Homeowners policies are not designed to replace workers’ compensation.
Without workers’ comp, families may be personally responsible for medical costs and lost wages
if a household employee is injured on the job.
What if I only employ a nanny part-time?
Part-time status does not automatically eliminate the requirement.
Michigan’s workers’ comp rules focus on hours worked and duration of employment.
not just whether the role is considered “part-time.”
Can a nanny be treated as an independent contractor?
Most nannies and household caregivers are classified as employees, not independent contractors.
Misclassification can create tax and workers’ comp issues if an injury or audit occurs.
Related Resources
- Michigan Workers’ Disability Compensation Agency
- Employer FAQ: coverage requirements
- Denied coverage? Michigan workers’ comp options
- Michigan Basic Insurance Guide
Want a fast, no-pressure quote? Share your payroll estimate and job duties, and we’ll tell you what workers’ comp can look like for your Michigan business.