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Michigan Worker's Compensation Litigation
The Act requires all employers to arrange for the payment of worker’s compensation benefits. This may be accomplished by purchasing insurance from a commercial insurance carrier or by obtaining approved self-insured status.
A worker’s right to medical benefits is not limited in terms of either the cost or duration of the benefits, except that the care being provided must be reasonable. There are, however, limits on what a health care provider may charge for the services provided.
An injured worker may receive benefits starting with the second week of disability. If his disability extends beyond the second week, he will be entitled to receive benefits for the first week as well. Benefits are paid at the rate of 80 percent of the after-tax value of the injured worker's average weekly wage, subject to certain maximums. The injured worker's worker’s compensation benefits will be reduced if he is receiving other benefits, such as group disability insurance or Social Security old-age benefits, or if he remains capable of earning wages, sometimes even if he is not actually earning any. Mr. Doe’s right to disability benefits continues as long as he is disabled—potentially for the rest of his life—provided that the disability remains connected to the work injury.
Disability is defined generally as a limitation of a worker’s wage-earning capacity in work suitable to his or her qualifications and training. The current definition was first enacted in 1987 and was most recently amended in 2011. This standard has historically been the subject of much controversy.
In Michigan, except under certain unusual circumstances, a worker must have a wage loss to be entitled to benefits. Most states provide a payment for a permanent residual disability even if there is no wage loss; Michigan does not.
The amount of benefits he will receive depends on the extent of the limitation in his ability to earn wages.
The injured worker's benefits will be terminated if he refuses a reasonable offer of work or returns to work and establishes a wage-earning capacity. Michigan has very strict laws with regard to the refusal of an offer of employment. If a worker unreasonably refuses any reasonable offer, benefits will be terminated, even if the job offered pays less than the job in which the injury occurred. Of course, the job offered must be within the worker’s limitations. If a worker returns and later leaves a job, whether benefits resume will depend on why he or she left, how long he or she was back to work, and whether the work performed was some specially created job.
What are Michigan Worker's Compensation Survivor Benefits?
In general, a worker’s death is compensable if it was caused by his or her employment. Survivors’ benefits are payable only if the worker is survived by specifically defined dependents. For children, death benefits continue at least until age 16 and, if dependency continues, may last until at least age 18. For other dependents, benefits may continue for 500 weeks following the death. The amount of any benefits paid before death is subtracted from death benefits otherwise owed.
What is a Causal Relationship Under Michigan's Worker's Compensation Law?
For a disability or death to be compensable, there must be some causal relationship between it and the employment.
It is a very old principle of law that a person who causes an injury “takes the victim as he finds him.” This was carried over into worker’s compensation; it was often said that an employer “takes the worker as it finds him” and that disabilities were compensable if the work caused them or contributed to or aggravated a preexisting condition. However, recent changes in the law have narrowed this principle. It is now said that if the case involves a work-related event and a preexisting condition, the new disability is only compensable if it is “medically distinguishable” from the preexisting condition.
Certain disabilities are compensable only if the employment contributed to the disability in a significant manner. This standard applies to “[m]ental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions” and degenerative arthritis. In such cases, the contributions of the work must be significant in comparison to the contributions from all other areas of the person’s life.
What are Occupational Diseases Under Michigan Worker's Compensation Law?
A disability that results from a long series of minor injuries is compensable. What about a disease that is caused by one’s work?
The distinction between an “occupational disease” and an “injury not attributable to a single event” has narrowed over the years, but there are still some areas of difference. The ordinary notion of the difference between disease and injury will yield the correct result in most cases, although the technical definition is more complicated. Silicosis, which is caused by exposure to dust such as is found in foundries or mines, is the prototypical occupational disease. Back injuries are rarely (but sometimes) held to be occupational diseases. The most important factor in determining if a disability is an occupational disease is the degree to which that disability is characteristic of a certain type of industry or employment.
The finding of an occupational disease is especially significant when the disease is one of a subgroup known as dust diseases. To protect the foundry industry from the great financial burden caused by the number of foundry workers suffering from severe lung diseases, the legislature created the Silicosis and Dust Disease Fund. After the employer has paid $25,000 in weekly disability benefits for a dust disease, it may seek reimbursement for any further weekly benefits from this special fund. Over the years, the category of dust diseases has broadened somewhat and is now sometimes interpreted to include asbestos and other similar diseases. In 1982, the legislature expanded the fund to cover certain jobs in the logging industry.
Are There Any Special Types of Disabilities under Michigan Worker's Compensation Law?
In certain cases, the Act provides benefits for a specified number of weeks, even if the injured employee returns to work during that time. These are called specific losses.
For example, if Mary Doe loses a hand, she is entitled to 215 weeks of benefits from the date of that loss. She will receive those benefits whether she returns to her job the next day or is out of work for the entire 215 weeks. At the end of the specific loss period, she may or may not be entitled to continuing benefits, depending on whether she continues to be disabled. Other periods are assigned to various types of losses, including hands, fingers, legs, eyes, etc.
The legislature has also provided for special compensation in certain other circumstances, notably in the case of a worker who suffers the loss of two members of the body. This is referred to as total and permanent disability.
While the loss must be permanent, it is not required that the person be totally disabled in the sense of being unable to work at all. The provision for total and permanent disability does not necessarily provide benefits for those who are the most severely disabled but rather for people who suffer the specified losses.
Workers who are found to be totally and permanently disabled may continue to receive benefits for 800 weeks, whether or not they return to work. In addition, they may receive certain additional or differential benefits, which are paid by the Second Injury Fund rather than by the employer. The amount of these benefits depends on the date of injury and the circumstances of the case. Simply stated, totally and permanently disabled workers may receive some additional compensation as a result of inflation, while most injured workers do not.
The Second Injury Fund was created to encourage the hiring of individuals who have already suffered the loss of one body member. If such a worker loses a second member in the course of employment, the employer is responsible for specific loss benefits for the second member only; the Second Injury Fund assumes responsibility for all other wage loss benefits. Over the years, the fund has been given responsibility for covering many other situations, generally those in which the legislature has felt that a given worker should be entitled to additional benefits but further felt that it would be unfair to require the employer to be responsible for them.
Under Michigan's Worker's Compensation Law, The Injury Must Arise Out Of And Occur During The Course Of Employment
Of course, an injury must arise out of and in the course of employment to be compensable.
If John Doe slips, falls, and breaks his leg while loading a truck for his employer, there is no doubt that he is entitled to compensation. But what if he was on his way to work or on his lunch hour? What if he was on a business trip, but not engaged in business, when he fell? While there is no simple principle that can be applied to all cases, an injury is likely to be compensable if it happens on the employer’s premises or if the employment provided the occasion for the injury. Injuries occurring on the way to or from work are generally not compensable.
The courts have recognized that a certain amount of horseplay is to be expected on any job. Injuries suffered as a result are compensable unless the actions of the worker amount to intentional and willful misconduct.
However, an employer is not responsible under the Act for injuries that occur during primarily recreational or social activities. The employer may be responsible under traditional negligence law.
How To Determine Whether Your Injury Falls Within the Scope of Michigan's Worker's Compensation Act?
The work in which an injury occurred must be covered employment.
Nearly all employed workers in Michigan are covered by the Worker’s Disability Compensation Act. The primary exceptions are employees of the federal government, railroad workers, and workers dealing with ships on navigable waters. The number of workers that an employer has is important in determining whether the employment is covered. So is the question of whether a worker was an employee or an independent contractor. It is not enough that the worker is referred to as an independent contractor or that the parties agree to such a classification; to avoid coverage under the Worker’s Disability Compensation Act, the worker must truly be independent and must meet certain specified criteria.
It is generally assumed that workers want to establish that their injuries come under the Worker’s Disability Compensation Act, but that is not always true.
The Worker’s Compensation Act was enacted as a substitute for a worker’s right to sue his or her employer for damages. Thus, if an injury comes under the Act, worker’s compensation is the exclusive remedy.
The worker may not make any other claim against the employer, even if the injury was the employer’s fault, unless it was the result of an intentional tort. The phrase “intentional tort” has a special meaning in the Act.
However, if it can be established that the injury does not come within the scope of the Act, the worker may bring a suit directly against the employer. In most circumstances, this jurisdictional determination must be made by the Workers’ Compensation Agency.
If it can be proved that someone other than the employer or a co-employee was responsible for the injury, that third party may be sued for civil damages. If the employer has paid worker’s compensation benefits for the injury, it is entitled to reimbursement out of the proceeds of the third-party case. The employer must share, however, in the cost of litigation, including attorney fees.
What Are The Notice And Claim Requirement Under Michigan's Worker's Compensation Law?
In most areas of the law, there is a statute of limitations that prohibits a lawsuit from being started if a specified amount of time has elapsed since the incident occurred. The Michigan Worker’s Disability Compensation Act has no such statute of limitations. There are, however, certain requirements for giving notice and making a timely claim, and certain other limitations may also apply to limit the claimant’s right to benefits.
In most cases a worker may not recover benefits for more than two years back from the date a claim is filed. If compensation has been paid in the past, benefits may be recovered for only one year back.
A worker must give notice of an injury within 90 days and make a claim for benefits within two years. However, the failure to give notice is not a defense for the employer unless it can establish that it was somehow harmed by the lack of notice. However, in a practical sense, failure to give immediate notice of an injury may still affect the outcome of a case. The longer one waits to give notice of an injury, the harder it may become to link the consequences to that injury, and the more likely it is that the worker’s account may be called into question.
There is no corresponding exception to the two-year claim requirement. Neither the notice nor the claim need be in writing. The running of the two-year statute of limitations is tolled for periods of time when the worker might have been led to believe that it was not necessary to make a claim or might have been unable to do so, or when he or she is compensated by a different type of benefit.
What Are the Procedures For Filing a Michigan Worker's Compensation Claim?
Most worker’s compensation cases are resolved without dispute.
However, if there is a dispute, the worker’s compensation system has sole jurisdiction for deciding these disputes. Neither a worker nor an employer may take these cases to the ordinary courts of general jurisdiction, nor is there any right to a trial by jury.
To start a formal action, the worker files an application for mediation or hearing with the Workers’ Compensation Agency. The agency then notifies the employer and the employer’s insurance carrier. Eventually the matter is assigned to and tried before a magistrate—an attorney whose only job is to hear and decide worker’s compensation cases. Magistrates conduct hearings at various locations around the state. However, the agency may first permit or direct mediation of a claim.
It is sometimes over a year from the time the petition for hearing is filed until a trial is held before a magistrate. In most cases, both the worker and the employer are represented by attorneys. While this is not technically required, it is certainly advisable. It is permissible to appear on one’s own without an attorney, but only an attorney can represent someone else.
Agency procedures are fairly formal, although not as formal as the procedures for other court hearings. The rules of evidence do not strictly apply, although they are often used. Most cases are decided based on the testimony of the plaintiff, physicians, and, to an increasing extent, vocational consultants. A medical doctor’s testimony is nearly always taken by deposition, during which the doctor testifies under oath, just as he or she would at trial, but the deposition is held at a more convenient location or time (or even telephonically). His or her testimony is recorded, transcribed by the court reporter, and presented to the magistrate. Sometimes the plaintiff-worker is the only witness to testify at the trial. In other cases a party might call a supervisor or some other witness to testify concerning the injury or the nature of the work. In some cases vocational experts testify concerning the qualifications and training of the worker, although their testimony is most often taken by deposition.
If either party disagrees with the magistrate’s decision, that party may appeal to the Michigan Compensation Appellate Commission. There is no new hearing before the commission; instead, members of the commission read a typed record of the hearing, along with any depositions and exhibits. The commission fully reviews the magistrate’s legal decisions but is limited in its review of factual issues. It must affirm the magistrate if there is competent, material, and substantial evidence to support factual findings. If the magistrate ordered the payment of continuing benefits to the worker, the employer must pay 70 percent of the current benefits while the case is on appeal and must also pay in full ordered medical expenses incurred during the appeal.
There is no automatic appeal from an appellate commission decision. A party may ask the court of appeals, and eventually the Michigan Supreme Court, to review a case but must petition for leave (that is, seek permission) to appeal. Only if such permission is granted is the case actually argued before the appellate court.
If benefits are being paid voluntarily, without an order, the employer may at any time question the worker’s right to continuing benefits. In fact, it can arbitrarily stop paying them. If that happens, the worker may file an application and proceed to a trial. In such a case, no benefits are paid while the parties wait for a trial to be scheduled. On the other hand, if there has been an order directing the payment of benefits, the employer may not stop payment on its own but instead must file a petition to stop, while continuing to pay benefits until a hearing is held.
Employers have a right to require workers who claim disability to be examined by a physician of the employer’s choice. Employers almost always exercise this right in preparation for a trial. In a case in which the payment of benefits has gone on for an extended period of time, the employer will usually require that the worker also periodically submit to an examination. The quality of examining physicians varies a great deal. Some have a reputation for finding workers compensably disabled, while others have the opposite reputation. The biases of physicians who regularly testify in cases are known and often taken into consideration when a decision is made, although there is normally no formal recognition of this fact. Often the greatest weight is given to the testimony of a doctor who happens to be treating the worker and was not chosen by either side’s attorney.
An employer may also send a claimant to a vocational expert for an evaluation of his or her qualifications, training, and experience, which will then be used to determine if there is work available within that claimant’s capacity to obtain and perform. Claimants are often evaluated by vocational experts retained by their own attorneys as well.
How Are Attorney Fees Calculated under Michigan's Worker's Compensation Law?
Attorneys representing employers usually charge a fee based on the hours worked, while those who represent workers charge a contingent percentage fee. With a contingent percentage fee, the fee is a percentage of any amount recovered. If there is no recovery, no fee is charged (unless the parties agreed in advance to a minimum fee of $500). The amount of the fee is governed by administrative rule and statute.
In some cases, a fee may also be recovered on unpaid medical expenses.
What are the Types of Settlements Under Michigan's Worker's Compensation Law?
A large percentage of worker’s compensation cases result in a settlement, known as a redemption, which must be approved by a magistrate after a hearing. If a case is redeemed, the worker receives a single lump-sum payment, and the employer and its insurance carrier are relieved of future liability. Sometimes medical expenses are excepted from the terms of a redemption.
2011 Amendments to Michigan's Worker's Compensation Law
Effective December 19, 2011, the legislature enacted significant changes to the Worker’s Disability Compensation Act, although many of these changes were a response to or codification of prior appellate court decisions. The amendments significantly rewrote the definition of disability to conform to prior caselaw, while also making clear that an employee’s ongoing ability to earn wages could constitute an offset to his or her benefits, whether or not wages were actually earned. On the other hand, a good-faith job search could justify the payment of full benefits to a claimant who theoretically could still work and earn wages.
Only injuries that caused a medically distinguishable condition would be compensable, another codification of prior caselaw.
Employers were given control over injured employees’ medical care for 28 days, rather than the prior 10.
The interest rate on benefits paid pursuant to an award was set at the same rate payable on money judgments in civil courts.
Certain other procedural changes were also enacted, ironically including the elimination of the mediation statute at a time when mediation (or facilitation as it is more commonly called) is becoming an increasingly important part of the process.