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Workers' Compensation 101

As you may know, Michigan is considering substantial changes to the state's workers' compensation laws. The new legislative proposals would change the payment structure for benefits and modify what is considered an injury. The new laws would likely make it much more difficult for an injured employee to demonstrate a disability. For a worker who can no longer perform the same job in which they were injured, the new bill would consider whether there was some other theoretical job that the person could perform. That worker's benefits may be adjusted downward even if such theoretical job is not available.

But to fully understand the current system as well as the potential new system, it is important to have a basic understanding of how the workers compensation system operates. Michigan employers must carry workers compensation insurance to cover workplace injuries. On the other side, while workers are covered for workplace accidents this is generally their exclusive remedy and they cannot bring lawsuits against their employers in most situations.

While the employee loses the right to sue their employer in most situations, it may be possible for an injured employer to bring a lawsuit against a third party. This can occur when someone other than the employer is responsible, either in whole or in part, for the workers injury.

The amount of benefits is related to the average weekly wage of the worker. Benefits continue as long as the injury prevents the worker from returning to employment. In some situations where a doctor determines the injuries are sufficiently severe, lifetime benefits may be appropriate.

Despite the 'gotcha' stories that turn up occasionally on the local ten-o'clock news, the actual rates of fraud by workers is thought to be less than two percent, and at least one study indicates that fraud by employers is actually a bigger problem.

Source: Michigan Radio "Five things to know about workers' compensation," Sarah Alvarez, Nov. 10, 2011

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