Workers compensation
4:07 pm
Wed December 14, 2011

Michigan workers' comp: quick facts and possible changes

Potential large-scale changes to Michigan's workers' compensation laws now hinge on a stroke of Governor Rick Snyder's pen.

The Associated Press reports that Snyder "will likely support the bill pending final review."

In case you haven't been keeping up on the issue, here's a list of important facts about workers' compensation in Michigan from Changing Gears Public Insight Analyst, Sarah Alvarez.

We've also highlighted one of the more controversial changes that could take effect should the governor sign off on the bill.

5 things to know about workers' compensation:

  • No right to sue. In exchange for having a workers' compensation system, workers give up the right to sue their employers for injuries except in very rare cases.
  • Fraud.  We've seen the videos of workers comp fraud, but the rates are thought to be very low, around 1 to 2 percent. In every workers' compensation system, if an employee is offered their job back or another job they can do, even for lower pay, they have to take it or risk losing their benefits.
  • How long do benefits last? Injured workers only get workers' compensation benefits for the length of time they are injured. For a worker to get lifetime benefits, an injury needs to be severe and proven by a doctor. Benefits are calculated based on the average weekly earnings of each worker.
  • How often to employers fight claims? Employers always have the right to contest a workers' compensation claim. The state of Michigan says few do. Southfield-based workers' compensation attorney Richard Warsh says in his experience, the majority of injured workers go back to their old jobs within a few weeks.
  • How much does the state pay? State funds are not used to pay injured workers. The state only spends money to administer the system, and to handle disputes over awards between employers and workers.

 

So what are the proposed changes in Michigan's workers' compensation law?

One of the more controversial changes has to with the amount a worker can be compensated.

Workers will be compensated at a rate based on "wage earning capacity."

That means the amount a person on disability could potentially make at another job "whether or not wages are actually earned." Those potential wages could be deducted from a person's compensation.

Republicans who supported the bill say it provides incentives for people to find a job, rather than staying on workers' comp.

Democrats have called the provision the "phantom wages" rule.

The AP reports that some Democrats "say workers could risk losing some benefits if they don't accept alternative jobs once they're partially restored to health, even if the new jobs pay less."

Here's the language from the bill:

"Wage earning capacity" means the wages the employee earns or is capable of earning at a job reasonably available to that employee, whether or not wages are actually earned. For the purposes of establishing a limitation of wage earning capacity, an employee has an affirmative duty to seek work reasonably available to that employee, taking into consideration the limitations from the work-related personal injury or disease. A magistrate may consider good-faith job search efforts to determine whether jobs are reasonably available.

You can check out Sarah Alvarez's story for a more complete discussion of the current workers' compensation system and the implications of the bill, should it become law.

-John Klein Wilson, Michigan Radio Newsroom