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Michigan court redefines "employee" for workers' comp statute

In December 2013, a special panel of the Michigan Court of Appeals changed the test for determining who counts as an employee for the purposes of the state's workers' compensation statute.
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    January 18, 2014 /24-7PressRelease/ -- Michigan court redefines "employee" for workers' comp statute

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Workers' compensation statutes are designed to protect workers who are injured on the job, making it easier for them to pay for their medical care and other associated expenses without having to bring a lawsuit against their employers. In exchange for giving up the right to sue employers for negligence, injured workers need not prove their employers were at fault in order to recover workers' compensation benefits. These benefits are limited to employees, however; independent contractors do not qualify for workers' compensation benefits.

One of the areas of dispute that often arises in workers' compensation claims is whether a claimant is an employee or an independent contractor. In December 2013, a special panel of the Michigan Court of Appeals issued a decision in Auto-Owners Insurance Co. v. All Star Lawn Specialists Plus that changed the test for determining who counts as an employee for the purposes of the state's workers' compensation statute.

Employees under Michigan law

In the case before the court, a lawn care worker was injured after a leaf blower that he was operating tipped over. The man filed for workers' compensation benefits and sought further compensation under the company's general liability and no-fault auto policies. The company denied the man workers' compensation benefits, arguing that under Michigan law the man was an independent contractor.

The long-standing test for whether a worker was an independent contractor was whether:
-The worker maintains a separate business,
-The worker holds him or herself out as providing services to the public, and
-The worker is an employer subject to statue.

If a worker met any of the three criteria, courts considered the worker an independent contractor. The court in this case, however, held that a worker needed to meet all three criteria in order to be an independent contractor, given the fact that the test used the word "and" when listing the criteria. The court held that the worker in this case only met two of the prongs of the test, so he was an employee and qualified for workers' compensation benefits.

Impact of ruling

The court's decision is likely to have wide-reaching impact for injuries that occurred prior to January 1, 2013. More workers are likely to be considered employees and have the protection of workers' compensation benefits.

Michigan amended it workers' compensation statute so that independent contractor status will be determined by a 20-factor test used by the Internal Revenue Service for injuries occurring after January 1, 2013.

Seek the help of a lawyer

Workers' compensation laws are supposed to protect employees. However, many employers deny claims in an effort to avoid paying workers the benefits to which the workers are entitled. Employers have an obligation to provide such benefits, however. If you have been injured on the job and have questions about workers' compensation benefits, speak with a seasoned workers' compensation attorney with a history of successfully helping workers obtain compensation for on-the-job injuries.

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