Michigan Restaurant Workers' Comp: Rules & Coverage

Michigan restaurants must carry workers’ compensation if they regularly employ three or more people at one time, or fewer than three when even one employee has worked 35 or more hours a week for 13 weeks or longer in the past 52 weeks. Coverage is bought from private insurers, through approved self-insurance, or a group self-insurance fund, since Michigan has no state fund.

This page is for Michigan restaurant, bar, cafe and food truck owners who want a clear picture of the state’s workers’ comp law, what happens if you go without, and how a kitchen’s payroll turns into a premium you can actually manage.

Who Michigan law requires to carry coverage

The rule is in MCL 418.115. A private employer is covered by the Workers’ Disability Compensation Act, and must secure insurance, if it regularly employs three or more employees at one time. The second prong is the one small restaurants miss: an employer with fewer than three workers is still subject to the act if at least one employee has worked 35 or more hours per week for 13 weeks or longer during the preceding 52 weeks. A single full-time line cook or manager who has been on the schedule since spring can be enough.

Part-time servers, dishwashers and hosts count toward the three-employee test when they are on the payroll at the same time. Questions about exemptions for specific people, such as owners or family members, should go to the Workers’ Disability Compensation Agency (WDCA) within the Michigan Department of Labor and Economic Opportunity, which administers the system.

How Michigan’s private-market system works

Michigan is a private-carrier state. Employers meet their obligation by buying a policy from a licensed private insurer, qualifying to self-insure, or joining a group self-insurance fund. There is no competitive or monopolistic state fund to fall back on. Restaurants that cannot find voluntary coverage because of their loss history or a new-venture profile can be placed through the Michigan Workers’ Compensation Placement Facility, the assigned-risk mechanism administered by the Compensation Advisory Organization of Michigan (CAOM). CAOM is also the state’s workers’ comp data-collection and advisory organization.

Standard policies have two parts: Part One pays the medical care and wage-loss benefits Michigan law requires, and Part Two, employer’s liability, responds if an injury leads to a lawsuit against the business that the act does not bar.

Penalties for operating without coverage

Under MCL 418.641, failing to secure workers’ comp is a misdemeanor punishable by a fine of up to one thousand dollars, up to six months in jail, or both, and each day without coverage is a separate offense. An injured employee may also sue the employer in civil court instead of being limited to comp benefits, and corporate officers and directors can be held personally liable for the unpaid obligations.

The injuries behind restaurant comp claims

Burns — fryer and stockpot splashes, dish machine steam and hot sizzle platters.
Cuts — prep knives, meat slicers, broken glassware and box cutters.
Slips and falls — greasy kitchen tile, walk-in cooler floors, and snow and slush tracked in through the back door during Michigan winters.
Lifting and strain — kegs, cases of produce, sacks of flour and full stock pots moved at the end of a double shift.
Repetitive motion — wrists and shoulders of line cooks, bartenders shaking cocktails and staff running registers for hours.
Workplace violence — confrontations with intoxicated or angry customers and late-night robberies.

How a restaurant’s premium is figured

Workers’ comp premium starts with payroll. Each employee’s pay is assigned to a classification that describes the work, and each classification carries a rate that reflects the injury history of similar businesses. Payroll divided into units, multiplied by the rate for that class, gives the starting figure. Businesses large enough to qualify then get an experience modification factor that compares their own claims to what is expected for their size and class mix; fewer and smaller claims pull the mod below average and more claims push it above.

Because the premium is based on estimated payroll, carriers audit after the policy year. If your actual payroll or job mix differed from the estimate, you get a refund or an additional bill, so keep payroll records by job duty and update your agent when you add a location or a catering arm.

Ways Michigan restaurants keep comp costs in check

Put cut-resistant gloves at every slicer and prep station and make their use a rule, not a suggestion.
Use slip-resistant footwear requirements, floor mats at the dish pit and a winter plan for back-door entrances.
Schedule hood, fryer and oil-disposal procedures so hot oil is never carried across a crowded line.
Train on lifting and use dollies or carts for kegs and bulk deliveries.
Report every injury the same day and offer light-duty work so employees return sooner.
Keep accurate payroll by job category so audits match the policy and nothing is misclassified.

Our sister site, USA Workers Comp, goes deeper on workers’ comp basics for employers in many industries.

Quoting workers’ comp with an independent agency

Provident Financial Group compares Michigan workers’ comp from multiple carriers with one application, and we can pair it with your package policy so certificates for landlords and franchisors go out together. Call (866) 964-6660 with your payroll estimate and job list to get started.

Frequently asked questions

Do I need workers’ comp in Michigan if I only have two part-time employees?

Usually not, unless one of them has worked 35 or more hours a week for 13 weeks or longer in the past 52 weeks. Once either condition is met, coverage is required.

Can a Michigan restaurant buy workers’ comp from the state?

No. Michigan has no state fund. You buy from a private insurer, self-insure if approved, join a group fund, or use the assigned-risk placement facility if the voluntary market declines you.

What happens if an employee is hurt and I have no coverage?

You face misdemeanor penalties that accrue daily, and the employee can sue you in civil court; corporate officers may be personally liable.

Why did my workers’ comp bill go up after the audit?

The audit replaces estimated payroll with actual payroll. If you paid more wages than projected or shifted people into higher-rated duties, the premium is adjusted upward.

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Restaurant Workers’ Compensation in Michigan