Below is a link to document that was prepared by the Senate staff for use by the Senate in its deliberations. It summarizes changes to the Worker's Compensation Act. The Act took immediate effect on December 19, 2011.
Snyder signs bills to update workers' comp, unemployment insurance systems
Monday, Dec. 19, 2011
LANSING, Mich. - Gov. Rick Snyder today signed legislation strengthening the state's Unemployment Insurance program and updating workers' compensation laws.
"These bills are critical to our reinvention of Michigan," Snyder said. "Modernizing our unemployment insurance and workers' compensation systems will ensure their solvency and integrity."
House Bill 5002, sponsored by state Rep. Brad Jacobsen, continues the state's mission to protect workers who are injured on the job, while ensuring that the workers' compensation system remains viable. H.B. 5002 is now P.A. 266 of 2011.
The bill promotes certainty to workers and employers by codifying years of Supreme Court and Court of Appeals decisions. Under the bill, a person receiving workers' compensation benefits must take a job that is within his or her skill set, and that they can physically perform, if it is available to them. If not, the person risks losing the compensation benefits.
"The system's goal must be to help injured workers get back on the job as soon as possible while making sure the benefits they deserve during recovery are paid fully and promptly," Snyder said. "These changes to this 100-year-old act will help ensure that the promise of compensation for injured employees is around for the next century."
The legislation supports the Workers' Compensation Agency's goal of gaining efficiencies through electronic filing and results in a savings of over $400,000 through reorganization of the mediation system for contested workers' compensation issues. Benefits held up by contested cases will move more quickly. Legal costs also will be reduced as the bill allows settlements to be entered without an additional hearing before a magistrate.
Issues such as fraudulent claims by employees or the failure of employers to secure coverage increase the cost of workers' compensation. H.B. 5002 requires the agency to report to the Legislature on measures taken to address such issues.
Depending on the industry, worker’s compensation insurance can be a significant expense. So, why is it mandatory? What if there was no worker’s compensation insurance at all? There was at time, just over 100 years ago when this was true. As you will discover, employers and employees are far better off with it, than without it.
Worker’s Compensation insurance is a product of the Industrial Revolution. Before its existence, there were gross disparities between the amount that an injured worker recovered and the amount that employer’s had to pay for those injuries. An example is instructive.
During the late 1800’s copper was heavily mined out of Michigan’s Upper Peninsula. Workers and their families migrated from Europe to work the mines. It was a dangerous work environment. Explosions and cave-ins were common. From 1905 through 1911, the mines in the United States killed an average of sixty-one men per year, or more than one per week. At the end of this unfortunate run, one out of every ten men killed in the United States mining industry died on the Keweenaw Peninsula. Prior to the advent of worker’s compensation insurance in Michigan in 1912, an injured miner could sue his employer for injuries incurred on the job, but the employer could defend the case with the defenses of assumption of the risk, contributory negligence and the fellow servant rule.
Pursuant to the assumption of the risk doctrine, the employer did not force the miner into the mine, and the miner understood the dangers associated with the work; therefore the miner could not sue the mine owner.
On the other hand, explosions and cave-ins left widows and children without fathers. Savvy attorneys then entered the scene. Coupled with sympathetic judges and juries, the widows and children began to see significant recoveries. Recoveries so large, and unpredictable, employers were negatively affected. Some miners, or the families that were left behind, would experience significant recoveries. Others would get nothing. It became exceedingly difficult for mine owners to budget and turn a profit. The same disparities were experienced throughout all industries, especially those involving heavy manual labor or extremely dangerous activities.
The answer, of course, was the advent of mandatory workmen’s compensation insurance. (It was not until 1969 that the legislature changed the title from “workmen’s” to “worker’s”.) Next year marks Michigan’s 100th year anniversary of mandatory worker’s compensation insurance. The law is really a tradeoff between the rights and duties of the employer and employee. No longer can the employer defend on the basis that the injury was caused be the employee’s own negligence, or by a co-worker, or by an assumption of the risk. In exchange thereof, the employee receives weekly wage loss benefits that equate his weekly take home pay. Further, the employee is not entitled to pain and suffering damages. All he can recover for his injury are wage loss, medical and vocational rehabilitation (re-training) benefits. For amputations, employers are to pay a specific number of weeks for the limb that is lost. The most that a fully dependent widow(er) may recover is 500 weeks of wage loss benefits.
In 2010, 24,097 Michigan workers were injured on the job and experienced loss time of 7 days or more. In the year 2000, that number was 54,207. Last year, the average litigated case settled for $65,868.14. Michigan is presently served by 17 Worker’s Compensation Magistrates. Clearly the employment environment is more predictable and reasonable with it than without it.
KEWEENAW NATIONAL HISTORICAL PARK, Historic Resource Study by Larry Lankton, Department of Social Sciences, Michigan Technological University, For the National Park Service, United States Department of the Interior, 2005
MICHIGAN COMP LAW is written by RONALD W. RYAN. I have practiced workers' compensation law since 1991. Should you have any questions about workers' compensation law, or need representation, email me at [email protected], or call (269) 553-1424.