Michigan Workers’ Compensation Legislation Passes Senate

A bill that could make significant changes to Michigan’s workers’ compensation system was recently passed by the Senate after initial consideration by the House of Representatives. The Senate-approved version of the proposed legislation is different in some measures than the House bill, though, so those differences must be ironed out before the bill could be sent to Governor Rick Snyder for final approval.

Proponents of the bill say the changes could reduce fraud in Michigan’s workers’ compensation system and will encourage injured workers to quickly re-enter the workforce when they are able to do so. However, critics say the provisions of the proposed legislation will penalize workers who have suffered on-the-job injuries.

For example, under the current law, an injured worker may receive workers’ compensation benefits to make up for a reduction in his or her “wage earning capacity” in work suitable to the workers’ training and experience caused by the work-related injury or illness.

So, if a brick layer was injured on the job, the injured worker could receive workers’ compensation benefits until he or she was recovered sufficiently to able to work again as brick layer. In addition, workers’ compensation would cover part of the difference between the injured worker’s previous wages and the lower wages he or she earns in the new job because of the injury.

The proposed legislation would change the definition of wage earning capacity so it is measured by the wages the worker could conceivably earn at a job “reasonably available” to the worker, regardless of whether he or she is actually employed. In essence, this means that workers could see their benefits reduced because a job they could have – but don’t – would pay them as much as they earned before the injury.

Considering the devastating impact of the recession on Detroit and the high competition for the few jobs that do exist, this new law will make it extremely challenging for injured workers to make ends meet.