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Who Pays? Workers’ Compensation or No-Fault Insurance?

What happens if you are hurt in an auto accident while driving for work? It can be confusing whether you are covered by your employer’s workers’ compensation or its commercial automobile insurance policy. The difference, it turns out, is on how you were hired.

The Michigan Supreme Court just ruled on a case where a lawn maintenance worker was injured when a leaf vacuum machine fell off the company truck and hurt him. The question was who pays: the employer’s workers ‘compensation or the commercial no-fault auto insurance?

Like most commercial policies, the employer’s no-fault policy excluded any benefits that could be paid under a workers’ compensation claim. Workers’ compensation is the only remedy for injuries suffered by employees in the course of their work. To get the benefit of Michigan’s top-notch no-fault insurance, the worker had to show he wasn’t an company employee.

The Worker’s Disability Compensation Act says an “employee” is:

“Every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury, if the person in relation to this service does not maintain a separate business, does not hold himself or herself out to and render service to the public, and is not an employer subject to this act.”

If a worker is not an employee, then he or she is an independent contractor and workers’ compensation does not apply.

In this case, the worker “held himself out to the public to perform the same services as the work he performed” for the employer. In other words, he also provided leaf clean-up services independently on the side.

The Michigan Supreme Court ruled that there are 3 requirements for a person to qualify as an employee under the WDCA, that the person:

  1. Does not maintain a separate business;
  2. Does not hold himself or herself out to and render service to the public; and
  3. Is not an employer subject to the WDCA.

If any 1 of the 3 requirements in the WDCA isn’t met, then the worker is an independent contractor and can collect under the No-Fault Act instead of workers’ compensation. Since the worker here did leaf cleanup independently on the side, he did not qualify as an employee.

This is good news for many workers in Michigan. From truckers to landscapers, many companies hire independent contractors to fill their ranks during busy seasons. Under this decision, if those workers are in a car accident while on the job they can file for no-fault benefits, which cover far more than workers’ compensation.

David Christensen and his team at Christensen Law in Southfield, Michigan, can help workers hurt in motor vehicle accidents while on the job. They understand how these laws work together and can help workers get the recovery they need in these difficult times. If you or your loved one has been hurt while driving on the job, contact Christensen Law for a free consultation.