Michigan Workers’ Comp Reforms Could Reshape Benefits and Disability Rules

A Michigan lawmaker has introduced Senate Bill 1079, a comprehensive reform of the state’s workers’ compensation laws. If enacted, the legislation would increase the cap on workers’ compensation benefits, overhaul the legal definition of ‘disability,’ and eliminate the traditional distinctions between total and partial disability. This proposal could have sweeping implications for employers and injured workers alike.

The bill redefines disability as an inability to ‘perform or obtain one or more jobs’ the worker previously performed, a notable shift from the current standard, which assesses whether a worker can perform any job that meets their qualifications and offers maximum wages. It also repeals provisions distinguishing total and partial disabilities, aligning disability determinations more closely with individual circumstances. Additionally, SB 1079 introduces a retroactive provision applying these changes to claims dating back to June 30, 1985.

Critics, including the Michigan Chamber of Commerce, argue the reforms could upset the balance of existing workers’ compensation laws, potentially burdening employers with higher costs. The push to pass this bill comes as Democrats face a narrowing window to pass legislation before losing control of the state House of Representatives at year’s end.

This reform has significant potential to reshape Michigan’s workers’ compensation system, affecting both claimants and employers across industries. Stakeholders are closely monitoring the bill’s progress and its potential impact on longstanding legal definitions and compensation practices.