Workers' Compensation

A Average Weekly Wage (AWW) Link

The baseline for calculating workers' compensation wage loss benefits. AWW is generally calculated by averaging the employee's weekly earnings over the 52 weeks prior to the injury (MCL 418.361). Correct calculation of AWW is often disputed and can significantly affect the amount of weekly benefits.

C Coordination of Workers' Compensation Benefits Link

The coordination of workers' compensation benefits with other disability benefits (such as Social Security disability or pension benefits) to prevent double recovery. Michigan's Workers' Disability Compensation Act allows for benefit coordination in certain circumstances.

D Disability (Workers' Compensation) Link

Under Michigan's Workers' Disability Compensation Act (WDCA), MCL 418.301, a worker is "disabled" if they have a limitation in their wage-earning capacity caused by a work-related injury or disease. Disability can be total (unable to perform any work) or partial (able to perform some but not all prior work).

E Employer's Liability Link

In some circumstances, an injured worker can sue their employer in a third-party tort action (rather than through workers' compensation) - for example, when the employer's intentional misconduct caused the injury, or when the worker is a statutory employee rather than a direct employee. The interplay between workers' compensation and tort liability requires careful analysis.

I Independent Contractor Link

A worker who is self-employed and not entitled to workers' compensation as an employee. Misclassification of employees as independent contractors to avoid workers' compensation obligations is a significant legal issue. Michigan courts look beyond job titles to the actual working relationship to determine whether a person is an employee or independent contractor.

M Maximum Medical Improvement (MMI) Link

The point at which a workers' compensation claimant's medical condition has stabilized and is unlikely to significantly improve with further treatment. Reaching MMI is often a trigger for reassessing benefit levels and can be the basis for an insurer seeking to reduce or terminate benefits.

R Redemption of Liability Link

A lump-sum settlement of all future workers' compensation benefits. In Michigan, redemption agreements must be approved by a magistrate and meet specific legal requirements. Once a redemption is approved, the worker typically gives up all future workers' compensation claims arising from that injury in exchange for the agreed lump sum.

S Specific Loss Benefits Link

Benefits payable under MCL 418.361(2) for the permanent loss of a specific body part or function - such as loss of an arm, leg, hand, foot, or vision in one eye - regardless of the impact on wage-earning capacity. Specific loss benefits are paid in addition to any wage loss benefits.

S Second Injury Fund Link

A Michigan fund (MCL 418.521 et seq.) that provides additional compensation in cases where a subsequent work injury combines with a pre-existing disability to create a greater disability than the second injury alone would have caused. The Second Injury Fund reduces the burden on employers for compensating disabled workers with prior conditions.

W Workers' Disability Compensation Act (WDCA) Link

Michigan's primary workers' compensation statute (MCL 418.101 et seq.), which governs the rights and obligations of employers, employees, and insurers in work-related injury and disease cases. The WDCA provides the exclusive remedy against an employer for work-related injuries, meaning an injured worker generally cannot sue their employer in tort for ordinary workplace negligence.

This glossary is provided for general informational purposes only and does not constitute legal advice. Reading this glossary does not create an attorney-client relationship. Laws change and Michigan statutes may be amended after the date this glossary was last updated. Always consult a licensed Michigan attorney for legal advice specific to your situation.