In Michigan, if you are required to carry workers' comp and you do not, going without it is a crime, not just a paperwork slip. Failing to secure coverage is a misdemeanor punishable by a fine of up to 1,000 dollars, up to 6 months in jail, or both, and each day you go without is a separate offense (MCL 418.641). On top of that, an injured worker can sue you directly, and you lose the defenses that normally protect an insured employer.
Who this is for: Michigan employers weighing the risk of going uninsured, and owners who have let a policy lapse and want to understand their real exposure.
The short version
- Failing to carry required coverage is a misdemeanor: up to a 1,000 dollar fine, up to 6 months in jail, or both.
- Each day without coverage is charged as a separate offense, so the exposure multiplies fast.
- An uninsured employer loses the legal shield comp provides, and an injured worker can sue directly (MCL 418.641(2)).
- In that lawsuit you also lose the usual defenses that the worker was careless, assumed the risk, or was hurt by a co-worker (MCL 418.141).
- If the business is a corporation, its officers and directors can be held personally liable for the amounts owed.
The criminal penalty that stacks by the day
Michigan does not treat going uninsured as a simple fine. Under MCL 418.641, failing to secure the payment of compensation is a misdemeanor, punishable by up to 1,000 dollars, up to 6 months in jail, or both, and the law states that each day's failure is a separate offense. That daily-offense language is what makes a lapse dangerous: a stretch of uninsured operating is not one violation, it is many. Beyond the criminal side, the bureau can pursue an uninsured employer in a civil action to recover benefits and costs it had to cover.
| Consequence | What it is | Rough exposure |
|---|---|---|
| Criminal charge | Failing to secure required coverage | Misdemeanor: up to 1,000 dollars, up to 6 months in jail, or both |
| Daily offense | Each day uninsured counts separately | Charges multiply by the number of days |
| Direct lawsuit | Injured worker sues the uninsured employer | Damages with the usual defenses stripped away |
| Bureau recovery | The agency recovers benefits it had to pay | Civil action against the employer |
| Personal liability | Corporate officers and directors for unpaid amounts | Individual, joint, and several liability |
The lawsuit you can no longer defend
Carrying a policy is what makes comp the injured worker's main remedy and keeps a lawsuit off the table. Go uninsured, and an injured employee can pursue you in court free of that protection (MCL 418.641(2)), and Michigan strips the usual defenses in that suit: it is no defense that the worker was negligent, assumed the risk, or was hurt by a fellow employee (MCL 418.141). A single serious injury lawsuit, with those defenses gone, can cost far more than years of premium, on top of the criminal exposure and the bureau's recovery action.
What Michigan does not do, and what it does instead
Some states can post a stop-work order that shuts you down on the spot. Michigan's comp law does not grant that kind of stop-work power. That is not a reason to relax, because the tools it does use are serious: criminal misdemeanor charges that stack by the day, a civil recovery action by the bureau, personal liability for corporate officers and directors, and the loss of the exclusive-remedy protection that otherwise keeps injured workers from suing you. In practice, the combination is often costlier than any single fine.
A Sterling Heights example
Illustrative, not a quote. A Sterling Heights roofing company lets its workers' comp lapse over a slow winter to save money. A roofer falls and is badly hurt while the policy is down. The company faces misdemeanor exposure that counts each uninsured day separately, a civil recovery action from the bureau, and a lawsuit from the injured worker with the usual defenses stripped away, and because it is a corporation, the officers can be held personally liable for what the company cannot pay. The combined cost dwarfs the premium it skipped. After the claim, we place a new policy and rate the roofing payroll correctly. See our workers comp for roofers page.
Real questions Michigan owners ask
What is the penalty for not having workers comp in Michigan?
It is a crime. Failing to carry required coverage is a misdemeanor punishable by up to a 1,000 dollar fine, up to 6 months in jail, or both, and each day without coverage is a separate offense.
Does each day without coverage really count separately?
Yes. Michigan law states that each day's failure to carry required coverage is a separate offense, so a lapse is treated as many violations, not one.
Can an injured worker sue me if I have no coverage?
Yes. An uninsured employer loses the protection that normally makes comp the only remedy, so an injured employee can sue you directly for damages.
What defenses do I lose in that lawsuit?
The usual ones. Michigan strips the defenses that the worker was careless, assumed the risk, or was hurt by a co-worker, which makes an uninsured injury suit much harder to defend.
Can I be personally liable if my corporation skips coverage?
Yes. If a corporation that was required to carry coverage goes uninsured, its officers and directors can be held individually and jointly liable for the amounts owed.
Can Michigan issue a stop-work order?
Not under the comp law. Michigan does not have a stop-work order power for this, but it uses daily misdemeanor charges, civil recovery, personal liability, and the loss of your lawsuit protection instead.
Why Michigan owners choose Morrow
- We shop the right market for you. In Michigan you buy workers' comp on the open market from any private carrier licensed in the state, because Michigan has no state fund; if no carrier will take you, the Michigan Workers' Compensation Placement Facility (the assigned-risk plan) is the guaranteed fallback, so we can shop your rate freely and still keep a backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Michigan guides
Every Michigan business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Michigan (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Workers comp vs employers liability
- What workers comp does not cover
- Michigan roofer workers comp
This guide is general information, not legal advice. Michigan rules and penalty amounts can change, so verify current requirements with the Michigan Workers' Disability Compensation Agency (WDCA) or a licensed advisor before you rely on them. Last updated: July 2026.