A Michigan partnership must carry workers' comp once it meets the state's coverage test (3 or more people working at one time, or one person at 35 or more hours a week for 13 weeks or longer; MCL 418.115), and here is the twist: a working partner who draws wages is treated as an employee and counts toward that test by default. A partner can be left off the policy only by naming them in a policy endorsement and filing a formal exclusion. So partnerships often reach the trigger faster than owners expect.
Who this is for: Michigan general and limited partnerships, with or without non-partner staff.
The short version
- Working partners who receive wages are treated as employees under Michigan law and count toward the coverage test.
- That means two working partners plus one employee can already put you at the 3-person trigger.
- A partner can be excluded by naming them in a policy endorsement and filing the state exclusion form (Form WC-337).
- Non-partner employees are always covered and cannot be excluded.
- Partners are personally liable for the partnership's comp obligations if it goes uninsured.
Why Michigan counts working partners
Michigan law treats a working member of a partnership who receives wages as an employee (MCL 418.161). That is different from a sole proprietor, who is never counted. Because partners count, a partnership can hit the 3-people-at-one-time trigger with a small crew: two partners working alongside a single hired hand is already three people. The single-employee hours trigger works the same way, based on 35 or more hours a week for 13 weeks or longer. The practical effect is that many partnerships need a policy sooner than they would guess, so it pays to run the numbers before you assume you are exempt.
What applies to your partnership
| Your partnership setup | Is comp required? | What partners and staff should know |
|---|---|---|
| Two partners, no other staff | Often no | Two working partners alone usually do not cross a trigger, but a third worker does |
| Two partners plus one employee | Yes | That is 3 people at one time; the employee must be covered, partners count unless excluded |
| One partner plus a 35-hour, 13-week worker | Yes | Meets the single-employee hours trigger |
| Partners who want off the policy | File to exclude | Name each partner in an endorsement and file Form WC-337, stamped by the agency |
Excluding a partner
Because partners are on the policy by default, leaving one off takes a filing, not a handshake. Michigan lets a workers' comp policy exclude a named partner by endorsement (MCL 418.161(2)), and the exclusion is documented on Form WC-337, which is not valid until the agency stamps it on file. You can exclude some partners and keep others, and your employees stay covered no matter what. One caution worth remembering: partners carry personal liability, so if the partnership was required to insure and did not, the partners can be personally on the hook for the claim and the penalties.
A Kalamazoo example
Illustrative, not a quote. A Kalamazoo plumbing partnership is run by two partners who both work in the field, plus one apprentice. With three people working at one time, Michigan requires a policy, and the apprentice must be covered. The two partners decide they want to stay on the policy so their own on-the-job injuries are paid, so they do not file an exclusion. We place the policy, rate the plumbing payroll correctly, and produce certificates the same day when a general contractor asks for proof. See our workers comp for plumbers page.
Real questions Michigan owners ask
Do partners count as employees for Michigan workers comp?
Yes. A working partner who draws wages is treated as an employee under Michigan law, so partners count toward the 3-people-at-one-time and single-employee hours triggers unless excluded.
Does a two-partner firm with one employee need coverage?
Usually yes. Two working partners plus one employee is three people working at one time, which crosses Michigan's headcount trigger, so a policy is required and the employee must be covered.
Can a partner be left off the policy?
Yes, by filing. Michigan lets a policy exclude a named partner by endorsement, documented on Form WC-337, which is valid only once the agency stamps it on file.
Are our employees covered if the partners opt out?
Yes. Excluding partners only affects those partners. Every non-partner employee stays fully covered and cannot be excluded.
What if two partners work alone with no employees?
Often no policy is required. Two partners with no other workers usually do not cross a trigger, but adding a third worker, or one working long enough hours, changes that.
Are partners personally liable if we skip required coverage?
Yes. Partners carry personal liability, so if the partnership was required to carry workers comp and did not, the partners can be personally responsible for the claim and the penalties.
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 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?
- What happens if I don't carry workers comp?
- 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)
- Do sole proprietors need workers comp?
- What workers comp does not cover
- Michigan plumber 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.