Insurance
Michigan workers’ comp: the hours test, three employees, and owners
Key takeaways
- Michigan does not use a simple “first construction employee” rule on the official page cited here. Coverage is required if you regularly employ one or more employees 35 hours or more per week for 13 weeks or longer in the preceding 52 weeks, or regularly employ three or more employees at one time (including part-time).
- A sole proprietor is never an employee of that sole proprietorship. Partners, corporate officers, and manager-members of an LLC are employees of the entity.
- Separate tests apply to agricultural employers and to householders employing domestic servants. All public employers are required.
On this page
The official source is Michigan Department of Labor and Economic Opportunity, Workers’ Disability Compensation Agency, Workers’ Disability Compensation Insurance Requirements, reviewed November 13, 2026. This summary is not a determination of whether your shop has crossed the test.
The hours test and the three-employee test
Either test can require coverage. A single full-time helper who works 35 hours or more a week for 13 weeks or longer in the preceding 52 weeks can be enough. Three employees working at one time, including part-time help, can also be enough even if no one person meets the hours test. Count carefully when you add seasonal or weekend help. This website does not run that count for you.
We did not find a separate first-employee construction exception on this official Michigan page, so this guide does not invent one. If you work in construction, still read the official requirements and any contract terms a general contractor imposes.
Who counts as an employee of the entity
The official page states that a sole proprietor is never an employee of that sole proprietorship. Partners, corporate officers, and manager-members of an LLC are employees of the entity. That distinction matters if you formed an LLC or corporation and then assumed you had “no employees.” Confirm current owner and election rules with the Agency; this page is not an exemption filing.
Other official categories
The same official page describes separate tests for agricultural employers and for householders employing domestic servants, and it states that all public employers are required to have coverage. Those categories are outside the usual first-hire trade example, but they are part of the official rule set.
Frequently asked questions
Does Michigan require workers' comp for one employee?
It can, if that person is regularly employed 35 hours or more per week for 13 weeks or longer in the preceding 52 weeks. Three or more employees at one time is a separate official trigger, including part-time help.
Is a Michigan LLC owner an employee?
The official LEO page says a sole proprietor is never an employee of that sole proprietorship, but partners, corporate officers, and manager-members of an LLC are employees of the entity. Confirm with the Agency.
Is there a special Michigan construction exception?
The official insurance-requirements page cited here does not spell out a separate first-employee construction exception, so this site does not invent one.
This page summarizes official agency pages retrieved or reviewed on November 13, 2026. It is not legal, tax, or insurance advice, not a quote, and not a recommendation of a specific insurer. Confirm current rules with the linked agency, and with counsel or a licensed agent when you need a determination on your facts.
If you need payroll set up for a first W-2 hire, you can Run payroll with Gusto. Gusto is a payroll service, not the insurer, and this is not a guarantee of a policy, a rate, or savings. In Ohio and North Dakota, do not use a private workers’ compensation policy — start with the official state fund (Ohio BWC or North Dakota WSI). Washington and Wyoming also use official state funds; see the state-fund guide.
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