Summary — HB 5184 (Worker's Disability Compensation Act amendment)
Status and procedural history
- Introduced: March 14, 2025 (filed); read first time April 7, 2025; referred to Human Services.
- Electronically reproduced and re-introduced October 30, 2025; referred to the House Committee on Economic Competitiveness.
- Primary sponsor(s): Rep. Jimmie Wilson Jr. (multiple co-sponsors listed).
- Companion bill: SB 2331.
Purpose
- To tighten deadlines for payment of workers’ compensation benefits and increase financial penalties and interest for late payment or nonpayment, by amending section 801 of the Worker’s Disability Compensation Act (MCL 418.801).
Key provisions and changes
- Due date for accrued compensation: Confirms that compensation becomes due on the 14th day after the employer has notice or knowledge of the disability or death, and that accrued compensation must be paid on that date; thereafter payments are weekly.
- Shorter grace period for weekly benefits: If weekly compensation (including accrued weekly benefits or amounts due under a final redemption order) is not paid within 14 days after becoming due and payable (reduced from the prior 30-day period) and there is not an ongoing bona fide dispute, the bill requires:
- A daily penalty of $100 per day (increased from $50/day).
- A maximum total penalty of $25,000 (increased from $1,500).
- Medical bills and travel allowances: If not paid within 30 days after the carrier receives notice of nonpayment (and no bona fide dispute), a penalty of $100 per day or the amount of the bill, whichever is less, must be added and paid. Maximum total penalty increases to $25,000 (from $1,500). The 30‑day timing for these items is retained.
- Interest on awards: When weekly compensation is paid pursuant to an award (magistrate, arbitrator, board, appellate commission, or court), interest is payable at 10% per annum from the date each payment was due until paid.
- Rate-making: Daily penalty charges under the weekly-benefits penalty do not count as elements of loss for purposes of insurance rate-making.
- Employer notice obligation: If an employer has notice of disability or death but fails to notify the carrier, the employer is liable for the penalty under the weekly-benefits provision for the period of failure to notify.
- Existing reporting/analytics language (coordination on fraud detection and reporting) is retained in the section.
Who is affected
- Injured workers: Likely to receive payments more quickly and have stronger remedies when payments are delayed.
- Employers and carriers/insurers: Face shorter payment deadlines, higher per‑day penalties, a much larger statutory cap on penalties, and potential increased interest exposure; may adjust reserves, claims handling practices, and dispute strategies.
- Administrative bodies: Worker’s compensation agency and courts/boards will continue to administer awards and apply interest/penalty rules; rate-making authorities retain exclusion for daily penalties.
Practical impact and considerations
- The bill increases incentives for carriers and employers to pay timely and may reduce delays in benefit delivery.
- The larger penalties and shorter cure period may increase disputes over whether a bona fide dispute exists, and could raise litigation or administrative contestation.
- Insurers may respond with higher premiums or more rigorous claims defenses and documentation to preserve bona fide dispute protections.
Effective operation depends on final enactment language and any implementing rules or guidance from the worker’s compensation agency.
