A Michigan workers comp exemption lets certain business owners legally go without workers’ compensation coverage on themselves — Under MCL 418.161 and the Workers’ Disability Compensation Agency’s employer FAQs, a sole proprietor working in their own sole proprietorship is never an employee of that business, so they do not need to cover themselves.
An employer may use the exclusion form instead of buying a policy only if every one of its employees can be excluded and it uses no subcontractors: — while the law still requires coverage for employees once a business has 3. Under MCL 418.115, private employers (other than agricultural employers) who regularly employ 3 or more employees at one time must carry coverage.
Employers with fewer than 3 employees must also carry it if at least 1 employee has worked 35 or more hours per week for 13 weeks or longer during the preceding 52 weeks. All public employers are covered. or more. This guide explains who qualifies for the Michigan workers comp exemption, the exact form, where to file it, what it costs, and what an exempt owner gives up.
Verified against Michigan sources as of October 2026.
Michigan at a Glance
| Coverage required at | 3. Under MCL 418.115, private employers (other than agricultural employers) who regularly employ 3 or more employees at one time must carry coverage. Employers with fewer than 3 employees must also carry it if at least 1 employee has worked 35 or more hours per week for 13 weeks or longer during the preceding 52 weeks. All public employers are covered. employee(s) |
| Who may elect out | Under MCL 418.161 and the Workers’ Disability Compensation Agency’s employer FAQs, a sole proprietor working in their own sole proprietorship is never an employee of that business, so they do not need to cover themselves. An employer may use the exclusion form instead of buying a policy only if every one of its employees can be excluded and it uses no subcontractors: |
| Exemption form | Form WC-337, Notice of Exclusion. It is not available online. You get it by calling the Agency’s Compliance & Employer Records Division at 517-284-8922. Form WC-338, Notice to Terminate Exclusion, revokes an exclusion. |
| Filed with | The WC-337 is filed with the Michigan Workers’ Disability Compensation Agency (Compliance & Employer Records Division, 517-284-8922). It must be notarized, and a corporation must list all of its corporate officers on it. It is not valid until the Agency stamps it as on file. An individual officer or member election made under an existing policy goes to the insurer in writing. Form page: https://www.michigan.gov/leo/bureaus-agencies/wdca/forms/insurance/wc-337-notice-of-exclusion |
| Renewal | There is no fixed term. Under MCL 418.161, the exclusion stays in effect until it is revoked by written notice to the Agency director (Form WC-338, Notice to Terminate Exclusion). Under the Agency’s rules, the exclusion form is available only while all of the business’s employees can be excluded and no subcontractors are used. |
| Penalty for being uninsured | Under MCL 418.641, failing to secure coverage as required by section 611 is a misdemeanor. The fine is up to 1000, up to 6 months in jail, or both, and each day of failure is a separate offense. An injured employee of an employer who violates section 171 or 611 may also sue that employer for damages in a civil action, even though section 131 otherwise makes workers’ comp the exclusive remedy. The employer stays liable for benefits. |
In This Michigan Guide:
Who Qualifies for A Michigan Workers Comp Exemption
Under MCL 418.161 and the Workers’ Disability Compensation Agency’s employer FAQs, a sole proprietor working in their own sole proprietorship is never an employee of that business, so they do not need to cover themselves. An employer may use the exclusion form instead of buying a policy only if every one of its employees can be excluded and it uses no subcontractors:
Under MCL 418.161, a corporate officer counts as an employee of the corporation. An officer may elect to be individually excluded if the corporation has no more than 10 stockholders and the officer owns at least 10% of the stock. The election needs the corporation’s consent, approved by its board of directors.
The officer gives written notice of the election to the insurer, with the corporation’s consent written on the notice. If the excluded officers make up all of the employees, they may instead file a notice with the Agency director on the form the director prescribes (WC-337). That exclusion stays in effect until it is revoked in writing.
Under MCL 418.161, a partner counts as an employee of the partnership, and an LLC member who is a manager counts as an employee of the LLC. A policy may exclude one or more named partners by endorsement.
An LLC member may elect to be excluded if the LLC has no more than 10 members and the member is also a manager who owns at least a 10% interest, with the LLC’s consent approved by a majority vote of the members. If the excluded persons make up all of the employees, they may file the WC-337 with the Agency instead of buying a policy.
How to File the Michigan Workers Comp Exemption
The form is Form WC-337, Notice of Exclusion. It is not available online. You get it by calling the Agency’s Compliance & Employer Records Division at 517-284-8922. Form WC-338, Notice to Terminate Exclusion, revokes an exclusion.. It is filed with The WC-337 is filed with the Michigan Workers’ Disability Compensation Agency (Compliance & Employer Records Division, 517-284-8922).
It must be notarized, and a corporation must list all of its corporate officers on it. It is not valid until the Agency stamps it as on file. An individual officer or member election made under an existing policy goes to the insurer in writing. Form page: https://www.michigan.gov/leo/bureaus-agencies/wdca/forms/insurance/wc-337-notice-of-exclusion. Renewal: There is no fixed term.
Under MCL 418.161, the exclusion stays in effect until it is revoked by written notice to the Agency director (Form WC-338, Notice to Terminate Exclusion). Under the Agency’s rules, the exclusion form is available only while all of the business’s employees can be excluded and no subcontractors are used..
Filing on the state’s own site costs nothing beyond any statutory fee — the “exemption filing services” that advertise on this search charge for the same form.
Michigan Workers Comp Exemption Rules at a Glance
The exact Michigan workers comp exemption rules every owner should check before deciding to go without coverage:
| Employee threshold | 3. Under MCL 418.115, private employers (other than agricultural employers) who regularly employ 3 or more employees at one time must carry coverage. Employers with fewer than 3 employees must also carry it if at least 1 employee has worked 35 or more hours per week for 13 weeks or longer during the preceding 52 weeks. All public employers are covered. |
| Who may elect out | Under MCL 418.161 and the Workers’ Disability Compensation Agency’s employer FAQs, a sole proprietor working in their own sole proprietorship is never an employee of that business, so they do not need to cover themselves. An employer may use the exclusion form instead of buying a policy only if every one of its employees can be excluded and it uses no subcontractors: |
| Corporate officers | Under MCL 418.161, a corporate officer counts as an employee of the corporation. An officer may elect to be individually excluded if the corporation has no more than 10 stockholders and the officer owns at least 10% of the stock. The election needs the corporation’s consent, approved by its board of directors. The officer gives written notice of the election to the insurer, with the corporation’s consent written on the notice. If the excluded officers make up all of the employees, they may instead file a notice with the Agency director on the form the director prescribes (WC-337). That exclusion stays in effect until it is revoked in writing. |
| LLC members and partners | Under MCL 418.161, a partner counts as an employee of the partnership, and an LLC member who is a manager counts as an employee of the LLC. A policy may exclude one or more named partners by endorsement. An LLC member may elect to be excluded if the LLC has no more than 10 members and the member is also a manager who owns at least a 10% interest, with the LLC’s consent approved by a majority vote of the members. If the excluded persons make up all of the employees, they may file the WC-337 with the Agency instead of buying a policy. |
| Form | Form WC-337, Notice of Exclusion. It is not available online. You get it by calling the Agency’s Compliance & Employer Records Division at 517-284-8922. Form WC-338, Notice to Terminate Exclusion, revokes an exclusion. |
| Where to file | The WC-337 is filed with the Michigan Workers’ Disability Compensation Agency (Compliance & Employer Records Division, 517-284-8922). It must be notarized, and a corporation must list all of its corporate officers on it. It is not valid until the Agency stamps it as on file. An individual officer or member election made under an existing policy goes to the insurer in writing. Form page: https://www.michigan.gov/leo/bureaus-agencies/wdca/forms/insurance/wc-337-notice-of-exclusion |
| Renewal | There is no fixed term. Under MCL 418.161, the exclusion stays in effect until it is revoked by written notice to the Agency director (Form WC-338, Notice to Terminate Exclusion). Under the Agency’s rules, the exclusion form is available only while all of the business’s employees can be excluded and no subcontractors are used. |
| Proof of exemption or coverage | A general contractor should ask a subcontractor for a certificate of workers’ comp insurance or a copy of a WC-337 Notice of Exclusion stamped by the Agency (WC-PUB-002). The Agency also has an online Insurance Coverage Lookup that searches by employer name and location, and the Insurance Compliance Division can confirm coverage at 517-284-8922. Under MCL 418.171, a general contractor may become liable for an uninsured subcontractor’s workers. |
What A Michigan Workers Comp Exemption Gives Up
An exempt owner who is hurt on the job in Michigan has no workers’ comp claim: no medical coverage from the policy, no wage replacement and no disability award. Health insurance may exclude work injuries. Most owners who physically work the job keep themselves covered for that reason.
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One honest paragraph on the “ghost policy”: a minimum-premium policy with no employees sold to owners who need a certificate of insurance. It is legal in many states, but it is not a Michigan workers comp exemption — it is coverage with nobody on it. If you add a worker, it must be reported, or the audit will find them.
Workers Exempt by Law in Michigan
Separate from the owner’s election, Michigan law exempts some classes of workers from coverage — commonly domestic workers below a threshold, casual labor, some farm labor and licensed real-estate agents paid by commission. A worker who does not fit a listed class counts toward the threshold, no matter what the 1099 says.
Proving A Michigan Workers Comp Exemption or Coverage
A general contractor should ask a subcontractor for a certificate of workers’ comp insurance or a copy of a WC-337 Notice of Exclusion stamped by the Agency (WC-PUB-002). The Agency also has an online Insurance Coverage Lookup that searches by employer name and location, and the Insurance Compliance Division can confirm coverage at 517-284-8922. Under MCL 418.171, a general contractor may become liable for an uninsured subcontractor’s workers.
Why the Michigan Workers Comp Exemption Matters
The Michigan workers comp exemption is a trade: lower cost today against no safety net if you are hurt. The second half of the trade is the one the search results never lead with. Michigan’s coverage test is either 3 or more employees, or just 1 employee working 35 or more hours per week for 13 weeks within the preceding 52 weeks.
So a business with only 1 full-time employee can still be required to carry coverage. The WC-337 is only for businesses where every single employee can be excluded and no subcontractors are used. It must be notarized and stamped by the Agency, it is not downloadable, and owners give up benefits once excluded. Confirm eligibility with the WDCA and a licensed attorney.
If the Michigan workers comp exemption rules above leave any doubt about whether a worker counts, ask the state agency before you decide — the answer is free, and the penalty for guessing wrong is not.
Employer side: the Michigan requirements guide covers the threshold, who counts and the penalties in full. Hurt while exempt? You may still have a claim against a third party — a licensed attorney can say.
Frequently Asked Questions
Who can file a workers comp exemption in Michigan?
Under MCL 418.161 and the Workers’ Disability Compensation Agency’s employer FAQs, a sole proprietor working in their own sole proprietorship is never an employee of that business, so they do not need to cover themselves. An employer may use the exclusion form instead of buying a policy only if every one of its employees can be excluded and it uses no subcontractors:
What form is the Michigan workers comp exemption?
Form WC-337, Notice of Exclusion. It is not available online. You get it by calling the Agency’s Compliance & Employer Records Division at 517-284-8922. Form WC-338, Notice to Terminate Exclusion, revokes an exclusion.. File it on the state’s own site; filing services charge for the same form.
Can an exempt owner in Michigan still collect benefits if hurt?
No. An exemption removes the owner from coverage, so there is no claim for medical care or lost wages. That is the trade.
Official Michigan Sources & Resources
- Michigan Michigan Workers’ Disability Compensation Agency (WDCA), part of the Department of Labor and Economic Opportunity (LEO): https://www.michigan.gov/leo/bureaus-agencies/wdca
- Michigan Workers’ Comp Statute: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-418-161
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
This Michigan workers comp exemption guide was last verified against official Michigan sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is informational only and is not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm or insurer. Workers’ comp benefits, settlement values, deadlines, and requirements vary by state and by the specific facts of your injury and change over time, and any settlement figures here are illustrative only.
Confirm your rights and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.