Michigan House Bill HB5541

Michigan 2025-2026 Regular Session

• Introduced: 2/19/26
• Refer: 2/19/26

Caption

Worker's compensation: benefits; calculation of average weekly wage; modify. Amends sec. 371 of 1969 PA 317 (MCL 418.371) & adds sec. 612.

Impact

The impact of HB5541 is significant for both employees and employers in Michigan. For employees, the new calculation guidelines will potentially ensure that their wage benefits are more representative of their actual earnings and better compensated after sustaining an injury. This could enhance the financial stability of injured workers during their recovery periods. Furthermore, the bill contains provisions aimed at reducing the premium rates employers must pay for workers' compensation insurance when these calculations lead to lower rates, thus addressing some concerns about the financial burdens faced by smaller businesses.

Summary

House Bill 5541 proposes amendments to the 1969 Worker’s Disability Compensation Act, specifically targeting the calculation of the average weekly wage for injured employees. The bill modifies Section 371 and introduces Section 612. The primary goal of this legislation is to adjust how average weekly wages are calculated in order to ensure that compensation reflects a more equitable wage determination for employees who have incurred compensable injuries. This amendment seeks to clarify the inclusion and exclusion of certain forms of compensation in wage calculations, particularly concerning overtime and discretionary bonuses.

Contention

Notable points of contention surrounding HB5541 may arise from its potential implications for employers, especially smaller businesses who may have concerns about the sustainability of their insurance premiums under the new calculation framework. The bill sets limitations on how long certain provisions apply, specifically until December 31, 2028, which may raise concerns about the longevity and permanence of these changes. Additionally, there is likely to be debate regarding the definitions of 'discretionary bonus' and 'average weekly wage,' which could lead to differing interpretations and applications in practice.