Michigan House Bill HB5191

Michigan 2025-2026 Regular Session

• Introduced: 10/30/25
• Refer: 10/30/25

Caption

Worker's compensation: funds; uninsured employer's security fund; modify. Amends sec. 501 of 1969 PA 317 (MCL 418.501) & adds sec. 536.

Impact

The introduction of this bill has significant implications for state labor laws, primarily concerning the responsibilities of employers in maintaining proper workers' compensation insurance. If enacted, it fortifies the protection of employees against uninsured employers, ensuring they have access to medical benefits and financial support following work-related injuries. The fund will be replenished through state appropriations and revenue generated from fines imposed on non-compliant employers, which is critical for maintaining its operational viability.

Summary

House Bill 5191 aims to amend the 1969 Worker’s Disability Compensation Act by introducing modifications to administer an uninsured employer's security fund. This fund is designed to protect employees who sustain injuries while working for employers that do not carry the mandated workers’ compensation insurance. The bill establishes procedures for the fund's administration, outlining the responsibilities of the trustees in managing claims and benefits issued from the fund. By creating this insurance fund, the bill seeks to ensure that injured workers receive the necessary compensation, even when their employer is uninsured.

Contention

Some points of contention have arisen regarding the mechanisms for enforcement and compliance. Critics argue that the bill may impose heavy financial burdens on small businesses, particularly the penalties for uninsured employers. Additionally, there are worries about the sufficiency and timeliness of funding for the insurance fund, as deployment hinges on legislative appropriations, which could lead to delays in benefit disbursement. Stakeholders on both sides have expressed concerns about how the fund's administration and the associated compliance requirements may affect business operations across Michigan.