WORKER'S DISABILITY COMPENSATION ACT OF 1969
Act 317 of 1969
418.171 Employer contracting with person not subject to act; liability; applicability of section to principal and contractor; willful circumvention of provisions; employer as contractor; reimbursement agreement.
Sec. 171.
(1) If any employer subject to the provisions of this act, in this section referred to as the principal, contracts with any other person, in this section referred to as the contractor, who is not subject to this act or who has not complied with the provisions of section 611, and who does not become subject to this act or comply with the provisions of section 611 prior to the date of the injury or death for which claim is made for the execution by or under the contractor of the whole or any part of any work undertaken by the principal, the principal shall be liable to pay to any person employed in the execution of the work any compensation under this act which he or she would have been liable to pay if that person had been immediately employed by the principal. If compensation is claimed from or proceedings are taken against the principal, then, in the application of this act, reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the person under the employer by whom he or she is immediately employed. A contractor shall be deemed to include subcontractors in all cases where the principal gives permission that the work or any part thereof be performed under subcontract.
(2) If the principal is liable to pay compensation under this section, he or she shall be entitled to be indemnified by the contractor or subcontractor. The employee shall not be entitled to recover at common law against the contractor for any damages arising from such injury if he or she takes compensation from such principal. The principal, in case he or she pays compensation to the employee of such contractor, may recover the amount so paid in an action against such contractor.
(3) This section shall apply to a principal and contractor only if the contractor engages persons to work other than persons who would not be considered employees under section 161(1)(d).
(4) Principals willfully acting to circumvent the provisions of this section or section 611 by using coercion, intimidation, deceit, or other means to encourage persons who would otherwise be considered employees within the meaning of this act to pose as contractors for the purpose of evading this section or the requirements of section 611 shall be liable subject to the provisions of section 641. Nothing in this section shall be construed to prohibit an employee from becoming a contractor subject to the provisions of section 151. A principal may demand that the contractor enter into a written agreement with the principal agreeing to reimburse the principal for any loss incurred under this section due to a claim filed pursuant to this act for compensation and other benefits.
History: 1969, Act 317, Eff. Dec. 31, 1969 ;-- Am. 1985, Act 103, Imd. Eff. July 30, 1985
Compiler's Notes:
For legislative intent as to severability, see Compiler's note to MCL 418.213.
PopularName Notes:
Act 317
Notes of Decisions
David J McQueer v. Perfect Fence Co., 917 N.W.2d 584 (Mich. 2018).
· cites it 218× “611 by failing to procure workers’ compensation coverage for him and had violated MCL 418.171 by encouraging him to pose as a nonemployee.”
Williams v. Lang, 327 N.W.2d 240 (Mich. 1982).
· cites it 20× “I concur in Justice WILLIAMS' conclusion that MCL 418.171; MSA 17.237(171), does not say and does not mean that the principal is liable to pay compensation only if the work undertaken is a part of the usual or normal business operation of the principal.”
Mccaul v. Modern Tile & Carpet, Inc, 640 N.W.2d 589 (Mich. Ct. App. 2002).
· cites it 8× “These findings support the wcac’s conclusion that plaintiff ran his own business and was therefore not an employee under § 161 of the WDCA. Id. 6 In a related argument, plaintiff asserts that he is entitled to benefits because defendant is his “statutory employer” pursuant to…”
Bennett v. Mackinac Bridge Auth., 808 N.W.2d 471 (Mich. Ct. App. 2010).
· cites it 4× “Plaintiff thereafter filed the instant action seeking benefits from American Painting and the Authority pursuant to § 171 of the Worker’s Disability Compensation Act (WDCA), 3 MCL 418.171, the statutory employment provision.”
Blanzy v. Brigadier Gen. Contractors, Inc., 613 N.W.2d 391 (Mich. Ct. App. 2000).
· cites it 8× “MCL 418.171; MSA 17.237(171). Plaintiff argued as follows: plaintiff was HCM's employee, but HCM did not carry worker's compensation insurance.”
Wells v. Firestone Tire & Rubber Co., 364 N.W.2d 670 (Mich. 1985).
· cites it 2× “Professor Larson explains: "This tort liability arose out of detailed activities carried on by the servant, resulting in some kind of harm to a third person.”
Morin v. Dep't of Soc. Servs., 352 N.W.2d 325 (Mich. Ct. App. 1984).
· cites it 8× “; MSA 17.237(101) et seq., because plaintiff was an independent contractor hired by Radomski and not an employee of DSS.”
Dagenhardt v. Special Mach. & Eng'g, Inc, 345 N.W.2d 164 (Mich. 1984).
· cites it 4× “Conse *525 quently, defendant petitioned the Bureau of Workers’ Disability Compensation to determine its liability under MCL 418.171; MSA 17.237(171), as a statutorily substituted employer.”
Higgins v. Monroe Evening News, 245 N.W.2d 769 (Mich. Ct. App. 1976).
· cites it 4× “What an affirmative ruling in this case would do would be to combine the Zdrojewski compensation rule with the special uninsured independent contractor provision of MCLA 418.171; MSA 17.237(171), to award compensation to a person whose existence was not known to the defendant or…”
White v. Weinberger Builders, Inc., 242 N.W.2d 427 (Mich. 1976).
· cites it 2× “No weekly benefits were paid because of a lack of insurance being carried by the gas station proprietor, and because there was (quoting plaintiff's brief) `substantial question as to whether the Citron Oil Company was a statutory employer within the meaning of Section 10(a) of…”
Drewes v. Grand Valley State Colleges, 308 N.W.2d 642 (Mich. Ct. App. 1981).
· cites it 3× “Under § 171(1) of the act, MCL 418.171(1); MSA 17.237(171X1), whenever an employer who is subject to the act (referred to as the "principal”) contracts with another who is either not subject to the act or who is otherwise uninsured for purposes of workers’ compensation (referred…”
— Mich. Comp. Laws § 418.171(1) — 9 cases
David J McQueer v. Perfect Fence Co., 917 N.W.2d 584 (Mich. 2018).
“611 by failing to procure workers’ compensation coverage for him and had violated MCL 418.171 by encouraging him to pose as a nonemployee.”
Bennett v. Mackinac Bridge Auth., 808 N.W.2d 471 (Mich. Ct. App. 2010).
“Plaintiff thereafter filed the instant action seeking benefits from American Painting and the Authority pursuant to § 171 of the Worker’s Disability Compensation Act (WDCA), 3 MCL 418.171, the statutory employment provision.”
Drewes v. Grand Valley State Colleges, 308 N.W.2d 642 (Mich. Ct. App. 1981).
“Under § 171(1) of the act, MCL 418.171(1); MSA 17.237(171X1), whenever an employer who is subject to the act (referred to as the "principal”) contracts with another who is either not subject to the act or who is otherwise uninsured for purposes of workers’ compensation (referred…”
Morin v. Dep't of Soc. Servs., 352 N.W.2d 325 (Mich. Ct. App. 1984).
“; MSA 17.237(101) et seq., because plaintiff was an independent contractor hired by Radomski and not an employee of DSS.”
— Mich. Comp. Laws § 418.171(2) — 7 cases
David J McQueer v. Perfect Fence Co., 917 N.W.2d 584 (Mich. 2018).
“611 by failing to procure workers’ compensation coverage for him and had violated MCL 418.171 by encouraging him to pose as a nonemployee.”
Dagenhardt v. Special Mach. & Eng'g, Inc, 345 N.W.2d 164 (Mich. 1984).
“Conse *525 quently, defendant petitioned the Bureau of Workers’ Disability Compensation to determine its liability under MCL 418.171; MSA 17.237(171), as a statutorily substituted employer.”
Drewes v. Grand Valley State Colleges, 308 N.W.2d 642 (Mich. Ct. App. 1981).
“Under § 171(1) of the act, MCL 418.171(1); MSA 17.237(171X1), whenever an employer who is subject to the act (referred to as the "principal”) contracts with another who is either not subject to the act or who is otherwise uninsured for purposes of workers’ compensation (referred…”
— Mich. Comp. Laws § 418.171(3) — 1 case
David J McQueer v. Perfect Fence Co., 917 N.W.2d 584 (Mich. 2018).
“611 by failing to procure workers’ compensation coverage for him and had violated MCL 418.171 by encouraging him to pose as a nonemployee.”
— Mich. Comp. Laws § 418.171(4) — 3 cases
David J McQueer v. Perfect Fence Co., 917 N.W.2d 584 (Mich. 2018).
“611 by failing to procure workers’ compensation coverage for him and had violated MCL 418.171 by encouraging him to pose as a nonemployee.”
Mccaul v. Modern Tile & Carpet, Inc, 640 N.W.2d 589 (Mich. Ct. App. 2002).
“These findings support the wcac’s conclusion that plaintiff ran his own business and was therefore not an employee under § 161 of the WDCA. Id. 6 In a related argument, plaintiff asserts that he is entitled to benefits because defendant is his “statutory employer” pursuant to…”
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