Understanding Dual Employment Under the Workers’ Compensation Act

The landscape of employment has significantly evolved, with many individuals now juggling multiple jobs to meet financial needs or pursue diverse interests. This phenomenon, known as dual employment, raises unique considerations when it comes to workplace injuries and the application of the Workers’ Compensation Act. In this article, we’ll explore how dual employment impacts workers' compensation claims, the obligations of employers, and the rights of employees under this legal framework.

What is Dual Employment?

Dual employment occurs when a person holds two or more jobs simultaneously with different employers. These roles may vary in nature—one job could be full-time while the other is part-time, or both may be part-time. This type of employment is increasingly common, particularly in industries such as retail, food service, and gig-based work (like ridesharing and delivery services).

Workers’ Compensation Act Overview

The Workers' Compensation Act is designed to provide medical care, wage replacement, and other benefits to employees who suffer work-related injuries. It’s a no-fault system, meaning employees are entitled to compensation regardless of who was at fault for the injury.

In a traditional single-employment scenario, the process is straightforward: an employee injured at work files a claim with their employer’s workers' compensation insurance, and the injury is treated as arising from that employment. However, dual employment complicates matters, particularly when it comes to determining the amount of wage loss benefits the injured worker is entitled to.

Key Issues in Dual Employment Under Workers' Compensation

1.        Determining Liability: Which Employer is Responsible?

If an employee is injured while performing their duties for one employer, that employer’s workers’ compensation insurance is typically responsible. For instance, if a person working both as a delivery driver and a retail cashier sustains an injury while on a delivery, the delivery company’s insurance would cover the injury.

However, complexities arise if the injury is linked to or aggravated by both jobs. Courts may look at the nature of the injury and whether both employments contributed to the condition. In such cases, the injury may be classified as a “cumulative injury,” making both employers potentially liable under certain circumstances.

2.        Wage Calculations: Impact on Benefits

Workers’ compensation benefits are generally based on the injured worker’s average weekly wage (AWW) at the time of the injury. For dual employees, calculating the AWW can be challenging.

In Michigan, the AWW includes wages from both/all jobs. In these cases, wage replacement benefits could be higher as they reflect the total income the employee was earning.

Further complicating matters, the State of Michigan will reimburse the employer who pays the wage loss benefits if that employer’s share of the AWW is less than 80% of the total. This can be a painfully slow process, as employers and their insurance carriers will not typically issue payment for wage loss benefits associated with a second or third job unless and until the State confirms the amount they will reimburse.

3.        Lost Earning Capacity and Return-to-Work Complications

Dual employment also presents challenges when considering an injured worker’s ability to return to work. For example, if an injury prevents the worker from performing one job but not the other, partial wage loss benefits may be awarded based on the loss of earning capacity from the affected job.

Additionally, employees might face difficulty returning to one of their jobs if physical demands differ between the two roles. Workers' compensation might provide vocational rehabilitation or other support if the injury affects the employee’s ability to continue in one line of work, but not necessarily in both.

Conclusion

Dual employment complicates workers' compensation claims, but the Workers' Compensation Act provides mechanisms to ensure that injured employees receive appropriate benefits. Employees and employers alike should be aware of the legal implications and the need for clear communication to navigate these claims effectively. With the rise of gig work and flexible employment arrangements, dual employment cases under workers’ compensation laws are likely to become increasingly prevalent, making it essential for all parties to understand their rights and responsibilities.