As Michigan employers prepare for another busy summer internship season in 2025, many are welcoming interns to support growing workloads. While most internship experiences will proceed without issue, some employers may face a difficult question: If an intern is injured on the job, are they eligible for Michigan workers’ compensation benefits?
The answer is not straightforward. Determining whether an intern is eligible for Michigan workers’ compensation benefits involves a detailed legal and factual analysis. With limited statutory guidance and evolving case laws, the best answer remains: It depends.
The Legal Landscape in 2025
The issue of whether an intern who is injured on the job is entitled to Michigan workers’ compensation benefits hinges on whether the intern is an “employee” for purposes of the Michigan Workers’ Disability Compensation Act (the “Act”). Section 418.161(1) of the Act defines “employee,” but does not specifically mention interns.
One narrow statutory exception exists. Subsection 161(1)(m) states that individuals participating in federally funded work or training programs – when those programs require the provision of appropriate workers’ compensation – are considered employees of the sponsoring governmental body. These interns are entitled to benefits if their program meets all the statutory requirements and if the employer has secured proper insurance under Chapter 6 of the Act.
Outside this subsection, most internships fall into the legal gray area.
Court Guidance: The Importance of “Mutual Benefit”
Michigan courts have filled some of the statutory gaps by focusing on whether there is a mutual benefit between the intern and the organization. This concept has played a central role in prior cases such as:
- Macarthur v. Ramsey Havenwyck (unpublished) – The Court of Appeals ruled that an intern who exchanged services for academic credit was an “employee” under the Act. The court emphasized the mutual benefit: the intern received clinical training required for her degree, while the hospital gained counseling services.
- Betts v. Ann Arbor Public Schools – An older Michigan Supreme Court case that reached a similar conclusion using the economic reality test. It confirmed that an exchange of services for academic training or credit may satisfy the "contract for hire" requirement under the Act.
The 20-Factor Test: Still Waiting for Clarity
Despite its adoption by the Michigan Legislature in 2013 to distinguish between employees and independent contractors, the IRS 20-factor test has not yet been applied in any Michigan appellate decision involving interns. However, many of the test’s criteria—such as control, training, supervision, and financial dependency—could support a finding of employee status when an internship includes structured training or required hours. Under workers’ compensation law, the IRS 20-factor test is a tool used to evaluate the degree of control an employer has over the worker. The more control, the more likely a court is to determine that a worker is an employee and not an independent contractor.
In practice, when the intern-employer relationship involves mutual benefit and supervision, courts are likely to find an employment relationship – even if the intern is unpaid.
Practical Takeaways for Employers in 2025
Internship programs are great for so many reasons. And, while rare, it is important to know how to assess an intern sustaining an injury at work.
- Assess the structure of your internship program. If the intern is providing valuable services and receiving training or credit, courts may view the arrangement as employment providing the employer with protection from tort by the exclusive remedy provision in MCL 418.131. In addition, determining whether to pay or not to pay an intern is an important legal decision and must be thoroughly reviewed. The Department of Labor has published an overview, but not paying an intern who should be classified as an employee can result in significant penalties and financial exposure. See: https://www.dol.gov/agencies/whd/fact-sheets/71-flsa-internships
- Don’t rely on unpaid status alone. Being unpaid does not automatically exclude an intern from employee classification. In addition, even if an employee agrees to be unpaid, does not avoid the potential for misclassification and potential for unpaid wages and associated taxes.
- Watch for developments. Michigan law in this area is evolving, and employer practices should adapt accordingly. Staying informed and proactively managing legal risk is the best way to protect both interns and your organization.
