Dispute over premiums for Michigan Workers’ Disability Compensation Act (WDCA) (MCL 418.1 et seq.) insurance; Test for determining “employee” status; MCL 418.161(1)(n) (amended by 2011 PA 266); Whether the drivers were “employees” or “independent contractors” under Michigan law; Elde v. Castles Bros., Inc.; Auto-Owners Ins. v. All Star Lawn Specialists Plus, Inc.; Hoste v. Shanty Creek Mgmt., Inc.; “Damages-premium calculation”; Smith v. Manausa; Michigan Worker’s Compensation Placement Facility Basic Manual for Worker’s Compensation & Employers’ Liability Insurance (Facility’s Manual); MCL 418.371; Summit Petroleum Corp. of IN v. Ingersoll-Rand Fin. Corp.; Michigan Administrative Hearing System (MAHS)

[This appeal was from the WD-MI.] The district court in this workers’ compensation insurance premium dispute did not err by finding that the drivers operating under the lease-to-buy program were plaintiff-Max Trucking’s “employees” under Michigan’s WDCA three-part test, and by awarding the defendant-insurer damages for unpaid premiums. The district court properly relied upon § 161(1)(n)’s three-part test to determine the drivers’ status and not on the 20-factor IRS test (the Revenue Test) in the amendatory language of § 161(1)(n). “[T]he amendatory language limits use of the Revenue Test to determinations of employment status made in administrative proceedings before” the MAHS, and this case did not come to the court “by way of the MAHS, but rather by way of an insurance premium dispute . . . .” The court concluded that “the Revenue Test did not supplant the three-part test.” Even though “under the amendatory language issuance of a W-2 is prima facie evidence of employee status, issuance of a 1099 is not prima facie evidence of independent contractor status under 161(1)(n).” Under Michigan law, “in order to be deemed an employee under 116(1)(n), a person must show that he or she: (1) does not maintain a separate business; (2) does not hold himself or herself out to render services to the public; and (3) is not an employer subject to the WDCA.” The court noted that the Michigan Supreme Court’s overruling of the special panel in Auto-Owners did not affect the district court’s ruling because the district court found that every criterion of MCL 418.161(1)(n) was met. The court agreed that the drivers in the lease-to-buy program were “‘effectively economically dependent on Max Trucking for their ability to operate as truckers.’” Their “complete dependence indicates that the lease-to-buy drivers cannot be considered to maintain separate businesses.” Reliance on the “economic reality” test was “inappropriate” where “the Michigan Legislature amended the definition of employee in the WDCA by adding the current three-part test to the first sentence of 161(1)(n).” The district court did not err when calculating the damages premium under the Facility’s Manual and awarding defendant $101,592 for unpaid premiums. Affirmed.