Cavanagh, J.
We granted leave in these consolidated cases to decide the constitutionality of 1987 PA 28, §354(17X20), MCL 418.354(17X20); MSA 17.237(354)(17)-(20). This statute prohibits the coordination of workers’ compensation benefits for employees who were injured before the eifective date of 1981 PA 203. It also requires the repayment plus interest of all benefits withheld as a result of coordinating benefits between 1982 and 1987 from disabled employees whose injury dates were before 1982. We hold that the amendments of the Workers’ Disability Compensation Act contained in 1987 PA 28, § 354(17)-(20) are constitutional exercises of legislative power retroactively modifying benefit levels for a legitimate purpose furthered by ra[521]*521tional means. We also hold that the statute does not abrogate any vested rights of the employers. The statute may validly be applied to all compensation liabilities within its terms except those which have been reduced to final judgment before its enactment.
FACTS AND PROCEDURAL HISTORY
The plaintiffs were injured before 1981. In 1981, the Legislature enacted 1981 PA 203 which included the coordination of benefits provision of § 354, MCL 418.354; MSA 17.237(354). This section allowed coordination of workers’ compensation benefits with employer-funded pension plan payments. This statute was part of a legislative reform package involving a series of related amendments of the workers’ compensation statute. The coordination provisions were an essential component of a compromise plan that restructured benefits payable to disabled workers. The resources saved as a result of this coordination were reallocated by the statute to increase benefit levels generally, from two-thirds of the average weekly wage to eighty percent of after-tax wages, effective for injuries occurring after January 1, 1982.
The plaintiffs were subjected to these coordination provisions even though the statute was silent regarding its application to claims resulting from injuries occurring before its 1982 effective date. On September 28, 1983, General Motors Corporation informed plaintiff Romein that he had been overpaid $75.03 per week from January 1, 1982, because of the corporation’s failure to coordinate benefits under 1981 PA 203, § 354, as of its effective date. Thus, the corporation began to deduct the amount of this "overpayment” of $3,913.57 from compensation benefits as they became due [522]*522and payable. The corporation also began coordinating future benefit payments by deducting pension and social security benefits from the workers’ compensation payments due, resulting in a thirty-five percent reduction of benefits actually paid. This resulted in a reduction of $132 a week. His total benefits were reduced from $19,377.80 to $12,513.80 per year. Plaintiff Gonzalez experienced an even more dramatic reduction in his workers’ compensation benefits. The Ford Motor Company informed Gonzalez that it would begin coordination of his benefits in accordance with § 354 resulting in the withholding of his entire $176 weekly payment beginning March 31, 1982.
Between January 1, 1982, and October 7, 1985, the legality of coordination of benefits for injuries which occurred before the effective date of 1981 PA 203, § 354, was in doubt. The Legislature expressed its view that the initial, lower court decisions1 permitting application of § 354 coordination rights only to claims arising from injuries occurring after the effective date of § 354 were correct.2
The defendants’ efforts to coordinate plaintiffs’ benefits under § 354 received judicial acceptance in 1985 when this Court reversed the lower court in Chambers v General Motors Corp, 422 Mich 636; 375 NW2d 715 (1985). The Court applied principles of statutory interpretation to hold that § 354 permitted coordination of benefits regardless of the date of injury since the Legislature did not state an intent to apply the provision only to benefits [523]*523paid to employees whose injuries occurred after its effective date.
Thereafter, the Legislature enacted 1987 PA 28 which clearly indicated that the coordination of benefits provision of 1981 PA 203 was not intended to reduce benefits for injuries which occurred before the effective date of the 1981 statute. This statute retroactively amended § 354 and prevented any coordination of benefits for claims arising from injuries which occurred before March 31, 1982.
The first provision of 1987 PA 28 states that it is the Legislature’s intent to prohibit the coordination of benefits for pre-March 31, 1982, injuries.3 Another provision of the act requires that any setoffs which have been made by employers between March 31, 1982, and May 14, 1987, be refunded to employees, with interest. Thus, any benefits that were reduced under the coordination provisions of § 354, are deemed by statute to have been "underpayments” of workers’ compensation benefits and must be refunded within sixty days with interest.4 In addition, if the employee had [524]*524repaid money to the employer for benefits received that the employer alleged should have been coordinated, 1987 PA 28 requires the employer to reimburse the employee, with interest, within sixty days.5
The issue before the Court is whether the Legislature has violated the defendants’ constitutional rights under the Due Process or Contract Clauses of the state and federal constitutions by retroactively altering the level of benefits due and payable prior to the amendment. We must also decide whether this retroactive alteration of benefits violates the Separation of Powers and One Court of Justice Clauses of the Michigan Constitution.
i
The defendants contend that 1987 PA 28, § 354(17)-(20) violates the Due Process Clauses of the United States and Michigan Constitutions by retroactively imposing liability for additional workers’ compensation benefits for past compensable periods. They contend that they relied on the coordination provisions of § 354 during the period between its effective date of March 31, 1982, and [525]*525the amendment date of May 14, 1987, and that this reliance gives them a vested right to have their liability for those periods determined by the law then in effect.
The defendants argue that 1987 PA 28 is "purely retroactive” and unconstitutionally impairs rights under executed contracts of employment.
The defendants urge that this statute is "purely retroactive” because it not only applies to injuries arising before the effective date of the act, but also modifies the employer’s liability for a preenactment compensable period. Thus, this statute is different from the one upheld in Chambers.
We hold that the challenged statute satisfies the rational relationship test and does not abrogate any vested rights of the employers. The statute, therefore, does not violate the Due Process Clauses.
A
A rational basis standard of review governs this Court’s scrutiny of the legitimacy of social and economic legislation.
"It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way. See, e.g., Ferguson v Skrupa, 372 US 726 [83 S Ct 1028; 10 L Ed 2d 93] (1963); Williamson v Lee Optical Co, 348 US 483, 487-488 [75 S Ct 461; 99 L Ed 563] (1955).” [Pension Benefit Guaranty Corp v R A Gray & Co, 467 US 717, 729; 104 S Ct 2709; 81 L Ed 2d 601 (1984).]
The rational basis test has been applied to the [526]*526retroactive portions as well as to prospective portions of statutes modifying workers’ compensation benefit levels. Pension Beneñt Guaranty Corp, supra.
To apply a stricter standard of review to a workers’ compensation statute simply because it operates retroactively would put the judiciary in the business of "allocating] the interlocking economic rights and duties of employers and employees upon workmen’s compensation principles” although this is a task within the province of the Legislature. Usery v Turner Elkhorn Mining Co, 428 US 1, 15; 96 S Ct 2882; 49 L Ed 2d 752 (1976), citing New York Central R Co v White, 243 US 188; 37 S Ct 247; 61 L Ed 667 (1917).
B
A workers’ compensation statute will not be deemed unconstitutional simply because it imposes "a new duty or liability based on past acts,” Usery, supra at 16. The Usery decision upheld the constitutionality of title IV of the Federal Coal Mine Health and Safety Act of 19696 against a Due Process Clause challenge by applying only minimal judicial scrutiny to its retroactive provisions. The statute retroactively imposed liability on employers for injuries which occurred years before its enactment. The law was retroactive in two respects. First, it altered the legal status of completed transactions by requiring the compensation of employees who left the industry before the effective date of the act. Second, it imposed liability on coal mine owners for injuries suffered before the date of the new statute.
The Court in Usery, supra at 16-17, cautioned that: "It does not follow, however, that what Con[527]*527gress can legislate prospectively it can legislate retrospectively. The retrospective aspects of legislation, as well as the prospective aspects, must meet the test of due process, and the justifications for the latter may not suffice for the former.” The justification for retrospective legislation must take into account the possibilities that the parties acted in reliance on current law and that they may have altered their conduct to reduce liability if they had anticipated the imposition of later liability.7 The coal mine operators could not have altered their conduct to avoid retroactive liabilities arising from injuries occurring before 1950 because at that time there was no understanding of the causal relation between the exposure to coal dust and black lung disease. Thus, the injuries arising before the enactment of the statute could not have been foreseen or avoided.8
It is similarly unlikely that the defendants in this case would have altered their course of conduct and paid full benefits merely to avoid the potential liability from a later change in the law. This is especially true since they would have been unlikely to recoup these amounts from the employees if the coordination provisions were later upheld for pre-1982 injuries.9 The employers acted in their own best economic interests at the time.
As in Usery, where the employer was required [528]*528to pay benefits to former employers, the form of retroactive application at work here imposes liability for past, completed acts since the payments have already been made. These payments created an expectation in the employers that the payment periods were completed transactions. The employers in Usery also argued that the statute was purely retroactive in that it required payment to miners who left employment in the industry before the effective date of the act, i.e., past, completed transactions.
Admittedly, the employers in this case held an expectation that the payments were completed transactions. We do not accept, however, their contention that if parties have patterned their past conduct in reliance on past law, they have a vested right to have the legality of that conduct determined under law then in effect. The rational relationship test applies to economic legislation whether it is retroactive or not. The retroactive aspects of legislation must meet the test of due process, "[b]ut that burden is met simply by showing that the retroactive application of the legislation is itself justified by a rational legislative purpose.” Pension Benefit Guaranty Corp, supra at 730. The Court in Usery held that the retroactive portion of the statute was justified "as a rational measure to spread the costs of the employees’ disabilities to those who have profited from the fruits of their labor—the operators and the coal consumers.” Usery, supra at 18.
The retroactive portions of the statute challenged here are justified by a rational legislative purpose to protect the benefit levels of workers who did not receive the increases in the legislative reform packages of 1980 and 1981. Since they did not receive the increase, remedial measures were [529]*529needed. These amendments served a rational legislative purpose to alleviate this hardship.
The United States Supreme Court has upheld retroactive liability even where the employers acted in reliance on existing law. In Pension Benefit Guaranty Corp, supra at 729, the Court upheld the retroactive application of the Multiemployer Pension Plan Amendments Act of 1980.10 The statute modified the terms of a governmentally provided program of insurance designed to insure that the termination of a pension plan would not result in insufficient funds to pay employees their anticipated benefits. Employers paid premiums for the benefit of this government subsidized insurance program. The act imposed a new obligation on employers who terminated their plans to pay a proportionate share of the plan’s "unfunded vested benefits.” This new withdrawal liability was made retroactive for five months preceding the enactment of the amendments.* 11
The United States Court of Appeals for the Ninth Circuit found that the retroactive provisions of the act violated due process rights12 because the employers had legitimately relied on existing law upon withdrawing from pension plans, but the United States Supreme Court reversed. The Court concluded that Congress could impose the act retroactively because the retroactive portion was a rational means to further a legitimate end, namely, "to prevent employers from avoiding the [530]*530adverse consequences of [the newly enacted] withdrawal liability . . . Id. at 723.
The defendants seek to distinguish Usery and Pension Beneñt Guaranty Corp by arguing that the retroactive provisions of 1987 PA 28 are materially different from the workers’ compensation and pension liabilities imposed by the statutes addressed in those two cases. The defendants argue that the statute in Usery only prospectively mandated the payment of new compensation obligations and so did not impose new liabilities for past compensable periods as does 1987 PA 28. But as to those miners in Usery who had left employment in the industry before the effective date of the act, the liability for past, completed transactions was altered. Additionally, the form of retroactivity does not alter the relevant test for assessing a due process violation. The payments at issue here are "purely retroactive” in that they apply to payments for past injury and they apply to payments that were already paid for past compensable periods. We cannot say, however, that the form chosen by the Legislature was arbitrary or unreasonable.
To determine if the retroactivity is arbitrary or unreasonable, the party’s reliance on the preexisting state of the law should be considered.13 Thus, we must address the extent of the defendants’ justifiable reliance on the coordination provisions of the prior statute repealed by 1987 PA 28.
We are not persuaded that the defendants’ reliance on the coordination provisions was reasonable.
The defendants cannot claim a reliance interest on rights created by the workers’ compensation [531]*531statute that are more deserving of constitutional protection than the reliance interest of the employers who incurred retroactive liabilities under the pension law upheld in Pension Benefit Guaranty Corp, supra at 727. In both instances, the employers were on notice of the legislative debate regarding the proposed changes in the law. Reliance on an area of law that is in a state of flux is not reasonable reliance.
There are no vested rights in the amount of liability established at the time of an injury. The Legislature possesses the authority to enact workers’ compensation laws that " 'increase the burden on the employer for disability or expenses occurring or continuing after the date of enactment of the amendatory statute, even though the accident which gave rise to the disability or expenses had occurred prior to that time.’ ” Lahti v Fosterling, 357 Mich 578, 592; 99 NW2d 490 (1959), citing Hogan v Lawlor & Cavanaugh Co, 286 AD 600; 146 NYS2d 119 (1955).14
This Court has held that a remedial statute which acts retroactively does not violate due process so long as it does not impair vested rights.15 The statute challenged here does not violate this principle for several reasons. First, from the context in which the statute was passed, it is clear that the Legislature was modifying the coordination of benefits provision to cure a perceived defect resulting from the interpretation of the prior law [532]*532in Chambers, supra. Therefore, the amendment is remedial.
Second, the defendants have no vested rights in the finality of the coordinated benefits paid. The retroactive liability imposed by 1987 PA 28 does not abrogate a vested or contractual right of the employers since workers’ compensation benefits and liabilities are statutory in origin and may be revoked or modified at the will of the Legislature. See Lahti, supra at 589. The United States Supreme Court has held that an employer’s interest in the rate of compensation is not a right that is absolutely vested for purposes of the Due Process Clause:
[Certain] vested economic rights are held subject to the Government’s substantial power to regulate for the public good the conditions under which business is carried out and to redistribute the benefits and burdens of economic life.[16]
Finally, the 1987 amendment only modifies the source of funds from which an employer may satisfy a workers’ compensation award. The entitlement to benefits was established before the enactment of the original coordination of benefits statute. The amendment does not create a new entitlement conferring a disability status not provided under prior law. In White v General Motors Corp, 431 Mich 387, 395-396, n 7; 429 NW2d 576 (1988), this Court recognized that the retroactive increase of the amount of benefits owing to a disabled employee differs qualitatively from a statute altering the terms of a claimant’s eligibility for benefits. Thus, the defendant’s assertion that the amount of benefits specified by statute is a [533]*533vested right and cannot be retroactively modified is unsupported by case law.
We hold, therefore, that 1987 PA 28 is constitutional even though it applies to benefits due and payable for a period before the effective date of the statute. We hold further that only judgments entered under former law are immune from this legislative modification. This limitation protects the vested rights that form in reliance on an award at the moment it is reduced to a final judgment.
n
Having found no violation of the Due Process Clauses, we must now decide if 1987 PA 28 violates the Contract Clause, US Const, art I, § 10. The defendants contend that the retroactive provisions violate the Contract Clause because they revive liabilities of employers that were fully discharged by completed transactions in reliance on state law. We hold that the contention lacks merit primarily because the expectation at issue here is not protected by the Contract Clause.
Further, even if the benefit levels were construed as a contractual right, the law serves a significant and legitimate public purpose and it employs reasonable means sufficient to survive a Contract Clause challenge.
The defendants cannot rely on the level of benefits existing at the time of an injury as a legitimate contractual expectation protected by the Contract Clause. Lahti, supra at 590-592.
Additionally, in Chambers, this Court reiterated the established principle that benefits and liabili[534]*534ties in the workers’ compensation statute do not create rights protected by the Contract Clause. Chambers, supra at 654, citing Shavers v Attorney General, 402 Mich 554; 267 NW2d 72 (1978), and Lahti, supra at 591-592.
Even though we hold that the Contract Clause does not apply to the benefits at issue here, the retroactive provisions would survive a Contract Clause challenge. While the Contract Clause prohibits any state law from impairing the obligations of contract, this prohibition must be "accommodated to the inherent police power of the State 'to safeguard the vital interests of its people.’ ” Energy Reserves Group, Inc v Kansas Power & Light Co, 459 US 400, 410; 103 S Ct 697; 74 L Ed 2d 569 (1983). The prohibition, therefore, is not absolute. To test for the valid accommodation of the Contract Clause and the state’s police power, the United States Supreme Court has established a three-pronged test. The first prong is to determine "whether the state law has, in fact, operated as a substantial impairment of a contractual relationship.” Allied Structural Steel Co v Spannaus, 438 US 234, 244; 98 S Ct 2716; 57 L Ed 2d 727 (1978).
The impairment in this case cannot be deemed a substantial one. The workers’ compensation statute substitutes a remedial scheme of compensation for injuries otherwise subject to recovery in tort actions for the negligent acts of employers in the workplace. The employers benefit from this scheme by obtaining a definite limit on their liability for workplace injuries. Since the impairment complained of in this case does not alter this basic benefit to the employer, it cannot be said to be substantial.
One factor in determining the extent of the impairment is the degree of regulation in the [535]*535industry the complaining party has entered.17 The party to a contract who has entered into a highly regulated industry may not remove their contract from state restrictions merely by making a contract purportedly immune from legal limitation. Energy Reserves Group Inc, supra at 411, citing Hudson Co Water Co v McCarter, 209 US 349, 357; 28 S Ct 529; 52 L Ed 828 (1908). The workers’ compensation statute regulates a field of commerce that has been subject to a wide-ranging and comprehensive scheme of government regulation. In this scheme the parties occupy a status that subjects them to certain retroactively imposed rights and liabilities. Lahti. The defendants knew that their rights were subject to alteration. In addition, the legislative resolution in early 1982 purporting to interpret §354 put the defendants on notice that the Legislature might seek to prevent the coordination of benefits for pre-1982 injuries if efforts to achieve this result failed in the courts. Since the employer was aware of the likely alteration of the coordination of benefits provision, the impairment cannot be deemed substantial.
To the extent, if any, that contractual interests are impaired, the second prong of the Contract Clause test requires that there be a legitimate public purpose for the regulation. This requirement guarantees that rather than merely providing a benefit to special interests, the state is validly exercising its police power. There is a significant state interest in protecting the right of disabled employees to receive the full compensation intended by the Legislature in return for the relinquishment of their tort claim._
[536]*536It is significant that in the 1981 amendment, the resources saved as a result of coordination of benefits were reallocated to increase benefit levels generally. These increased levels, however, were only for injuries after January 1, 1982. The Legislature could have reasonably found that the coordination of benefits caused hardship among the employees whose injury dates were before 1982 since these employees were not entitled to the overall increase of benefits provided for those injured after 1982. There was a legitimate state interest, therefore, in correcting this perceived inequity.
The final prong of the Contract Clause test examines the means by which the contracting parties’ rights and responsibilities are adjusted. The means chosen here are reasonable in the light of deference given to legislative action. "As is customary in reviewing economic and social regulation . . . courts properly defer to legislative judgment as to the necessity and reasonableness of a particular measure.” United States Trust Co v New Jersey 431 US 1, 22-23; 97 S Ct 1505; 52 L Ed 2d 92 (1977). The means are also reasonable since the statute imposes no more retroactive liability than is necessary to remedy an unexpected circumstance relating to the interpretation of a prior statute. The judicial interpretation that allowed for the setoff was deemed to be incorrect and the setoff must be returned, not an unreasonable solution.
We find that 1987 PA 28 serves a legitimate state interest in protecting the benefits of disabled employees through reasonable means sufficient to survive a Contract Clause challenge.
hi
Turning to the Separation of Powers and One [537]*537Court of Justice argument, we do not read the provisions of 1987 PA 28, § 354(17)-(20), as violating either art 3, § 2 or art 6, § 1 of the Michigan Constitution. The operative provisions of the statute do not encroach upon the sphere of the judiciary. Rather, they merely repeal the act that Chambers construed. That prior statute is superseded by 1987 PA 28 and the amendatory act expressly indicates that it is to be applied retroactively. This enactment is a valid exercise of the Legislature’s authority to retroactively amend legislation perceived to have been misconstrued by the judiciary. Such retroactive amendments based on prior judicial decisions are constitutional if the statute comports with the requirements of the Contract and Due Process Clauses of the federal and state constitutions, and so long as the retroactive provisions of the statute do not impair final judgments.
Numerous courts have recognized that the Legislature may cure, the judicial misinterpretation of a statute. For instance, the federal courts have upheld statutes that retroactively abrogate statutory rights, at least where the repealing statute does not impair final judgments.18 In Seese v Bethlehem Steel Co, 168 F2d 58, 62 (CA 4, 1948), the court reasoned that the Legislature’s enactment of a retroactive statute repealing the effects of a prior judicial decision is not an exercise of judicial power:
When the Fair Labor Standards Act was interpreted by the Supreme Court as requiring computation in the work week of time consumed in walking to work and other preliminary activities, [538]*538this was just as though the original act contained express provision to that effect; and, when Congress passed the sections of the statute here under consideration, the effect was to repeal the original statute to the extent of that coverage and deny to the federal courts jurisdiction to entertain a suit based thereon. This does not in any manner affect adjudications already made, nor does it attempt to direct the courts in the exercise of judicial power. All that it does is to define rights, i.e., to amend or limit the effect of a prior statute so as to take away a cause of action given by it.[19]
Similarly, in Long v United States Internal Revenue Service, 742 F2d 1173 (CA 9, 1984), subsequent proceedings vacated on other grounds 487 US 1201; 108 S Ct 2839; 101 L Ed 2d 878 (1988), the court upheld a statute that abolished the plaintiff’s right to obtain disclosure of certain irs data, although such disclosure rights had been created by a previous federal appellate decision interpreting a statutory exemption to the Freedom of Information Act. In upholding the Congressional repeal of this exemption against due process challenge, the Court articulated a principle that is useful in resolving the separation of power claim presented here:
Courts have consistently upheld the retroactive application of "curative” legislation which corrects defects subsequently discovered in a statute and which restores what Congress had always believed the law to be. [Id. at 1183.]
Indeed, if the defendants’ separation of powers claim had merit as applied to the curative statute challenged here, the power of the Legislature to enact curative and remedial legislation would be [539]*539severely curtailed, even where the statute does not violate constitutional due process limits.20 This would represent a judicial usurpation of what is properly a legislative function.21
Finally, we conclude that §354, as originally enacted in 1982, gave employers the right to coordinate benefits when an employee received a duplicate recovery through the receipt of other employer-funded benefits. Thus, employers may have properly exercised this right by withholding compensation benefits due and payable between the date of decision of Chambers in 1985 and the repeal of these provisions in 1987. An employer’s act of withholding benefits, however, does not have the status of a final judgment.22
CONCLUSION
The employers’ right to coordinate benefits as provided by statute in 1982 was repealed by 1987 PA 28 through a constitutional exercise of legisla[540]*540tive authority to regulate social and economic life. We hold that 1987 PA 28 does not violate the Due Process Clauses of the state and federal constitutions, the Contract Clause of the federal constitution, or the Separation of Powers Clause of the Michigan Constitution, so long as it is not applied to impair coordination rights that were reduced to final judgment before its effective date.
Accordingly, we affirm the decision of the Court of Appeals.
Levin, Boyle, and Archer, JJ., concurred with Cavanagh, J.