Operating a business in Michigan comes with some key compliance requirements that employers need to adopt a strong understanding of in order to avoid certain challenges, or worse.
Here is everything employers need to know about labor laws in Michigan:
Michigan labor laws cover the following key areas:
Michigan hiring laws primarily revolve around new hire reporting.
Michigan employers are required to report details on newly hired, or rehired, employees to the Michigan Office of Child Support (OCS) through the Michigan New Hires Operation Center.
Reporting must be completed within 20 days of the date of hire.
This information is used in child support cases to help locate parents, establish court orders for support, or enforce existing support orders.
Employers will need the following employer and employee information:
While Michigan does not have a statewide “Ban-the-Box” law for private-sector employers, the state does have a “Ban-the-Box” law for state job applications. Specifically, the law removes the question “Have you been convicted of a felony?” from applications.
With the passing of the law in 2018, private-sector employers have been encouraged (not required) to also remove these questions from applications.
Michigan wage and hour laws include topics such as minimum wage, overtime, and equal pay.
Michigan minimum wage is established by the Improved Workforce Opportunity Wage Act (IWOWA). The state includes minimum wage rates for tipped workers, minors, employees in training, as well as a standard rate for all other workers in the state.
Michigan minimum wage can be broken down as follows:
Also covered under the IWOWA, employers must be compensated at 1.5 times their normal rate of pay for all hours worked over 40 in a workweek.
There are certain exceptions, but generally employees not covered by the IWOWA are subject to Fair Labor Standards Act (FLSA) overtime rules.
Exemptions include:
Michigan’s Payment of Wages and Fringe Benefits Act (PWFBA) establishes regulations for employers taking legally authorized and voluntarily agreed-upon deductions from employee pay.
Common deductions in Michigan include:
The law specifies that employers may deduct for overpayments of wages or fringe benefits due to mathematical or typographical errors under special conditions.
The PWFBA also requires employers to provide employees with a retainable pay statement.
These statements must include the following information:
Michigan employers are required to deliver employee paychecks using one of the following methods:
Also governed by the PWFBA, Michigan employers are required to pay employees on one of the following pay frequencies:
Employers are required to deliver final paychecks to employees on the next regularly scheduled payday for the last pay period the employee worked before quitting or otherwise being terminated.
Michigan law does not require employers to pay out fringe benefits (unused PTO, etc,) upon termination, but employers are required to honor any agreements to do so made during employment or upon hiring.
There are no state laws requiring meal and rest breaks in Michigan.
However, the state does follow federal requirements, which generally state:
Michigan child labor laws are established under the Michigan Youth Employment Standards Act (YESA), and cover key areas such as:
Michigan employers are required to track hours worked to ensure compliance, and should be aware of the following key restrictions:
In order to work in the state, minors must obtain a valid work permit through the State of Michigan’s centralized work permit system, overseen by the Wage and Hour Division, as of October 1st, 2026.
School officials must still approve and then issue the permit, which must list the specific employer and job.
Employers are responsible for ensuring that minors do not perform certain dangerous tasks.
Examples include:
In Michigan, employers must have an employee who is 18 or older working at all times, supervising any minor employees while working.
Employers are required to post YESA notices in an easily accessible location in the workplace at all times.
Employers are also required to maintain accurate time records for each employee, as well as keep work permits on file.
Apart from compliance with the Federal Family and Medical Leave Act (FMLA), the only type of mandated leave in Michigan is that which is established by the Michigan Earned Sick Time Act.
The Michigan Earned Sick Time Act (ESTA) covers all employers in the state that have one or more employee(s), including any person, firm, business, educational institutions, corporations, limited liability company, government entities, excluding the United States Government.
Covered employers are required to provide paid sick leave to all employees.
All employers must adhere to the following requirements:
There is one key difference in requirements that is dependent on the size of the employer, relating to implementing limits on how much paid sick leave an employee may use in a calendar year:
Employers may choose to implement higher limits than those outlined by the law, but no less than 40 and 72 hours, respectively.
Workplace safety regulations are established and administered by the Michigan Occupational Safety and Health Administration (MIOSHA).
Specifically, MIOSHA has adopted standards for:
Apart from Federal Anti-Discrimination Laws for employers, Michigan businesses must maintain compliance with the Elliott-Larsen Civil Rights Act, as well as Equal pay provisions under the IWOWA.
The Elliott-Larsen Civil Rights Act establishes key requirements and regulations to prohibit and prevent discrimination in employment in the state of Michigan.
That act includes key provisions regarding:
Under the IWOWA, employers are prohibited from discriminating against an employee on the basis of sex when it comes to compensation for jobs requiring equal skill, effort, and responsibility performed under similar working conditions.
Any disparities in pay must be able to be proven as a result of a seniority system, merit system, another system measuring earnings on the basis of quantity or quality of production, or any other differential other than sex.
Workers’ Compensation in Michigan is administered by the Michigan Department of Labor and Economic Opportunity, Workers’ Disability Compensation Agency, and generally covers most employees.
Employers covered by the Michigan Workers' Disability Compensation Act are required to provide some way of assuring that benefits are paid to their workers if they become injured while on the job. Generally, this is done by obtaining a Workers’ Compensation Insurance Policy.
Most employers are covered by the Workers' Disability Compensation Act. Exceptions include:
Employees who are disabled, or die as a result of a work-related injury or disease, must be compensated with benefits paid by the employer, either directly or through an insurance carrier.
Benefits can include:
The Michigan Unemployment Insurance Agency (UIA) establishes and administers the unemployment insurance program for the state. Employers with covered employees are required to register for an employer account.
Michigan has one of the more complex unemployment insurance tax rates in the country. While new employers have a standard rate of 2.7% for the first two years of liability, the rate changes in the third, fourth, and fifth years of liability.
For some employers, the unemployment tax rates can be challenging to calculate. Consider reaching out to a Michigan Payroll Company with experience in handling state taxes for help.
The current maximum weekly benefit is $530 per week, while the dependent benefit rate is $19.99, up to five dependents.
Effective January 1st, 2027, these rates will increase to $614 and $26, respectively.
Effective July 2026, the following updates took place regarding Michigan unemployment insurance:
Michigan employers must maintain certain records and workplace posters / notices in order to maintain compliance.
Michigan employers are required to keep general payroll and wage records for up to three years. This includes:
Employers must also keep the following tax, unemployment, and safety records:
Employers are also required to maintain accurate time records for each minor employee, as well as keep work permits on file, so long as the minor is employed (and stays a minor).
Employers in Michigan are generally required to display the following state labor law posters, in addition to any federal posters or notices:
Michigan compliance requirements can prove challenging for employers to manage on their own, especially when it comes to regulations regarding payroll, paid sick leave, and unemployment insurance taxes.
Many businesses are turning to a trusted Michigan Payroll Company with experience in local and state regulations and requirements for help.
To learn more about how the right provider can help your business, contact us today. Or, get started now and find a provider.