Michigan HR Compliance
for Small Businesses

The minimum wage in Michigan is $13.73/hour (Jan 1, 2026); rising to $15.00 Jan 1, 2027. Tipped: $5.49 (40% of minimum wage). Minor (85%): $11.67.. Tipped employees may be paid $5.49/hour (2026) with a valid tip credit. Always verify the current rate at the start of each calendar year — many state rates are indexed to CPI and adjust annually.

In Michigan: involuntary terminations — Next scheduled payday (as soon as amount can be determined with due diligence). Voluntary resignations — . Accrued PTO is not required to be paid out on termination unless your written policy promises it. Never hold a final paycheck over unreturned equipment or unsigned paperwork — that exposes you to wage claims regardless of the circumstances.

Yes. Michigan requires paid sick leave. Earned Sick Time Act (ESTA): eff. Feb 21, 2025 for 11+ employees; Oct 1, 2025 for under 10. 1hr/30hrs. Large: 72hr/yr usage cap. Small: 40hr/yr. 120-day waiting period for new hires (accrual method).. Track accrual, carryover rules, and permissible uses carefully — enforcement actions typically follow audits of smaller employers with incomplete records.

Michigan does not have a state-mandated paid family leave program. Federal FMLA provides up to 12 weeks of unpaid, job-protected leave for employers with 50 or more employees. Employers can offer private paid leave or short-term disability insurance.

Michigan does not currently have a statewide law requiring salary ranges in job postings. Pay equity best practice is to establish documented pay bands and apply them consistently, regardless of what the law requires.

Michigan Antitrust Reform Act: enforceable if protects reasonable competitive business interests, reasonable in duration/geography/type. Courts may blue-pencil. HB 4040 (pending) would broadly ban noncompetes retroactively. Michigan courts evaluate noncompetes for legitimate business interest and reasonableness of scope, geography, and duration.

Michigan uses the following test to determine worker classification: Common-law economic reality test. Proposed 2026 legislation could codify stricter standards.. Misclassification exposes employers to back taxes, penalties, and liability for benefits and wage-hour violations. When in doubt, consult counsel before engaging contractors for ongoing work.

Meal breaks: None required for adult employees. Minors under 18 working 5+ consecutive hours: 30-min break.. Rest breaks: None required. Missing a required break can trigger a premium pay penalty — make sure managers understand that breaks are mandatory, not optional, and document compliance in timekeeping records.