Michigan is home to Detroit's automotive revival, Ann Arbor's tech scene, and Grand Rapids' manufacturing hub - and its employment laws reflect a state that takes worker protections seriously. The Elliott-Larsen Civil Rights Act applies from your very first hire, and its 2023 expansion to cover sexual orientation and gender identity caught many out-of-state employers off guard. WorkGenius becomes your legal employer and manages every Michigan obligation from day one.
Facts reviewed against primary sources in September 2026
| Requirement | Michigan | Detail |
|---|---|---|
| Minimum wage | $13.73/hr | Effective January 1, 2026. Tipped rate is 40% of the minimum ($5.49/hr), 16 and 17 year olds are at $11.67, and the training wage is $4.25; Michigan adjusts the minimum wage annually based on inflation |
| State income tax | 4.25% flat | Michigan uses a flat income tax rate - reduced from 4.25% in 2023 due to state revenue triggers |
| Workers' compensation | Required (3+ employees) | Required for employers with 3+ employees, or 1+ employee working 35hrs/week for 13+ consecutive weeks |
| Paid Medical Leave Act | All employers | The Earned Sick Time Act replaced the PMLA on February 21, 2025. Every employer accrues 1 hour per 30 hours worked: 72 paid hours a year at 11 or more employees, 40 at 10 or fewer |
| Final paycheck | Next payday | Due on the next regular payday following termination - no accelerated deadline in Michigan |
| Elliott-Larsen threshold | 1+ employee | ELCRA applies to all Michigan employers regardless of size - broader than federal anti-discrimination law |
Michigan's Elliott-Larsen Civil Rights Act (ELCRA) is the state's foundational anti-discrimination statute - and it applies to every employer with at least one employee. That alone makes it significantly broader than federal Title VII, which requires 15 employees before it applies. But the law made national headlines in 2023 when the Michigan Supreme Court ruled, and the legislature confirmed, that ELCRA's prohibition on sex discrimination covers sexual orientation and gender identity. For out-of-state companies hiring their first Michigan employee, ELCRA's full protections - and full liability exposure - apply immediately.
Get Michigan-Compliant TodayMichigan's ELCRA coverage from employee one, Earned Sick Time accrual for every employer, and workers' comp threshold create a compliance stack that requires active management.
WorkGenius structures all Michigan employment agreements, offer letters, and workplace policies to meet ELCRA's full requirements - including the 2023 sexual orientation and gender identity expansion. Our onboarding flow is ELCRA-compliant from the first Michigan hire.
For every Michigan employer, WorkGenius tracks Earned Sick Time accrual at 1 hour per 30 hours worked, up to 72 paid hours a year at 11 or more employees and 40 at 10 or fewer. We administer usage requests and maintain the records required under the Act.
Michigan requires workers' comp for employers with 3 or more employees - or 1 or more employees working 35 or more hours a week for 13 or more weeks during the preceding 52 weeks. Without that lookback the test reads as a simple headcount rule, which it is not. 1 employee who works 35+ hours per week for 13+ consecutive weeks. WorkGenius monitors headcount and hours thresholds and ensures coverage is in place before it's required.
Michigan's wage payment law governs pay frequency, permissible deductions, and final paycheck timing. WorkGenius manages pay schedules, delivers final pay on the next regular payday following termination, and maintains all required wage statements.
Michigan unemployment insurance contributions calculated and remitted on every payroll cycle. New employer rate is 2.7% on the first $9,000 of each employee's wages. WorkGenius registers, files, and remits all contributions to the Unemployment Insurance Agency.
ACA-compliant health coverage, 401(k), and disability insurance enrolled and administered. Compliant offboarding includes final pay on the next regular payday, COBRA administration, Earned Sick Time balance handling, and ELCRA-compliant separation documentation.
Most EOR providers treat Michigan like a generic Midwest state. WorkGenius handles Elliott-Larsen Civil Rights Act compliance from your first hire, Michigan Paid Medical Leave Act accrual tracking, and workers' comp enrollment - automatically, on every payroll cycle.
Michigan's employment law environment rewards careful preparation - particularly for employers scaling beyond the 3- and 50-employee thresholds.
Roughly two dozen Michigan cities levy their own income tax, and each carries an employer withholding duty on top of the state rate. Detroit is the one most employers meet: 2.40% for residents and 1.20% for non-residents working in the city. A company hiring into Detroit on the assumption that the flat state rate is the whole obligation will under-withhold. WorkGenius identifies the applicable city for every Michigan employee and withholds at the correct resident or non-resident rate.
Michigan's primary anti-discrimination law applies to all employers with 1 or more employees. The 2023 expansion to cover sexual orientation and gender identity means employment agreements, anti-harassment policies, and onboarding materials must reflect updated protections. Violations can result in administrative complaints, civil lawsuits, and significant damages including attorney's fees.
The Earned Sick Time Act replaced the Paid Medical Leave Act on February 21, 2025 and applies to every Michigan employer, not just those with 50 or more employees. Employees accrue 1 hour for every 30 hours worked, up to 72 paid hours a year at employers with 11 or more employees and 40 hours at employers with 10 or fewer. Leave covers the employee or a family member for illness, injury, medical appointment, domestic violence or sexual assault. Employers must display required notices and maintain accrual records.
MCL 408.472 permits a monthly schedule as well as semi-monthly: on a monthly cycle, all wages earned in the month must be paid within 15 days of the end of that month. The Act restricts wage deductions and requires itemized pay statements. Final wages are due on the next regular payday following termination. Violations can result in civil wage claims plus attorney's fees.
Michigan's workers' comp threshold has two triggers: 3 or more employees at any time, OR 1 or more employees working 35 or more hours a week for 13 or more weeks during the preceding 52 weeks. The 52-week lookback is the part usually missed. 1 or more employees who regularly work 35+ hours per week for 13 or more consecutive weeks. Many small businesses cross the second threshold before the first. WorkGenius monitors both thresholds and ensures coverage is in place when required.
From first conversation to fully compliant employment - typically within days.
Workers, roles, locations, and start dates. We tailor the setup to your needs.
Our AI runs every worker through Michigan's classification and compliance rules. We prepare compliant contracts and payroll setup.
Onboarded with Michigan-compliant contracts, benefits enrolled, payroll running from day one.
Payroll runs on Michigan rules. Taxes filed. Compliance monitored. One weekly invoice.
The Michigan Supreme Court decided Rouch World, LLC v. Department of Civil Rights on July 28, 2022, and the legislature confirmed that ELCRA's prohibition on sex discrimination covers sexual orientation and gender identity. This was a significant expansion - previously, federal protections under Title VII covered these categories (following the US Supreme Court's 2020 Bostock decision), but Michigan's own law was ambiguous. Now, ELCRA explicitly covers LGBTQ+ employees, and it applies to every Michigan employer regardless of size - including employers with fewer than 15 employees who would not be covered by federal Title VII. WorkGenius ensures all Michigan employment agreements and policies reflect the updated law.
Unlike federal anti-discrimination laws (Title VII applies at 15+ employees, ADEA at 20+, ADA at 15+), ELCRA has no minimum headcount threshold. The moment you hire your first Michigan employee, you are subject to ELCRA's full anti-discrimination requirements covering race, sex (including sexual orientation and gender identity), age, religion, national origin, height, weight, marital status, and disability. This means even a small team with one Michigan remote worker requires ELCRA-compliant offer letters, onboarding materials, and workplace policies. WorkGenius handles this from day one.
The Paid Medical Leave Act was repealed on February 20, 2025 and replaced the next day by the Earned Sick Time Act, which changed almost every parameter. ESTA applies to every Michigan employer rather than only those with 50 or more employees. Employees accrue 1 hour of paid leave for every 30 hours worked, up to 72 paid hours a year at employers with 11 or more employees and 40 hours at employers with 10 or fewer. Leave covers the employee or a covered family member for medical care, domestic violence or sexual assault. WorkGenius tracks ESTA accrual and manages usage requests automatically.
Michigan has two separate triggers for mandatory workers' comp coverage. The first is straightforward: 3 or more employees at any time. The second catches many small businesses: 1 or more employees who regularly work 35 or more hours per week for 13 or more consecutive weeks. A single full-time remote employee in Michigan can trigger coverage under the second threshold. WorkGenius monitors both thresholds and ensures compliant coverage is in place before it is required.
Michigan uses a flat state income tax rate rather than graduated brackets. The rate was 4.25% for many years, but Michigan's constitution includes a revenue-triggered rate reduction mechanism. When state revenue exceeded a statutory threshold in fiscal year 2022, the rate dropped to 4.05% for tax year 2023 only, then reverted to 4.25% for 2024. Treasury confirmed 4.25% again for 2026, because general purpose revenue fell while inflation rose, so the reduction formula did not trigger. WorkGenius monitors the annual rate and adjusts withholding automatically - you never need to track Michigan's revenue reports to stay compliant.
Yes. Michigan courts enforce non-compete agreements that are reasonable in duration, geographic scope, and the type of employment or line of business restricted. Unlike Minnesota (which banned non-competes) or Maine (which has significant income-based restrictions), Michigan has not enacted broad non-compete reform. Courts may modify - rather than void - agreements that are overly broad. WorkGenius drafts non-compete provisions that meet Michigan's reasonableness standard while protecting legitimate business interests.
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