Employer of Record · Michigan

Employer of Record in Michigan.
Elliott-Larsen Covered. Auto Industry Ready.

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

$13.73/hr
Minimum wage (2026)
4.25%
Flat state income tax
1+ employee
ELCRA coverage threshold

Michigan by the Numbers

Key Michigan employment law figures: requirement, current value, and detail.
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
The Defining Law

The Elliott-Larsen Civil Rights Act: Full Protections From Your First Hire

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 Today
Key Requirements
  • ELCRA applies to all Michigan employers with 1 or more employees - no minimum headcount exemption
  • Prohibits discrimination in hiring, compensation, promotion, and termination based on race, sex, age, religion, national origin, height, weight, marital status, and disability
  • As of 2023, "sex" under ELCRA expressly covers sexual orientation and gender identity - confirmed by both the Michigan Supreme Court and the Michigan legislature
  • Employees can file administrative complaints with the Michigan Department of Civil Rights or bring direct civil suits
  • Remedies include back pay, front pay, compensatory damages, and attorney's fees
  • WorkGenius ensures all Michigan employment agreements, onboarding materials, and policies are ELCRA-compliant from day one
Michigan Coverage

What WorkGenius Handles for Michigan

Michigan'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.

Elliott-Larsen Civil Rights Act Compliance

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.

Michigan Earned Sick Time Act (ESTA)

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.

Workers' Comp: 3 Employees or 35 Hours

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 Payment of Wages and Fringe Benefits Act

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 (SUTA)

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.

Michigan Benefits and Next-Payday Final Pay

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.

Michigan Compliance Dashboard
3 workers · All compliant
Live
Elliott-Larsen Compliance Check
Passed
ELCRA policy aligned - sexual orientation & gender identity covered
Earned Sick Time Act accrual tracking active (all employers)
Workers' comp enrollment confirmed (3-employee threshold)
This Week's Payroll
$13.73
Base/hr
$20.60
OT rate (1.5×)
Auto
Calculated
Weekly invoice sent
Every Friday · All-in rate
Sent
Technology-Powered

How WorkGenius Handles Michigan EOR

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.

  • Elliott-Larsen - 1-Employee Coverage
    Michigan's Elliott-Larsen Civil Rights Act applies to all employers with at least one employee - far broader than federal Title VII's 15-employee threshold. The 2023 expansion to cover sexual orientation and gender identity means every Michigan hire triggers full ELCRA obligations. WorkGenius ensures your employment agreements, policies, and practices are fully aligned.
  • Michigan Payroll, Automatically
    Minimum wage at $13.73/hr, flat 4.25% state income tax, Earned Sick Time accrual at 1 hour per 30 hours worked for every employer, and SUTA at 2.7% on the first $9,000 of wages - all calculated and remitted on every pay cycle.
  • Real-Time Compliance Monitoring
    Michigan's minimum wage runs on a legislated schedule rather than an annual index - $12.48 from February 2025, $13.73 from January 2026 and $15.00 from January 2027, with CPI-Midwest indexing only after that - and Earned Sick Time rules require ongoing monitoring. Our platform auto-updates when rates or rules change - so you're always compliant without tracking the legislative calendar yourself.
  • One Weekly Michigan Invoice
    A single, transparent weekly invoice covering payroll, taxes, Earned Sick Time administration, benefits, and compliance. No surprises, no hidden fees.

Other Key Michigan Compliance Areas

Michigan's employment law environment rewards careful preparation - particularly for employers scaling beyond the 3- and 50-employee thresholds.

City Income Taxes

Detroit 2.40% / 1.20%

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.

Elliott-Larsen Civil Rights Act (ELCRA)

1-employee threshold

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.

Michigan Earned Sick Time Act (ESTA)

All employers

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.

Michigan Payment of Wages and Fringe Benefits Act

Monthly or semi-monthly

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.

Workers' Compensation

3-employee OR 35hrs/13wks

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.

Simple Process

How It Works in Michigan

From first conversation to fully compliant employment - typically within days.

1

Tell Us What You Need

Workers, roles, locations, and start dates. We tailor the setup to your needs.

2

We Assess & Classify

Our AI runs every worker through Michigan's classification and compliance rules. We prepare compliant contracts and payroll setup.

3

Workers Are Employed

Onboarded with Michigan-compliant contracts, benefits enrolled, payroll running from day one.

4

We Handle Ongoing

Payroll runs on Michigan rules. Taxes filed. Compliance monitored. One weekly invoice.

Michigan EOR: Common Questions

What changed about Michigan's Elliott-Larsen Civil Rights Act in 2023?

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.

Why does ELCRA apply from employee one, and what does that mean for my business?

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.

What is Michigan's Paid Medical Leave Act and who does it apply to?

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.

What is Michigan's workers' compensation threshold?

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.

How does Michigan's flat income tax work, and why did the rate change?

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.

Are non-compete agreements enforceable in Michigan?

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.

Explore other state EOR guides

Related compliance concepts

Employer of Record

Ready to Employ in Michigan Compliantly?

WorkGenius handles worker classification, Michigan payroll, benefits, and every other compliance requirement so you don't have to. Get started today.

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