Michigan employment law sits on top of federal rules and, in several areas, goes further than them. The state sets its own minimum wage, requires paid sick time from nearly every employer, bans a wider list of discrimination grounds than federal law does, and runs its own workplace safety agency. What follows walks through the rules that matter most for Michigan employers and workers heading into 2026, from the first paycheck through the last day on the job.
Minimum Wage and Tipped Pay
Michigan’s minimum wage is $13.73 per hour as of January 1, 2026 under the Workforce Opportunity Wage Act.1State of Michigan. LEO – Minimum Wage and Overtime That is a sharp increase from the $10.33 rate that held in 2024, the result of the Michigan Supreme Court’s decision in Mothering Justice v. Attorney General, which reinstated the increases scheduled by the original 2018 ballot initiative. The rate now adjusts annually for inflation, so check the posted state rate every January.
Tipped employees must be paid a base of at least $5.49 per hour as of January 1, 2026, which equals 40 percent of the full minimum wage.2State of Michigan. Michigans Minimum Wage Set to Increase on Jan 1, 2026 If a worker’s tips plus base rate fall short of $13.73 per hour in a pay period, the employer owes the difference. The tipped sub-minimum is on a phased schedule toward eventual elimination, so any employer using a tip credit needs to track the annual steps.
Overtime and Who’s Exempt
Hours over 40 in a single workweek must be paid at one and a half times the employee’s regular rate.3Michigan Legislature. Michigan Code 408.414a – Workforce Opportunity Wage Act This is a weekly threshold, not a daily one. A 12-hour Monday followed by 28 hours over the rest of the week does not trigger overtime.
Not every worker qualifies. Under the federal Fair Labor Standards Act, employees in executive, administrative, or professional roles paid at least $684 per week on a salary basis are generally exempt.4U.S. Department of Labor. Fact Sheet 17A – Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the FLSA A 2024 DOL rule tried to raise that threshold, but a federal court vacated it, so $684 per week remains the number for 2026. The exemption also depends on actual job duties meeting specific tests, so a title alone does not settle the question.
When state and federal law both apply, the standard more favorable to the worker controls.5U.S. Department of Labor. Handy Reference Guide to the Fair Labor Standards Act Michigan’s minimum wage exceeds the federal $7.25 floor, so the state rate governs pay; the FLSA still sets the ground rules for overtime exemption classifications.
Pay Frequency and Final Paychecks
The Payment of Wages and Fringe Benefits Act requires employers to pay at least twice per month. Wages earned in the first half of the month are due by the first of the following month; wages from the second half are due by the fifteenth.6Michigan Legislature. Michigan Code 408.472 – Payment of Wages An employer using a regularly scheduled monthly cycle can meet the obligation by paying within 15 days after each period ends. Most Michigan businesses run biweekly or semimonthly.
When an employee is fired, all earned wages must be paid as soon as the amount can reasonably be determined.7Michigan Legislature. Michigan Code 408.475 – Payment of Wages to Employee Voluntarily Leaving or Discharged From Employment For someone who quits, the same standard applies: all wages earned and due must be paid as soon as the employer can determine the amount with due diligence. Nothing in the statute allows an employer to hold a final paycheck indefinitely. A worker who is not paid can file with the state’s Wage and Hour Division, and courts can order payment of the full amount owed plus fringe benefits.
Earned Sick Time
The Earned Sick Time Act at MCL 408.961 replaced the narrower Paid Medical Leave Act after the Michigan Supreme Court restored the original 2018 ballot initiative.8Michigan Legislature. Michigan Code 408.961 – Earned Sick Time Act The law now reaches nearly every Michigan employer. Small businesses with 10 or fewer employees became subject to the act on October 1, 2025.9Honigman LLP. Michigans Earned Sick Time Act Expands to Small Employers
Workers accrue one hour of paid sick time for every 30 hours worked. The annual usage cap depends on employer size:10State of Michigan. Earned Sick Time Act – Frequently Asked Questions
- Employers with 11 or more employees: up to 72 hours of paid sick time per year, with up to 72 unused hours carried over.
- Small businesses with 10 or fewer employees: up to 40 hours per year, with up to 40 unused hours carried over.
Employers who front-load the full annual allotment at the start of the year do not have to allow carryover. Sick time can be used for personal illness, caring for a family member, absences tied to domestic violence or sexual assault, and certain public health emergencies. The old law capped leave at 40 hours and only applied to businesses with 50 or more employees, so the practical change for small and midsized employers is substantial.
Family and Medical Leave
Michigan has no state family and medical leave statute, so the federal Family and Medical Leave Act does the work. The FMLA covers private employers with 50 or more employees within a 75-mile radius, along with all public employers. A worker qualifies after 12 months on the job and 1,250 hours in the preceding year.
Eligible employees get up to 12 weeks of unpaid, job-protected leave per year for the birth or adoption of a child, a serious personal health condition, caring for a spouse, parent, or child with a serious health condition, or certain military family needs.11Office of the Law Revision Counsel. 29 USC 2612 – Leave Requirement Caring for a covered servicemember with a serious injury raises the limit to 26 weeks in a single 12-month period. During FMLA leave the employer keeps the employee on the group health plan and restores them to the same or an equivalent position when they return.
Discrimination and Harassment
The Elliott-Larsen Civil Rights Act is Michigan’s main anti-discrimination statute.12Michigan Legislature. Michigan Compiled Laws Act 453 of 1976 – Elliott-Larsen Civil Rights Act It prohibits employment decisions based on religion, race, color, national origin, age, sex, height, weight, familial status, or marital status. In March 2023, the legislature added sexual orientation and gender identity or expression to that list.13Michigan Legislature. Senate Bill 4 of 2023 – Public Act 6 of 2023
Michigan reaches further than federal law in a few spots. Height and weight are not covered by any federal statute. The Persons with Disabilities Civil Rights Act at MCL 37.1101 separately guarantees equal employment access for individuals with physical or mental disabilities and requires reasonable accommodations unless they would impose undue hardship.14Michigan Legislature. Michigan Code 37.1101 – Persons With Disabilities Civil Rights Act
Harassment counts as discrimination when unwelcome conduct based on a protected trait interferes with someone’s ability to do their job or creates a hostile work environment. That covers both quid pro quo situations and persistent conduct that poisons the workplace. Complaints go to the Michigan Department of Civil Rights, and courts can award compensatory damages including lost wages, emotional distress, and attorney fees.
Federal Claims and the 300-Day Deadline
Workers can also pursue federal claims under Title VII, the ADA, and the Age Discrimination in Employment Act. Because Michigan runs its own civil rights agency, the federal filing window extends to 300 calendar days from the discriminatory act, rather than the 180 that applies in some states.15U.S. Equal Employment Opportunity Commission. Time Limits For Filing A Charge Missing the deadline generally bars the federal claim no matter how strong the evidence.
Federal law also caps combined compensatory and punitive damages in Title VII and ADA cases by employer size, from $50,000 for employers with 15 to 100 employees up to $300,000 for employers with more than 500. Back pay is not subject to those caps. The Elliott-Larsen Civil Rights Act has no equivalent cap, which is one reason some plaintiffs favor state court.
At-Will Employment and Wrongful Discharge
Michigan is an at-will state. Either side can end the employment relationship at any time for any reason that is not illegal. “Any reason that is not illegal” is narrower than it sounds. Michigan courts recognize three exceptions that can turn a routine termination into a wrongful discharge claim.
- Statutory exceptions. Firing someone because of a protected characteristic under Elliott-Larsen or the Persons with Disabilities Civil Rights Act is illegal, as is retaliating against a whistleblower or punishing an employee for filing a workers’ compensation claim.
- Public policy exception. Michigan courts have held that terminations violating an explicit public policy found in a statute or the state constitution can be actionable, though they read this exception narrowly.
- Implied contract exception. Promises in an employee handbook, in performance reviews, or through consistent company practice can create enforceable expectations of job security that override the at-will default. A handbook that says employees will only be terminated for cause, or that spells out a progressive discipline process, can bind the employer.
Employers who want to keep at-will flexibility should put clear, conspicuous disclaimers in every handbook and offer letter. Inconsistent practice can still undercut the disclaimer.
Whistleblower Protection
The Whistleblowers’ Protection Act at MCL 15.361 bars employers from firing, threatening, or otherwise retaliating against an employee who reports or is about to report a suspected violation of law to a public body.16Michigan Legislature. Michigan Compiled Laws 15.361 – The Whistleblowers Protection Act It also protects employees who take part in government investigations or hearings.
The remedies are among the strongest in Michigan employment law. A court can order reinstatement, back wages, full restoration of fringe benefits and seniority, actual damages, and reasonable attorney fees and litigation costs.17State of Michigan. Whistleblowers Protection Act – Section 4 Remedies The catch is the “public body” requirement, which covers government agencies, law enforcement, and legislative bodies. Complaining only to an internal manager generally does not qualify unless the employer is itself a public body. A worker who wants the statute’s protection needs to direct the report to a government entity.
Independent Contractor or Employee
Misclassifying employees as independent contractors is one of the most expensive mistakes a Michigan business can make. It opens the door to liability for unpaid overtime, withheld benefits, unemployment insurance contributions, and tax penalties at the state and federal level.
The IRS looks at three categories: behavioral control over how the work gets done, financial control over the business side of the arrangement, and the nature of the relationship, including benefits, written contracts, and permanence.18Internal Revenue Service. Independent Contractor (Self-Employed) or Employee No single factor decides it. The more control the company exercises, the more likely the worker is an employee. The Department of Labor applies a related economic reality test for wage and hour purposes. Document the reasoning behind every contractor relationship, because a reclassification audit can reach back several years in back-pay obligations.
Union Security After the Right-to-Work Repeal
Michigan repealed its right-to-work law effective March 30, 2024, restoring the ability of unions and employers to negotiate union security agreements in private-sector collective bargaining contracts.19State of Michigan. MI Repeal of FTW/RTW Under those agreements, employees in a bargaining unit can be required to pay union dues or fees as a condition of employment. A companion bill aimed to restore the same rule for public-sector workers, but parts of that law cannot take effect unless the U.S. Supreme Court reverses or limits Janus v. AFSCME. For private-sector employers with unionized workforces, new or renewed contracts after March 2024 can again include clauses requiring all covered employees to financially support the union.
Workplace Safety Under MIOSHA
Michigan runs its own occupational safety program through the Michigan Occupational Safety and Health Administration rather than deferring entirely to federal OSHA. MIOSHA sets and enforces standards for general industry, construction, agriculture, and radiation through administrative rules carrying the force of law.20State of Michigan. LEO – MIOSHA Standards State standards must be at least as protective as the federal ones, and in some areas Michigan goes further.
Employers must keep records of workplace injuries and illnesses. A revised recordkeeping standard took effect in March 2026, aligning Michigan with updated federal rules. Establishments with 100 or more employees in high-hazard industries must electronically submit detailed injury logs to OSHA through the federal Injury Tracking Application. Smaller employers still keep internal records and post annual summaries. A worker who believes the workplace is unsafe can file a MIOSHA complaint, and the agency can inspect without advance notice.
Health Coverage and Unemployment After the Job Ends
Workers who lose a job or have hours cut may qualify for continued health coverage under the federal COBRA law, which applies to employers with 20 or more employees.21Centers for Medicare and Medicaid Services. COBRA Continuation Coverage Divorce, a spouse’s death, and a dependent child aging out of coverage are also qualifying events. COBRA lets a former employee stay on the same group plan for up to 18 months, or 36 months for certain events, but the employee pays the full premium plus a 2 percent administrative fee. It is costly, and it prevents a gap while someone transitions to a new employer’s plan or to the individual marketplace.
Workers who are terminated, laid off, or quit may also qualify for state unemployment insurance through the Unemployment Insurance Agency within the Department of Labor and Economic Opportunity. Eligibility generally requires that the separation was not due to misconduct and that the worker earned enough wages during a base period. Benefits are set as a percentage of prior earnings, with a weekly maximum that adjusts periodically. A denied claim can be appealed through an administrative hearing.