Introduction to employment laws in Michigan
Overview
Michigan has a robust set of employment laws and regulations that employers must adhere to, in addition to federal requirements. Key areas covered by Michigan law include anti-discrimination protections, minimum wage and overtime, employee leaves, workplace safety, and final pay requirements upon termination.
Compliance with Michigan’s employment laws is crucial for businesses operating within the state. In this guide, we’ll help keep you compliant as you onboard and manage workers in Michigan.
Employing in Michigan: Key employment laws and practices
Standard work hours
In Michigan, standard employment typically ranges from 30 to 40 hours per week. However, there isn’t a set legal definition for it. Contractual workers’ hours depend on their agreement with the employer while self-employed professionals manage their own work hours.
Minimum wage and overtime
Michigan’s Improved Workforce Opportunity Act sets the minimum wage at $10.33 per hour with exceptions for certain sectors and roles. It also stipulates that non-exempt employees should be paid one-and-a-half times their regular pay rate for any hours worked over 40 in a workweek.
Employees exempted from overtime include those earning more than $684 per week, performing executive or managerial duties, and those working in a certified or licensed profession like law or engineering.
Insurance and benefits
Michigan law, specifically, stipulates certain insurance benefits employers must provide. Workers’ Compensation Insurance is mandatory for businesses with employees working 35+ hours a week for 13 weeks a year or longer, while Unemployment Insurance is required and taxed at a rate of 0.06% to 10.3% on the first $9,000 of each employee’s wages.
Meal and rest periods
Michigan employment law does not mandate that employers provide employees with rest or meal breaks. However, if a company chooses to offer short breaks (around five to 20 minutes), these are considered work time and should be paid for. Meal breaks (30 minutes or more) that are free of work duties are not considered paid time.
While federal law does not require meal breaks, it does provide guidelines for employers who choose to do so. If an employer provides a break of less than 20 minutes, it must be paid. Breaks lasting 30 minutes or more do not need to be paid as long as the employee is free to use the break for their own purposes.
Anti-discrimination laws
Michigan has stringent laws prohibiting discrimination in the workplace. Under the Elliott-Larsen Civil Rights Act, it is illegal for employers with one or more employees to discriminate based on religion, race, color, national origin, age, sex, marital status, height, weight, or genetic information.
The Michigan Persons with Disabilities Civil Rights Act protects disabled individuals from discrimination. The law requires employers to provide reasonable accommodations for employees with known disabilities unless it causes undue hardship.
Thus, businesses must foster a fair workplace environment and take proactive steps to prevent discrimination and uphold HR compliance in Michigan.
Multiplier makes it easy to manage benefits for Michigan employees.
Safety and health
Michigan employers are required to provide a safe and healthy work environment. Michigan Occupational Safety and Health Administration (MIOSHA) serves as the state’s health and safety body, enforcing safety standards in line with the federal Occupational Safety and Health Act (OSHA).
Michigan’s Smoke-Free Air Law prohibits smoking in most workplaces. Employers are required to post “No Smoking” signs and remove ashtrays where smoking is disallowed. While employers cannot prohibit employees from carrying concealed weapons at the workplace, they can restrict concealed pistols during work hours.
Taxes in Michigan
Both employers and employees share responsibility for taxes in Michigan. The state imposes an income tax on residents, non-residents, and part-year residents who earn income in Michigan.
As of 2022, the flat rate is 4.25%. The state does not collect taxes for social security or Medicare.
As for federal taxes, employers are required to withhold federal income tax from their employees’ wages. The amount varies based on the employee’s income, filing status, and withholding allowances.
Tax type | State tax rate | Federal tax rate |
Income tax | Flat 4.25% | Varies |
Social Security | Not required | 6.2% (employer) / 6.2% (employee) |
Medicare | Not required | 1.45% (employer) / 1.45% (employee) |
FUTA (federal unemployment tax) | Not required | 6% of the first $7,000 of taxable income per employee (with a 5.4% credit for state unemployment taxes paid) |
SUTA (state unemployment tax) | 0.06% to 10.3% of the first $9,500 of each employee’s wages | Not applicable |
Managing Michigan employees with an Employer of Record (EOR)
Navigating the labyrinth of employment laws and HR compliance regulations in Michigan can be quite daunting. This is where Multiplier’s all-in-one platform comes into play.
The Multiplier Employer of Record (EOR) solution enables businesses to employ full-time workers in Michigan, and other U.S. states, without having to deal with the complexities of setting up local entities.
Our Global Payroll Platform ensures that your international employees are paid timely while we handle local taxes, contributions, and withholdings on your behalf.
With Multiplier, you can focus on scaling your business while we manage the legal risks and ensure HR compliance. Book a demo today and streamline your HR procedures and compliance operations.
FAQs
Michigan law prohibits employers from discriminating or retaliating against employees based on religion, race, color, age, sex, marital status, height, weight, national origin or disability status. This is governed by the Elliott-Larsen Civil Rights Act and the Persons with Disabilities Civil Rights Act which also requires employers to provide reasonable accommodations for known disabilities of qualified individuals.
The Improved Workforce Opportunity Wage Act (IWOWA) stipulates that the minimum wage in Michigan is $10.33 per hour. However, separate minimum wage rates exist for tipped employees.
Yes, under the Paid Medical Leave Act (PMLA), Michigan employers with 50 or more employees must provide eligible employees with paid sick and safe leave. Employees can accrue up to 40 hours of paid sick leave in a year.
Michigan’s Youth Employment Standards Act (YESA) restricts the number of hours and times during which minors may work. Certain occupations are also prohibited for minors under 18. Minors have restricted working hours and are entitled to a rest break after five continuous hours of work.
Michigan law requires employers to pay terminated employees all wages due by the next regular payday. This includes accrued benefits as provided in a written employment contract or employer policy. In the event of an employee’s death, unpaid wages and benefits must be paid to surviving relatives in a specified order.
Under the Bullard-Plawecki Employee Right to Know Act, Michigan employers with four or more employees must allow their employees to inspect their personnel records at reasonable intervals and at a location reasonably near the employee’s place of employment.
