Employer of Record for Michigan

Guide to Hiring Employees in Michigan

Your guide to hiring employees in Michigan, covering employment and labor laws, payroll, benefits, onboarding and taxes. You can also manage and pay your contractors in Michigan through Playroll.

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Iconic Image Of Michigan

Capital City

Lansing

Timezone

CST

(

GMT-6

)

Paid Leave

None

Income Tax

4.25%

Employer Tax

13.65%

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How to Hire Employees In Michigan

Hiring in Michigan for the first time can be challenging, especially with the state's complex employment laws. Whether you're hiring independent contractors, setting up a legal entity, partnering with a PEO, or using an Employer of Record (EOR), it's essential to understand the local employment landscape. Playroll's comprehensive guide is here to help, whether you're onboarding local talent or relocating team members.

Here are four primary ways companies can hire employees in Michigan:

  • Establishing a local entity: Creating a legal entity in Michigan allows for direct hiring, but it can be costly and time-consuming. However, it gives you full control over employment and reduces risk exposure.
  • Partnering with an Employer of Record (EOR): An EOR, like Playroll, takes on the legal responsibilities of employment, acting as the employer on your behalf. This option streamlines hiring, payroll, and compliance with Michigan’s labor laws, helping you hire in Michigan without navigating the complex legal landscape yourself.
  • Working with a Professional Employer Organization (PEO): A PEO, such as Playroll, co-employs your team, managing essential HR functions like payroll, benefits, and compliance. Partnering with a PEO ensures you meet Michigan’s labor regulations while offering competitive employee benefits.
  • Hiring independent contractors: Hiring independent contractors can be more cost-effective, but Michigan has strict contractor classification rules. Proper classification is essential to avoid penalties for misclassification when hiring in Michigan.

Complying with Michigan specific employment regulations and federal laws is critical to avoiding legal risks and costly fines. Our guide focuses on hiring in Michigan, employment compliance, and how Playroll’s services can support your business as you navigate the complexities of hiring in the state.

Good To Know

Michigan is home to a diverse and talented workforce, especially in manufacturing, tech, and engineering. Whether you're looking for automotive experts or innovative tech minds, Michigan's talent pool is hard to beat.

Employees in Michigan enjoy a unique mix of urban and outdoor living, from bustling Detroit to the serene Great Lakes. This balance makes it easier to attract and retain happy, motivated team members.

With competitive tax incentives and business-friendly initiatives, Michigan creates an environment where companies—and their employees—can thrive together.

Key Things to Know About Hiring in Michigan

Do I Need an EIN or Payroll Tax Number To Employ in Michigan?

To employ workers in Michigan, you’ll need both an Employer Identification Number (EIN) and a Michigan Payroll Tax Number.

Working Hours in Michigan

In Michigan, standard working hours and overtime requirements are primarily regulated by the Fair Labor Standards Act (FLSA) and state laws.

  • Full-Time Work: Generally, full-time work is considered 40 hours per week.
  • Part-Time Work: Typically, part-time is less than 40 hours per week, though this varies by employer.

What Is Considered Full-Time Employment in Michigan?

Generally, full-time work is considered 40 hours per week.

Probation Period in Michigan

There is no mandated state law that specifies the duration or terms of a probation period for new employees. Instead, probationary periods are typically defined by employers’ policies and often last between 30 to 90 days, though they can extend up to six months or more depending on the employer's preference and the role's requirements.

Michigan Employment Laws for Hiring

Minimum Wage in Michigan

Michigan's minimum wage is $10.33 per hour.

Michigan Anti-Discrimination Laws

Michigan's anti-discrimination framework is primarily governed by the Elliott-Larsen Civil Rights Act (ELCRA), enacted in 1976. This legislation prohibits discrimination in employment, housing, education, and public accommodations based on various protected characteristics.

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Onboarding New Hires in Michigan

We can help you get your new employee started in Michigan fast, with a minimum onboarding time from just 1-2 working days. Note that the timeline is dependent upon registration with the local authorities, and begins after the employee has submitted all the required information on the Playroll platform.

For non-citizens of the US, a work eligibility assessment may be required, and can add three extra days to the onboarding time. If a follow-up is needed, there may be additional delays.

Please note that payroll cut-off dates can impact the actual first day of employment. Playroll’s payroll cut-off date is the 10th of the month, unless otherwise specified.

Payroll Services For Michigan

Payroll cycles vary depending on employer preference and industry standards, but the most common types are:

  • Bi-weekly
  • Semi-monthly
  • Weekly
  • Monthly

Looking to grow your team in Michigan?

Stay Compliant: Navigate Michigan’s complex labor laws with ease.

Affordable Solution: Reduce costs with a budget-friendly EOR option.

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Overview of Employment Taxes in Michigan

Employer Tax Contributions

Employment Tax Type Tax Rate
Social Security Tax As per federal legislation
Medicare Tax As per federal legislation
Federal Unemployment Tax Act (FUTA) Tax As per federal legislation
Workers compensation insurance Determined by factors such as industry classification, payroll size, and the employer's claims history.

Employee Payroll Tax Contributions

Employee Payroll Tax Contribution Tax Rate
Social Security Tax As per federal legislation
Medicare Tax As per federal legislation

Tax Due Dates in Michigan

Based on the total tax liability reported during a lookback period, employers are assigned either a monthly or semi-weekly deposit schedule.

Pension in Michigan

Pensions are not mandatory for private-sector employers in Michigan. However, certain public sector employees may have access to mandatory pension plans.

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The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Michigan tailored to your needs.

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Benefit Requirements for Employers in Michigan

In Michigan, employers are required to provide certain benefits to their employees, while others are optional but commonly offered to attract and retain talent. Mandatory Benefits include:

  • Workers' Compensation Insurance
  • Unemployment Insurance
  • Paid Medical Leave
  • Overtime Pay
  • Minimum wage compliance
  • Family and Medical Leave

Are Employers Required To Provide Health Insurance in Michigan?

Under the Affordable Care Act (ACA), employers with 50 or more full-time employees are required to offer health insurance that meets minimum essential coverage standards. Employers with fewer than 50 full-time employees are not required by law to provide health insurance.

Do Part-Time Employees Get Benefits in Michigan?

Benefits for part-time employees largely depend on employer policy, as state and federal laws do not mandate most benefits for part-time workers.

Are Employers Required To Offer 401k in Michigan?

Employers are not required to offer a 401(k) or any other retirement plan to their employees. The decision to provide such benefits is at the discretion of the employer.

It’s Easy To Manage Benefits For Employees In Michigan With Playroll

Paid and Unpaid Leave Policies in Michigan

Is Vacation Leave Mandatory in Michigan?

Vacation leave is not mandatory in Michigan. Employers in Michigan are not required by state law to provide paid or unpaid vacation leave.

What Are Mandatory Leave Entitlements in Michigan?

Type of Leave Time Period Mandatory Pay Status Eligibility Criteria
Paid Medical Leave 1 hour of paid medical leave for every 35 hours worked Yes Paid (Full) Employees who work an average of 25 hours or more per week. Applies to employers with 50 or more employees
Family and Medical Leave Act (FMLA) 12 weeks Yes Unpaid As stipulated by federal FMLA legislation
Military Leave (Uniformed Services Employment and Reemployment Rights Act - USERRA) Dependant on military duties Yes Unpaid Must be members of a recognized uniformed service, provide advance notice to their employer, and limit their cumulative military leave to five years with the same employer.
Jury Duty Leave Duration of legal matter Yes Unpaid Employee must be a legal citizen, over the age of 18.
Crime Victim Leave As long as matter is at court Yes Unpaid Victims of crimes or individuals subpoenaed as witnesses

Paid Time Off in Michigan

In Michigan, Paid Time Off (PTO) policies, including vacation time and personal days, are generally at the discretion of employers.

Maternity Leave In Michigan

In Michigan, there is no state-mandated maternity leave. Employees rely on the federal Family and Medical Leave Act (FMLA), which provides unpaid, job-protected leave for eligible employees to care for a newborn, adopted child, or newly placed foster child. If FMLA doesn’t apply, any maternity leave would depend on the employer’s policies. Some companies may offer paid maternity leave voluntarily as a benefit.

Paternity Leave In Michigan

In Michigan, there is no state-mandated paternity leave. Eligible employees may qualify for unpaid, job-protected leave under the federal Family and Medical Leave Act (FMLA) to care for a newborn, adopted child, or newly placed foster child. If FMLA doesn’t apply, any paternity leave would depend on the employer’s specific policies, as Michigan law does not provide additional leave requirements for paternity.

Sick Leave In Michigan

Under Michigan's Paid Medical Leave Act, eligible employees at larger companies can earn paid sick leave for personal or family health needs, with accrual capped at 40 hours per year. Smaller employers, with fewer than 50 employees, are not required to offer paid sick leave but may choose to implement their own policies.

Military Leave in Michigan

Military leave is governed by both federal and state laws, ensuring that employees who serve in the uniformed services are granted specific rights and protections. Employers must grant a leave of absence to employees for the purpose of being inducted into or entering active service, active state service, or the service of the United States.

Jury Duty in Michigan

Michigan law prohibits employers from discharging, disciplining, or threatening employees due to jury service. Employers are also forbidden from requiring employees to work additional hours to compensate for time spent on jury duty.

Parental Leave In Michigan

Federal FMLA provisions offer unpaid parental leave for eligible employees, while paid parental leave in Michigan largely depends on employer policies.

Employment Termination Protocols in Michigan

Termination Process in Michigan

The termination process for employees is governed by at-will employment principles, which means either the employer or the employee can terminate the employment relationship at any time, for any reason, as long as it is not illegal.

Notice Period in Michigan

Michigan does not require employers to provide advance notice of termination unless specified in an employment contract or union agreement. Michigan law requires that employees receive their final paycheck by the next scheduled payday after termination. This includes all earned wages, including unpaid vacation if the employer's policy allows for it.

Severance in Michigan

Michigan employment laws do not require employers to provide severance pay upon termination unless specified in an employment contract, company policy, or a collective bargaining agreement.

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Employer of Record for Michigan

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FAQS

FAQs About Hiring In Michigan

What is the minimum wage in Michigan?

As of January 1, 2024, Michigan’s minimum wage rates are:

  • $10.10 per hour.
  • Applies across all sectors.

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