Hiring Employees in Michigan

Classifying Your Workers Correctly

Your company must distinguish properly between employees and independent contractors under IRS common law tests and Michigan’s wage and unemployment rules. You should look at behavioral control, financial control, and the overall relationship to decide if a worker is truly independent. Misclassification can trigger back wages, unpaid overtime, taxes, interest, and penalties at both state and federal levels.

Michigan also requires you to treat most workers as employees for unemployment and workers’ compensation unless they meet narrow independence criteria. If you are unsure, you should review federal guidance and resources such as misclassification guides and consider getting legal or tax advice before finalizing a contractor arrangement.

Verify Employee Work Eligibility

For every new hire in Michigan, you must complete federal Form I-9 within 3 business days of the employee’s start date to verify identity and work authorization. You must review original acceptable documents from the employee – such as a U.S. passport, or a combination of driver’s license and Social Security card – and keep I-9s for the longer of 3 years after hire or 1 year after termination.

Michigan does not have a statewide E-Verify mandate for private employers, but you may choose to use E-Verify voluntarily or be required by certain federal contracts. If you enroll, you must follow E-Verify rules consistently for all covered new hires and maintain records according to federal retention standards.

Create an Employee Onboarding Process

When you hire in Michigan, you should issue a clear written offer letter outlining pay rate, pay schedule, exempt status, and key benefits. At or before the first day, you’ll need to collect federal Form W-4, Michigan Form MI-W4, direct deposit authorization if used, and signed acknowledgments for your employee handbook and key policies.

Michigan employers must also provide required notices such as unemployment insurance information and workers’ compensation postings, and you should report new hires to the state directory within 20 days. Building a consistent onboarding checklist helps you control compliance risk and gives you better visibility into the true cost of each Michigan hire.

Pay Frequency & Methods

Michigan law generally requires you to pay employees at least twice per month, with no more than 16 days between regular paydays, unless you qualify for and follow rules for less frequent payments. You must pay wages earned during a pay period within 15 days after the end of that period and provide an itemized statement showing hours, rates, and deductions.

Final wages are due on the next regular payday after separation unless you have a more generous written policy or contract, and late or unpaid wages can lead to civil penalties and potential attorney’s fees. You should keep accurate payroll records for at least 3 years to demonstrate compliance with Michigan’s Payment of Wages and Fringe Benefits Act.

Payment Methods (How You Can Pay)

You can choose from several lawful payment methods in Michigan, but you must always ensure employees receive full wages on time and can access their pay without unlawful fees or coercion.

• Payroll Check: You may pay by check as long as it is payable at full face value in U.S. currency and employees can cash or deposit it without employer-imposed fees.
• Cash: You may pay wages in cash, but you must still provide a written wage statement each pay period showing hours worked, rates, gross pay, and all deductions.
• Direct Deposit (EFT): You can use direct deposit only if the employee voluntarily authorizes it, and you must offer at least one alternative method if they decline.
• Paycards: You may pay by payroll card if employees have fee-free access to their full wages at least once per pay period and you give clear written disclosures of terms and fees.
• Outsourced Payroll: You may outsource payroll to a third-party provider, but your company remains legally responsible for accurate wage payments, tax withholding, and timely filings.

When you hire employees in Michigan, you must withhold and remit federal and state payroll taxes and pay several employer-only contributions. You’ll need to register with the Michigan Department of Treasury for income tax withholding and with the Unemployment Insurance Agency (UIA) for state unemployment insurance.

Employer Tax Contributions

As a Michigan employer, you are responsible for federal Social Security and Medicare contributions, federal unemployment (FUTA), state unemployment (SUTA), and any local taxes that may apply. You must file returns and pay these taxes on the schedules assigned by the IRS and Michigan agencies based on your total payroll.

Employee Payroll Tax Contributions

You must withhold federal income tax, state income tax, and the employee share of Social Security and Medicare from Michigan employees’ paychecks. Your company must remit these withholdings on time and provide employees with annual Forms W-2 summarizing their wages and taxes.

Minimum Wage in Michigan

Michigan’s minimum wage for most non-tipped employees is $10.33 per hour as of 2024, with a lower cash wage allowed for tipped employees if tips bring them up to at least the full minimum. Your company must track hours accurately and ensure that any deductions do not reduce pay below the state minimum wage for all hours worked.

Working Hours in Michigan

Michigan does not set a daily maximum for adult employees, but you must pay for all hours suffered or permitted to work and comply with youth employment limits for minors under 18. You should schedule reasonable shifts, provide any breaks promised in policy or contracts, and follow federal rules on recordkeeping for hours worked.

Overtime in Michigan

Under Michigan law, nonexempt employees must receive overtime pay at 1.5 times their regular rate for all hours worked over 40 in a workweek, mirroring federal Fair Labor Standards Act rules. To classify someone as exempt from overtime, you must meet both federal salary thresholds and duties tests, and you should document your exemption decisions carefully.

In Michigan, you decide which benefits to offer beyond what the law requires, but competitive employers typically provide health insurance, retirement plans, and paid time off. If you average 50 or more full-time employees in the U.S., the federal Affordable Care Act requires you to offer affordable, minimum-value health coverage or face potential penalties.

Mandatory Leave Policies in Michigan

Paid Time Off in Michigan

Michigan does not require general vacation or PTO, so you can design your own policy as long as you follow your written terms. Under the Payment of Wages and Fringe Benefits Act, you must honor your policy on accrual, use, and payout of unused PTO at separation, so you should state clearly whether unused time is forfeited or paid.

Many Michigan employers offer at least 10–15 days of PTO per year for full-time staff to stay competitive in attracting talent. You should also decide how PTO interacts with Michigan’s Paid Medical Leave Act if you use a combined PTO bank to satisfy statutory sick leave requirements.

Maternity & Paternity Leave in Michigan

Michigan does not have a separate paid parental leave law, but eligible employees may take up to 12 weeks of unpaid, job-protected leave under the federal FMLA for birth, adoption, or foster placement. Your company must continue group health coverage on the same terms during FMLA leave and restore the employee to the same or an equivalent position at the end of leave.

Some employers choose to offer paid parental leave or allow employees to use accrued PTO or paid medical leave to cover part of their time away. You should put your parental leave policy in writing and apply it consistently to all eligible employees to avoid discrimination issues.

Sick Leave in Michigan

Under the Michigan Paid Medical Leave Act, covered employers with 50 or more employees must allow eligible employees to accrue at least 1 hour of paid leave for every 35 hours worked, up to 40 hours per benefit year. Employees can use this leave for their own or a family member’s illness, medical appointments, domestic violence situations, and certain public health emergencies.

Smaller employers not covered by the Act are not required to provide paid sick leave but often do so to remain competitive. Whatever sick leave policy you adopt, you should communicate eligibility, accrual, carryover, and documentation requirements clearly in your handbook.

Military Leave in Michigan

Employees in Michigan who serve in the National Guard or U.S. armed forces are protected by federal USERRA and state laws that guarantee time off for training and active duty. You are not required to pay employees during military leave unless your policy or contract says otherwise, but you must preserve their benefits and reemployment rights as required by law.

You should track military leave separately from vacation and sick time and train managers not to retaliate against employees who take protected service-related leave. Clear documentation and consistent handling will help your company avoid costly disputes.

Jury Duty in Michigan

Michigan law requires you to allow employees time off to serve on a jury and prohibits you from disciplining or firing them for complying with a jury summons. You are not obligated to pay employees for this time unless your policy or a contract provides for paid jury duty leave.

Many employers choose to pay for at least part of an employee’s jury service to support civic participation and maintain goodwill. You may require employees to provide proof of service and to report back to work when they are excused for the day, if practical.

Voting Leave in Michigan

Michigan does not currently require private employers to provide paid or unpaid time off specifically for voting, but you cannot interfere with an employee’s right to vote. Offering flexible scheduling or allowing the use of PTO so employees can reach the polls is a best practice, especially during busy election periods.

You should also avoid policies that penalize employees for serving as election workers if they have advance approval and your operations can accommodate the absence. Clear communication before major elections can reduce confusion and last-minute scheduling conflicts.

Bereavement Leave in Michigan

Michigan law does not mandate bereavement leave, so whether time off is paid or unpaid depends on your company’s policy. Many employers provide 3–5 days of paid leave for the death of an immediate family member and may allow additional unpaid time at the manager’s discretion.

Because bereavement situations are sensitive, you should adopt a compassionate but clearly defined policy and train supervisors on how to apply it fairly. Documenting approvals and any extensions helps you balance empathy with consistent treatment across your workforce.

Termination Process

Michigan is an at-will employment state, so you or the employee may end the relationship at any time for any lawful reason, unless a contract or collective bargaining agreement provides otherwise. You should document performance issues, follow your disciplinary procedures, and provide a written termination notice summarizing the effective date, final pay timing, and benefits information.

Notice Period

Michigan law does not require employers or employees to give advance notice of termination in most private-sector situations. If your company uses employment contracts or policies that promise notice or pay in lieu of notice, you must follow those terms and apply them consistently.

Severance

Severance pay is not required by Michigan law, but you may choose to offer it in layoffs or negotiated separations in exchange for a signed release of claims. Any severance plan or practice should be documented in writing, and you must comply with federal rules on releases, especially for employees aged 40 or older.