Navigating hourly employment in Michigan presents unique challenges, particularly with minimum wage rules.
State requirements can interact with federal standards, and in some areas, local rules may layer on additional obligations for employers.
Michigan’s wage and hour landscape is evolving quickly.
The state’s minimum wage will rise significantly in 2025, and updates to the state’s paid sick leave law will also take effect. Employers must pay close attention to these changes to remain compliant, especially as state preemption limits local governments from setting separate wage or leave ordinances.
Whether managing staff directly or through an Employer of Record (EOR) like HireArt, understanding Michigan’s employment standards is essential to maintaining compliance and protecting your workforce.
This blog is based on information available to HireArt as of October, 2025. HireArt does not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and should not be relied on for, tax, legal or accounting advice. Consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
Michigan’s minimum wage is increasing as part of a state-level adjustment that takes effect in early 2025.
As of February 21, 2025, the minimum wage will increase from $10.56 to $12.48 per hour. The state preempts local jurisdictions from enacting separate minimum wage laws, ensuring consistency statewide. Employers should monitor official announcements from the Michigan Department of Labor and Economic Opportunity (LEO) for any rate updates or clarifications.
Employers must follow the higher applicable rate between state and local law.
Michigan’s paid sick leave requirements have been reinstated and strengthened for 2025.
The updated Earned Sick Time law expands access to paid leave, covering more employees and increasing the accrual and usage caps compared to previous rules. Employers should review updated guidance from the Michigan LEO to configure their accrual, carryover, and usage policies to comply with the new requirements.
Michigan’s state laws preempt local governments from enacting their own minimum wage or paid leave ordinances.
This means employers across the state follow one uniform standard for wage and leave compliance, simplifying administration for multi-location businesses.
Michigan does not require meal or rest breaks for adult employees.
Employers should follow their own internal policies, collective bargaining agreements (CBAs), or the Fair Labor Standards Act (FLSA) for guidance. While not required, offering regular rest periods can support workplace safety and productivity.
Payment of unused paid time off (PTO) at termination is determined by the employer’s written policy or employment contract.
If an employer’s policy classifies accrued vacation or PTO as earned wages, it must be paid out upon separation. Employers should ensure all policies are clearly documented and communicated to avoid disputes.
Reimbursement obligations in Michigan are guided by employer policy and wage deduction laws.
There is no general statewide requirement to reimburse business-related expenses, but employers must comply with state limits on wage deductions. Written policies should specify which expenses are reimbursable and how employees can submit requests.
Michigan requires employers to provide detailed pay statements and to issue final wages in a timely manner.
Accurate pay records and timely payments support compliance and demonstrate fair employment practices.
Michigan applies both federal and state economic-realities tests to determine worker classification.
If an employer controls how, when, or where work is performed, the worker should be classified as an employee (W-2). Misclassification can lead to fines, back pay liability, and tax penalties at both the state and federal levels.
HireArt acts as an Employer of Record (EOR) to help employers manage compliance with Michigan’s evolving labor laws. Through HireArt, companies can:
By partnering with HireArt, employers can stay ahead of legal changes, streamline HR operations, and maintain consistent, compliant employment practices across Michigan.
