Michigan HR Compliance Checklist for Small Businesses (2026 Update)
Michigan employment law has changed a lot in the last 18 months. If you haven't reviewed your HR practices recently, there's a really good chance something is out of date—and in HR, “out of date” usually means “legally risky.”
Here's a practical 2026 Michigan HR compliance checklist every small business owner should run through. Print it out, mark it up, and bring whatever you flag to your next HR conversation.
Quick note: this checklist is for informational purposes only and isn't legal advice. Loop in an HR pro or employment attorney for guidance specific to your situation.
1. Wages and Pay Practices
• Michigan's minimum wage rose to $13.73 per hour on January 1, 2026. Confirm every employee is paid at or above that rate.
• Tipped employees have a separate minimum wage. Verify your tipped wage and tip credit math.
• Overtime: 1.5x the regular rate for all hours over 40 in a workweek. Review your pay practices.
• Make sure your pay periods and paycheck delivery comply with Michigan's Payment of Wages and Fringe Benefits Act.
• Review independent contractor classifications. Misclassification is one of the most common and most expensive HR mistakes I see in Michigan small businesses.
2. Michigan Earned Sick Time Act (ESTA) — New in 2025
Michigan's Earned Sick Time Act took effect February 21, 2025, for employers with 11 or more employees, and October 1, 2025, for employers with 10 or fewer. It's one of the biggest changes Michigan employers have seen in years, and a lot of handbooks are still behind.
• Employees accrue 1 hour of paid sick time for every 30 hours worked
• Employers with 11+ employees: up to 72 hours of accrued sick time per year
• Employers with 10 or fewer: up to 40 paid hours and 32 unpaid hours per year
• Sick time can cover the employee's own illness, a family member's illness, or domestic violence situations
• Your employee handbook needs to reflect this policy
• New hires must be informed of their sick time rights at the time of hire
3. Required Workplace Postings
Michigan employers have to display several state and federal posters in a conspicuous, accessible spot. Fully remote? You need to provide these electronically.
• Michigan Minimum Wage and Overtime poster
• Michigan Paid Medical Leave Act poster
• Michigan Safety and Health Protection on the Job poster
• FMLA poster (required for employers with 50 or more employees)
• Equal Employment Opportunity poster
• Employee Rights Under the NLRA poster
• Your Rights Under USERRA poster
4. Michigan Employee Handbook Essentials
Michigan doesn't legally require an employee handbook, but going without one creates real legal risk. A current handbook should include:
• At-will employment statement
• Anti-harassment and anti-discrimination policy
• Earned Sick Time Act policy, updated for 2025–2026
• FMLA policy (if you have 50 or more employees)
• Remote work policy — especially important for fully remote teams
• Social media policy
• Electronic communications and monitoring policy
• Complaint and investigation procedures
• Disciplinary policy
• PTO and leave policies
If your handbook hasn't been reviewed in the past 12 months, it's almost certainly out of date.
5. Hiring and Onboarding Compliance
• All new hires must complete Form I-9 within 3 days of their start date
• Collect W-4 forms for every employee
• Report new hires to the State of Michigan within 20 days
• Make sure your background check process complies with EEOC guidance and Michigan law
• Audit your job applications. Some jurisdictions prohibit asking about criminal history on the initial application.
6. FMLA Compliance (Employers With 50+ Employees)
• Designate FMLA leave correctly and provide required notices within 5 business days
• Track FMLA usage accurately and apply the 12-month period method consistently
• Provide the WH-381 Notice of Eligibility and Rights form
• Maintain health insurance benefits during FMLA leave
• Restore the employee to the same or an equivalent position upon return
7. Elliott-Larsen Civil Rights Act
The Michigan Supreme Court expanded the Elliott-Larsen Civil Rights Act in 2022 to expressly cover sexual orientation and gender identity. Make sure:
• Your anti-discrimination and anti-harassment policies reflect the expanded protections
• Your managers have been trained on what those protections actually mean in practice
• Complaint procedures are in place and clearly communicated to every employee
How Did You Score?
If you found gaps, you're not alone. Most small businesses I work with have at least two or three items in this list that need attention. The good news: every one of these is fixable. The not-so-good news: waiting makes them more expensive.
At Bloom & Belong, I offer a full Michigan HR Health Check that reviews your policies, practices, and documentation against current state and federal law, then delivers a written report with a clear remediation plan. Most audits wrap in two to three weeks.
Ready to get your HR in order? Book a free HR Health Check at bloomandbelonghr.com. No pitch, no pressure — just clarity. 🌸
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