The Michigan Labor Law Guide

Minimum wage is the lowest hourly pay rate employers are legally required to pay nonexempt employees. While the federal minimum wage establishes a baseline, states may adopt higher minimum wage rates.

The current statewide rates are:

• $13.73 per hour for most employees.

  • Upcoming compliance: this rate is scheduled to increase to $15.00 per hour on January 1, 2027.

• Minors (16-17 years old) may be paid 85% of the minimum wage, which currently equals $11.67 per hour.

  • Compliance note: newly hired employees under 20 years old may be paid a training wage of $4.25 per hour for their first 90 calendar days.

Cities that have higher minimum wage:

In Michigan, the minimum wage is set exclusively at the state level; municipalities are legally preempted from establishing their own local minimum wages. Therefore, the state amount applies identically across all cities.

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Tipped minimum wage is the lowest hourly cash wage employers may pay employees who customarily and regularly receive tips, provided the employee’s tips plus cash wages equal at least the applicable minimum wage.

The current rate is: $5.49 per hour for eligible tipped employees. 

• Compliance note: this $5.49 rate represents 40% of the standard state minimum wage. Tipped employees must report an average of at least $8.24 per hour in tips. If an employee's base pay plus their earned tips do not equal the standard $13.73 minimum wage, the employer is legally obligated to pay the shortfall.

The tip credit phase-out 

Following a recent Michigan Supreme Court ruling, the state's tip credit is actively being phased out. The tipped minimum wage will continue to increase annually as a percentage of the standard minimum wage (increasing to 42% in 2027) until tipped workers are eventually entitled to 100% of the standard minimum wage.

In Michigan, under the Improved Workforce Opportunity Wage Act (IWOWA), employers with two or more employees must provide overtime pay to non-exempt employees who work over 40 hours in a single workweek.

Standard overtime

Most non-exempt employees are legally entitled to receive overtime pay at 1.5 times their regular rate of pay for all hours worked beyond 40 within a 7-day workweek. 

Compliance note: Michigan enforces specific state-level overtime exemptions that differ from federal law, including unique exemptions for agricultural workers and certain amusement/recreational employees.

Compensatory time (comp time)

Unlike federal law, Michigan law uniquely permits private-sector employers to provide Compensatory Time Off in lieu of monetary overtime pay. If agreed upon in writing before the work is performed, eligible employees may accrue 1.5 hours of paid time off for every 1 hour of overtime worked.

Under the Michigan Youth Employment Standards Act (YESA), employers are legally required to provide non-exempt employees under the age of 18 with an uninterrupted 30-minute meal and rest break if they work more than 5 continuous hours. 

(Compliance Note: This break must be strictly documented; employers are required to maintain daily time records reflecting the exact start and end times of the minor's break).

Other than the requirements for minors, Michigan law does not require employers to provide meal or rest breaks to adult employees (18 and older). However, if an employer chooses to offer breaks, federal FLSA regulations apply:

• Unpaid meal breaks: the employer must completely relieve the employee of all work duties during the break (typically 30 minutes or more) for the time to be legally unpaid.

• Paid rest breaks: if an employer chooses to offer short rest breaks (typically under 20 minutes), this time must be paid as regular, compensable working hours.

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Vacation leave 

Michigan law does not require private-sector employers to offer paid or unpaid vacation leave. However, under the Michigan Payment of Wages and Fringe Benefits Act, if an employer chooses to provide paid vacation through a written contract or policy, they are legally bound by the terms of that policy. This includes strictly adhering to the policy's written rules regarding the forfeiture or payout of accrued, unused vacation upon an employee's termination.

Earned Sick Time Act (ESTA) 

Compliance Note: Following a 2024 Michigan Supreme Court ruling, the state's reinstated Earned Sick Time Act (ESTA) took effect on February 21, 2025, expanding sick leave requirements across the state.

Under ESTA, eligible employees are entitled to accrue 1 hour of earned sick time for every 30 hours worked. The annual usage caps depend on the employer's size:

• Employers with 10 or more employees: Employees can accrue and use up to 72 hours of paid sick time per benefit year.

• Small businesses (under 10 employees): Employees can accrue and use up to 40 hours of paid sick time per year. Once the 40-hour paid limit is reached, employees may accrue and use up to an additional 32 hours of unpaid sick time within that same year.

Holidays 

Michigan law does not require private-sector employers to provide paid holidays, unpaid holiday leave, or premium pay for working on a holiday. While many employers choose to offer time off based on internal policies, they are not legally obligated to observe public state holidays.

Common Michigan observed public holidays include: New Year’s Day, Martin Luther King, Jr. Day, President’s Day, Memorial Day, Juneteenth, Independence Day, Labor Day, General Election Day, Veterans Day, Thanksgiving Day and the day after, Christmas Eve, Christmas Day, and New Year’s Eve.

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General limits for all minors (under 18) 

Under Michigan’s Youth Employment Standards Act (YESA), minors are generally prohibited from working more than 10 hours in a single day, or an average of 8 hours per day in a week. They cannot work more than 6 days in a single workweek. All minors must have a valid work permit on file, and they cannot work without the on-site supervision of an adult (18 or older).

Specific laws for minors 14–15 years old

• Combined hours: A minor’s combined school and work hours cannot exceed 48 hours in a workweek when school is in session.

• FLSA strict compliance: Most employers are subject to stricter federal laws, which dictate that 14- and 15-year-olds may not work more than 3 hours on a school day, 18 hours in a school week, or 40 hours in a non-school week.

• Curfews: Cannot work before 7 AM. During the school year, they cannot work after 7 PM. From June 1 through Labor Day, work hours may be extended to 9 PM.

Specific laws for minors 16–17 years old

• Cannot work more than 24 hours per week when school is in session.

• Cannot work more than 48 hours per week when school is not in session.

• Cannot work before 6 AM or after 10:30 PM on Sunday through Thursday (school nights).

• Cannot work after 11:30 PM on Fridays and Saturdays when school is in session.

• Cannot work after 11:30 PM on any day of the week during school vacation periods or when not regularly enrolled in school.

Exceptions

Employers may apply to the Michigan Wage and Hour Division for an "hours deviation" allowing 16- and 17-year-olds to work outside of standard starting and ending times, provided they have written parental consent. Exceptions also exist for certain agricultural operations.

Hiring
Candidates in Michigan have the right to equal employment opportunity. Their religion, race, color, national origin, genetic information, age, sex, marital status, height, weight, arrest record, or disability should not be factored into hiring decisions. 

All jobs must be open to both men and women. The only exception is if the employer proves that gender is a bona fide occupational qualification. 

Firing
Michigan employers have the right to terminate employees at will for nearly any reason or no reason at all, as long as the reason is not discriminatory and not considered retaliation.