Michigan is in the middle of a significant transition in its employment law landscape. The Michigan Supreme Court's 2023 decision in Mothering Justice v. Attorney General restored the original ballot initiative versions of the minimum wage and paid sick leave laws — versions that were substantially more favorable to workers than the Legislature's 2018 amendments. The result is a set of employment standards that are significantly more demanding in 2026 than they were just a few years ago, and Michigan employers who have not updated their compliance programs are at risk.

Michigan Minimum Wage: Improved Workforce Opportunity Wage Act

Michigan's Improved Workforce Opportunity Wage Act (IWOWA), MCL §408.414 et seq., governs minimum wage in Michigan. Following the Michigan Supreme Court's 2023 ruling, the minimum wage has been on an accelerated schedule of increases designed to catch up to the level that the original 2018 ballot initiative contemplated. Key milestones for 2026:

Local Minimum Wages: Michigan does not allow local municipalities to set minimum wages higher than the state minimum. Any local ordinance attempting to set a higher minimum wage is preempted by state law. Michigan employers only need to track one minimum wage rate — the statewide IWOWA rate — unlike employers in states such as California or New York where local rates can significantly exceed the state minimum.

Earned Sick Time Act: Effective February 21, 2025

The Michigan Earned Sick Time Act (ESTA), as restored by the Supreme Court's Mothering Justice decision, became effective February 21, 2025. The ESTA represents a major expansion of Michigan's paid leave requirements compared to the Legislature's 2018 Paid Medical Leave Act. Key provisions:

Employer coverage: Employers with 10 or more employees are required to provide paid sick time. Small employers with fewer than 10 employees must provide unpaid sick time. This lower threshold (10 employees) covers significantly more Michigan employers than the 2018 law (50 employees).

Accrual rate: Employees accrue one hour of earned sick time for every 30 hours worked, with no cap on accrual. However, employers may limit the use of earned sick time to 72 hours per year for large employers (10 or more) and 40 hours per year for small employers (fewer than 10).

Permissible uses: Earned sick time may be used for: the employee's own physical or mental illness, injury, or health condition; a family member's illness, injury, or health condition; medical diagnosis, care, or treatment; domestic violence, sexual assault, or stalking (for medical attention, services, counseling, safety planning, or legal proceedings); public health emergency closure of employer or school.

Carry-over: Unused earned sick time carries over to the following year. Employers may, but are not required to, cap the amount of sick time available for use (not accrual) in a year at 72 hours.

Anti-Retaliation: The ESTA expressly prohibits employers from disciplining, discharging, threatening, or penalizing employees for using or attempting to use earned sick time, filing a complaint under the ESTA, or participating in proceedings related to the ESTA. Violations are subject to civil enforcement by the Michigan Department of Labor and Economic Opportunity and private causes of action by employees.

Elliott-Larsen Civil Rights Act (ELCRA)

The Michigan Elliott-Larsen Civil Rights Act (ELCRA), MCL §37.2101 et seq., prohibits employment discrimination based on religion, race, color, national origin, age, sex, height, weight, familial status, or marital status. ELCRA applies to employers with one or more employees — a notably lower threshold than Title VII (15 employees) or the ADEA (20 employees).

A significant 2023 development: the Michigan Supreme Court in Rouch World v. MDCR confirmed that ELCRA's prohibition of sex discrimination encompasses discrimination based on sexual orientation and gender identity. This aligns Michigan state law with the U.S. Supreme Court's 2020 Bostock v. Clayton County decision under Title VII and means that Michigan employers must ensure their anti-discrimination policies expressly prohibit discrimination based on sexual orientation and gender identity.

ELCRA complaints are filed with the Michigan Department of Civil Rights (MDCR) within 180 days of the discriminatory act. The MDCR investigates, may attempt mediation, and issues a determination. If the complaint is not resolved, the employee may pursue a civil action in circuit court. ELCRA allows for compensatory and punitive damages, and attorney's fees are available to prevailing plaintiffs.

Michigan Ban-the-Box: State Employment Only

Michigan has a limited "ban-the-box" law that applies only to state government employment. The Workforce Opportunity Wage Act and the Fair Employment Screening Act restrict the Michigan state government from asking about criminal history on initial job applications. The restriction does not apply to private employers in Michigan.

However, the City of Detroit and some other Michigan municipalities have enacted local ban-the-box ordinances that apply to private employers within their jurisdictions. Detroit's ordinance prohibits employers with five or more employees from asking about criminal history until after a conditional offer of employment has been made. Michigan private employers should check the local ordinances in their operating jurisdictions.

Non-Compete Enforceability in Michigan: MCL 445.774a

Michigan allows non-compete agreements under the Michigan Antitrust Reform Act (MARA), MCL §445.774a. Unlike California's absolute ban, Michigan enforces non-competes that are: (1) reasonable as to duration, (2) reasonable as to geographic area, (3) reasonable as to the type of employment or line of business, and (4) supported by consideration (including continued employment for existing employees, though Michigan courts are split on whether continued employment alone is sufficient).

Michigan courts apply a "reasonableness" standard similar to most states. Common parameters that Michigan courts have found reasonable include: durations of 1–2 years (longer durations require compelling justification), geographic scope limited to the area where the employee actually worked or competed, and activity restrictions limited to the specific type of work performed. Michigan courts have occasionally blue-penciled overly broad non-competes by reforming the geographic scope or duration rather than voiding the agreement entirely.

Consideration for Existing Employees: Michigan case law is unsettled on whether continued employment alone constitutes adequate consideration for a non-compete signed by an already-employed worker. To reduce this risk, employers should tie non-compete agreements to a raise, promotion, bonus, or other economic benefit that occurs at the same time the non-compete is signed. This creates a clear consideration record.

Michigan Wage and Hour Compliance Checklist for 2026

Michigan employers should verify compliance with the following requirements for 2026:

Michigan's employment law landscape continues to evolve, and 2025–2026 has been a particularly active period for new requirements. Employers who have not conducted an employment law compliance audit since 2023 should prioritize doing so in 2026, particularly with respect to the ESTA paid sick leave requirements and the minimum wage increases that have taken effect under the restored ballot initiative schedule.