The Michigan Labor Law Guide

Minimum wage is the lowest hourly rate an employer must pay nonexempt employees. The federal rate sets a baseline, and states may adopt higher rates.

Current statewide rates

• $13.73 per hour for most employees.
• Minors 16 to 17 years old may be paid 85% of the minimum wage, which currently equals $11.67 per hour.
• Newly hired employees under 20 years old may be paid a training wage of $4.25 per hour for their first 90 calendar days.

Scheduled increase

• The $13.73 rate is scheduled to increase to $15.00 per hour on January 1, 2027.

In Michigan, the minimum wage is set only at the state level. Municipalities are preempted from establishing their own local minimum wages, so the state amount applies identically across all cities.

The tipped minimum wage is the lowest hourly cash wage an employer may pay employees who customarily and regularly receive tips, as long as tips plus cash wages equal at least the applicable minimum wage.

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

This $5.49 rate is 40% of the standard state minimum wage. Tipped employees must report an average of at least $8.24 per hour in tips. If base pay plus earned tips do not equal the standard $13.73 minimum wage, the employer must pay the shortfall.

The tip credit phase-out

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

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 entitled to overtime pay at 1.5 times their regular rate for all hours worked beyond 40 within a 7-day workweek.

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

Compensatory time (comp time)

Unlike federal law, Michigan uniquely permits private-sector employers to provide compensatory time off instead of monetary overtime pay. If agreed 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 must 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.

This break must be documented. Employers are required to keep daily time records reflecting the exact start and end times of the minor's break.

Other than the rules for minors, Michigan law does not require employers to provide meal or rest breaks to adult employees (18 and older). If an employer chooses to offer breaks, federal FLSA rules 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: short rest breaks (typically under 20 minutes) must be paid as regular, compensable working hours.

Vacation leave

Michigan law does not require private-sector employers to offer paid or unpaid vacation leave. Under the Michigan Payment of Wages and Fringe Benefits Act, if an employer provides paid vacation through a written contract or policy, they are bound by the terms of that policy. This includes following the policy's written rules on the forfeiture or payout of accrued, unused vacation when an employee is terminated.

Earned Sick Time Act (ESTA)

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 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. Many employers offer time off based on internal policies, but they are not required 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.

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).

Minors 14 to 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 compliance: most employers are subject to stricter federal laws, which say 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, cannot work after 7 PM. From June 1 through Labor Day, hours may extend to 9 PM.

Minors 16 to 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 standard starting and ending times, provided they have written parental consent. Exceptions also exist for certain agricultural operations.