How do Michigan wage, overtime and meal break laws work in 2026?

For payroll, the tipped rule is the one to watch. The cash wage is $5.49, but you carry the top-up: if tips in a pay period do not lift the employee to $13.73 an hour, you make up the difference. A tipped worker has to clear at least $8.24 an hour in tips before the credit applies, and the burden of proving it sits with you.

The current numbers come out of the 2025 settlement of the Mothering Justice litigation, which restored the voter-initiated wage law and put both the standard and tipped rates on a rising schedule through the end of the decade. Budget for a step up every January rather than treating this year's $13.73 as fixed. Local Michigan governments do not set their own minimum wage, so the same rate applies in Detroit, Grand Rapids and the Upper Peninsula alike. If you're comparing Michigan's wage exposure across the border, see how Ohio's minimum wage and Wisconsin's minimum wage sit relative to Michigan's $13.73 floor.

Because Michigan counts the week and not the day, a compressed schedule of four ten-hour days carries no overtime cost here. The only thing that creates overtime is total hours over 40 in the week, so the work is accurate weekly time capture, not policing shift length. Your Michigan sick leave hours count as paid time and affect that weekly total too, so factor them into your time records.

The federal Fair Labor Standards Act sits underneath the state rule and reaches almost every employer, so the safe assumption for a Teamed-employed worker is that the 40-hour week applies regardless of size or sector. Where the state and federal rules overlap, the one more generous to the employee governs. Use Teamed's employer cost calculator to see how overtime hours translate into total Michigan payroll cost before you commit to a headcount plan.

For adult staff you're free to set your own break policy, and you do not have to schedule or pay for meal or rest breaks at all. Where you do offer a short rest break, US DOL Wage and Hour Division field guidance treats breaks under 20 minutes as paid time worked, so a five or ten-minute pause still counts toward the 40-hour week. A genuine unpaid meal break has to fully relieve the employee of duty.

For minors the rule is firm and comes from the Youth Employment Standards Act: a 30-minute meal and rest period once an under-18 employee passes 5 continuous hours, and it has to be documented in the time records. Michigan's break obligations are lighter than Wisconsin's, where written break policies are standard practice even for adults. Most employers simply apply one written break policy to everyone, which keeps the minor rule satisfied by default. For the full picture of Michigan's workforce rules, see Michigan termination law and at-will exceptions.

A standard week in Michigan is 40 hours, and anything above that for a non-exempt worker is overtime at 1.5 times pay. Misclassifying a salaried worker as exempt is the expensive error: if the $684-a-week salary basis or the duties test is not met, every over-40-hour week becomes back-pay, regardless of the job title on the contract. The DOL Wage and Hour fact sheet 17A sets out the full duties test.

Federal Social Security, Medicare and FUTA sit on top of the state picture. On wage and hour the $684 salary line and the 40-hour week are the two numbers that decide whether a hire owes overtime. Get those right, alongside the rising minimum wage covered in Michigan state tax and UI, and Michigan is a clean state to run. The employer of record model keeps the exemption test on Teamed's side of the ledger, not yours.

Real HR and legal experts handle your Michigan hires and know the rising $13.73 minimum, the tipped top-up to $13.73, and the federal $684 salary line by heart. An actual person, not a chatbot or a pooled queue. Overtime, the annual wage step, and exemption testing are computed and pass through at cost, itemised and auditable on every invoice. No setup fee, no exit fee.

Contractor onboarding, EOR payroll, and entity graduation all live on one platform: a Michigan contractor who converts to W-2 keeps their record, and that same employee can graduate to your own US entity when the model no longer fits, without switching systems. Use the Crossover Calculator to see the month the model flips, or the employer cost calculator to model the full Michigan payroll cost. EOR is the right model for Michigan, until it isn't. You can also review how Teamed handles Michigan paid sick leave and at-will termination on the same platform.