Hiring New Employees in Michigan: A Legal Guide

Create a clear job description that outlines the position's responsibilities, required qualifications, and compensation. Ensure the job posting complies with Michigan's anti-discrimination laws and does not include any language that could be interpreted as discriminatory based on protected characteristics.

Develop an application form that collects necessary information from candidates while complying with Michigan employment laws. Avoid questions about age, race, religion, national origin, disability, or other protected characteristics. Include a statement about being an equal opportunity employer.

When interviewing candidates, ensure all questions are job-related and non-discriminatory. Document the interview process and reasons for selection to demonstrate compliance with equal employment opportunity laws. Michigan is an at-will employment state, but fair hiring practices must still be followed.

Draft an offer letter that includes the position title, start date, compensation, benefits, and employment status (full-time, part-time, at-will). In Michigan, employment is presumed to be at-will unless specified otherwise. The letter should request the candidate's written acceptance.

If offering more than at-will employment, prepare a formal employment contract. In Michigan, employment contracts that specify terms of employment, duration, or termination conditions will override the at-will presumption. Include clear language about duties, compensation, benefits, term of employment, and grounds for termination.

Create an NDA to protect your company's confidential information. In Michigan, NDAs are generally enforceable if they're reasonable in scope and duration. Clearly define what constitutes confidential information and the employee's obligations to protect it.

If necessary, draft a non-compete agreement. In Michigan, non-compete agreements are enforceable if they protect legitimate business interests and are reasonable in duration, geographic scope, and type of employment restricted. The agreement must be supported by consideration (something of value given to the employee).

Create a form that complies with the Fair Credit Reporting Act (FCRA) and Michigan law. The form must be clear, conspicuous, and standalone (not part of the employment application). Obtain written consent before conducting any background checks.

After receiving signed authorization, conduct background checks in compliance with Michigan law. If you decide not to hire based on the background check, you must follow the adverse action procedures required by the FCRA, including providing pre-adverse action and adverse action notices.

Employers in Michigan must report all newly hired employees to the Michigan New Hire Operations Center within 20 days of hire. This is required by federal and state law for child support enforcement purposes.

Complete the Michigan New Hire Reporting Form with the employee's name, address, Social Security number, and date of hire, along with the employer's name, address, and Federal Employer Identification Number (FEIN). This can be submitted online through the Michigan New Hire Operations Center.

Federal law requires all employers to verify employment eligibility using Form I-9 within 3 business days of the employee's start date. The employee must complete Section 1 on their first day, and you must complete Section 2 after reviewing their identity and employment authorization documents.

Have the employee complete a federal W-4 form to determine federal income tax withholding. This form must be kept on file and used to calculate proper tax withholding for the employee.

Have the employee complete Michigan Form MI-W4 for state income tax withholding. Michigan has a flat income tax rate, but employees can still claim exemptions that affect withholding amounts.

Michigan law requires employers to provide workers' compensation insurance for all employees. Contact your insurance provider to add the new employee to your policy. Failure to provide workers' compensation coverage can result in significant penalties.

Michigan employers must display certain posters in the workplace, including those related to minimum wage, safety, discrimination, and unemployment insurance. Ensure all required federal and Michigan-specific posters are displayed in a prominent location accessible to all employees.

Create a form for employees who wish to have their wages directly deposited. In Michigan, employers cannot require direct deposit as the only method of payment unless certain conditions are met, so this should be presented as optional.

Create a form to collect emergency contact information from the new employee. While not legally required, this is a best practice for workplace safety and emergency preparedness.

If offering benefits such as health insurance, retirement plans, or paid time off, prepare the necessary enrollment forms. In Michigan, employers are not required to provide these benefits, but if offered, they must be administered in compliance with federal laws like ERISA, COBRA, and the ACA.

Develop an employee handbook that outlines company policies, procedures, and expectations. In Michigan, certain policies should be clearly documented, including anti-discrimination, anti-harassment, paid medical leave (if applicable under the Paid Medical Leave Act), and at-will employment disclaimers. Have the employee acknowledge receipt of the handbook.

Schedule an orientation session to review company policies, safety procedures, and job expectations. This should include training on any required safety protocols and workplace policies. Document the completion of orientation and any training provided.

Ensure the employee is properly set up in your payroll system with the correct tax withholding based on their W-4 and MI-W4 forms. Michigan employers must withhold federal income tax, state income tax, and FICA taxes (Social Security and Medicare).

If this is your first employee in Michigan, register with the Michigan Unemployment Insurance Agency (UIA). All employers must contribute to unemployment insurance for their employees based on their payroll and experience rating.

If your business has 50 or more employees, you must provide eligible employees with paid medical leave in accordance with Michigan's Paid Medical Leave Act. Eligible employees accrue 1 hour of paid medical leave for every 35 hours worked, up to 40 hours per year.