Michigan employers may find themselves grappling with new employment-related laws and regulations following this week’s election. Unofficial results indicate that Democrats retained the Michigan Senate, reclaimed the Michigan House and elected a Democratic governor — returning unified Democratic control to Lansing for the next legislative term.
Several employment-related bills have fallen short of enactment to date and are unlikely to be passed into law by the end of the year. The election results, however, could improve their prospects if they are reintroduced in 2027.
Key Bills to Watch
Without limitation, key workplace changes to watch for include:
Limited Use of Restrictive Covenants — House Bill 4040
House Bill 4040 would limit the use of noncompetes to owners or management responsible for the sale of the business. Nonsolicitation provisions would be permissible only if the employee makes at least 200% of the federal poverty line for a family of three and the nonsolicit is limited to one year post-employment.
Right to Disconnect — Senate Bill 948
Senate Bill 948 would enact the Workplace Employee Boundaries Act. The bill generally would prohibit employers from requiring employees to monitor or respond to work-related communications outside their usual work hours.
Artificial Intelligence and Electronic Monitoring — Senate Bill 1077 and House Bill 5579
Senate Bill 1077 and its companion House Bill 5579 would create the Responsible Artificial Intelligence Security for Employees Act and could significantly affect employers that use AI-supported recruiting, screening, performance-management, scheduling, productivity, surveillance or analytics tools. As introduced, the bills generally would prohibit employers from using automated decision tools to make employment-related decisions, except to screen large volumes of applications based on hiring criteria or job skills. They also would restrict electronic monitoring to specified purposes, require written notice and consent, provide opt-out rights, require independent third-party impact assessments and annual reassessments, ban tools equipped with facial, gait, voice or emotion recognition technology and require notice to affected individuals of certain data breaches within 48 hours. Finally, the bills would provide employees with the right to initiate private lawsuits and secure civil fines.
Paid Family and Medical Leave Insurance — Senate Bill 1213
Senate Bill 1213 would create a state family and medical leave insurance program. As introduced, the bill would cover employers with one or more employees and fund benefits through payroll contributions. Leave would phase in over time: up to five weeks beginning one year after contributions start, up to 10 weeks beginning two years after contributions start and up to 12 weeks beginning three years after contributions start. Under the proposal, employers with 25 or more employees would remit the full required contribution but could deduct up to half from employee wages. Employers with fewer than 25 employees would remit half the required contribution and could also deduct up to half from employee wages. Employers also would need to restore employees to the same or an equivalent position after leave, maintain health benefits during leave if the employee continues to pay the employee’s share and provide required notices and posters. Employers with an approved private plan would not be required to pay contributions to the state fund.
Notably, Michigan already maintains a law governing employees’ right to earned sick time (i.e., the Earned Sick Time Act). It is unclear whether or how this insurance program would affect employers’ existing obligations under that act.
Worker Classification — Senate Bill 6
Senate Bill 6 would amend Michigan’s Payment of Wages and Fringe Benefits Act to enact an employee-friendly assessment commonly referred to as the “ABC test” for determining whether a worker is a contractor or employee. Under the test, a worker is an employee of a company for which the worker performs services unless (a) the worker is free from control and direction of the company; (b) the worker performs work outside the usual course of the company’s business; and (c) the worker is customarily engaged in an independently established trade, occupation or business.
What Employers Should Do Now
These proposals do not change employers’ current legal obligations, and some may face challenges to being passed even by a Democratic-controlled government. For now, employers should avoid making compliance changes based solely on pending legislation. A practical next step, however, is to identify existing policies and practices that could be affected if one or more proposals move forward — particularly AI governance, monitoring disclosures, after-hours communication expectations, leave administration, the use of restrictive covenants and independent-contractor relationships.
Warner Norcross + Judd’s Labor and Employment group and Government Advocacy and Affairs team will continue to monitor developments and provide updates as Michigan’s legislative agenda takes shape.
