There are several responsibilities to both the state and federal governments that must be met when hiring employees.  NOTE: If the business is a corporation, anyone who performs services for the corporation or receives remuneration (including any “owners”) is considered an employee.  This list of responsibilities may apply for a start-up or existing business owner.

STATE AND FEDERAL TAXES

Employers are required to register with the Internal Revenue Service, call (800) 829-3676 for Social Security tax, Medicare and federal income tax withholding forms.

The employer is also required to register and file forms for state income withholding with the Michigan Department of Treasury, at (800) 367-6263.

These taxes are withheld from each employee’s wage and paid to the appropriate taxing agency.  Employers are required to pay a portion of the Social Security tax for the employee.  Some cities levy a city income tax.  Contact the local City Treasurer’s Office for further information.

STATE UNEMPLOYMENT INSURANCE

Employers are required to register with the Michigan Unemployment Insurance Agency (UIA) for unemployment taxes.  Contact the Unemployment Insurance Agency, Employer Tax Teams, 3024 W. Grand Blvd., 11th Floor, Tax Office, Detroit, Michigan, 48202; or call (800) 638-3994.  The employer pays unemployment taxes.  No deductions can be made from an employee’s wage to cover these taxes.

FEDERAL UNEMPLOYMENT INSURANCE

Employers are required to pay federal unemployment taxes.  No deduction can be made from an employee’s wage to cover these taxes.  Contact the Internal Revenue Service for the proper tax forms at (800) 829-3676.

WORKERS' COMPENSATION

All employers that regularly employ three or more part-time employees at one time, or employ one or more persons for at least 35 hours per week for 13 weeks during the preceding 52 weeks, are required to have workers’ compensation insurance.  For further information about workers’ compensation, contact the Worker’s Compensation Agency of the Department of Labor & Economic Growth at (888) 396-5041.

NEW HIRE REPORTING

A provision of the Federal Welfare Reform Act requires employers to report to the Michigan Department of Treasury, Post Office Box 85010, Lansing, Michigan, 48908-5010 for basic information on all newly hired or rehired employees within 20 days of hiring.  For further information or to obtain forms, contact the Michigan New Hire Operations Center at (800) 524-9846, or fax (517) 318-1659.

HEALTH AND SAFETY STANDARDS

Employers are required to comply with federal and state health and safety standards and laws throughout the Michigan Occupational Safety and Health Act (MIOSHA).  For a complete set of safety and health standards, contact the Michigan Occupational Safety and Health Administration (MIOSHA), Department of Labor & Economic Growth, Box 30643, Lansing, Michigan, 48909-8143, at (517) 322-1814.

IMMIGRATION LAW COMPLIANCE

All employers are required to verify the employment eligibility of all employees hired after November 6, 1986, by reviewing the employees’ documents and then recording the information on a verification form.  For further information, contact the Immigration and Naturalization Service (INS) at (800) 375-5283 for Michigan use only or (800) 870-3676 for INS Forms Request.  Additional information may also be found at Michigan’s Alien Labor Certification Program web site.

AMERICAN DISABILITIES ACT

Employers are required to comply with the Americans with Disabilities Act.  For informational publications contact the U. S. Department of Justice at (800) 669-3362 – for legal information about the Act call (202) 663-4900.

MINIMUM WAGE

Minimum wage and overtime standards are regulated by the federal and state government.  For federal information contact the U.S. Department of Labor, 211 West Fort Street, Room 1317, Detroit, Michigan, 48226, at (313) 226-7447 or 2920 Fuller, NE, Suite 100, Grand Rapids, Michigan 4905, at (616) 456-2004.  For state information, contact the Wage and Hour Division of the Department of Labor & Economic Growth

Services, Box 30476, Lansing, Michigan 48909, at (517) 322-1814.

AGE RESTRICTIONS

When hiring an employee who is younger than 18, an employer should be aware of restrictions on the type of work, hours that can be worked, and the need for a work permit.  Contact the , Wage and Hour Division of the Department of Labor & Economic Growth, Box 30476, Lansing, Michigan 48909 at (517) 322-1814.

EQUAL EMPLOYMENT OPPORTUNITY

Contact the U.S. Equal Employment Opportunity Commission at (800) 669-3362 for federal forms.  Contact the Michigan Department of Civil Rights, Victor Office Center, 201 N. Washington Square, Suite 700, Lansing, Michigan 48913, or call (517) 335-3165 for public information posters and literature.  Any other information about enforcement or to make a complaint about EEO, call (517) 334-9335.

EMPLOYEE POLYGRAPH PROTECTION ACT

To inquire about the Act, contact the U.S. Department of Labor, Wage and Hour Division, 211 West Fort Street,

Room 1317, Detroit, Michigan 48226, at (313) 226-7447 or (616) 456-2004.

MICHIGAN EMPLOYMENT SECURITY ACT NOTICE TO EMPLOYEE

Contact the Unemployment Insurance Agency, Customer Service Office, 3024 W. Grand Blvd., 11th Floor, Tax Office, Detroit, Michigan, 48202, at (800) 638-3994 for information about the Act.

EMPLOYEES VS CONTRACT LABOR

Individuals may provide services to your businesses as either employees or a contractor.  There are many different tests the IRS may apply to determine whether an individual is an employee or contractor.  Improperly classifying someone whom the IRS considers an employee or a contractor can result in very stiff penalties.  If you wish to consider using contractors instead of employees in your business, it is important that you consult with a competent tax advisor prior to making a decision.