top of page

Future Budgeting and Planning: A Michigan Business Owner’s Guide for 2026

  • Writer: NWPC Webmaster
    NWPC Webmaster
  • Nov 14
  • 3 min read

As you close out Q4 and strategize for 2026, Michigan businesses must prepare for shifting laws, regulations, and market realities. Planning for the year ahead should center on flexibility, compliance, and smart spending to keep your business ahead in a rapidly changing landscape.


For a detailed 2026 compliance planning checklist tailored for Michigan business owners, download the supplementary PDF resource below.



Some Key 2026 Legal Issues for Businesses


Increase in Minimum Wage and Payroll Costs

  • Michigan’s minimum wage will rise to $13.73 on January 1, 2026, with a jump to $15.00 by 2027 per the Improved Workforce Opportunity Wage Act (MCL 408.934, et seq.).​

  • For tipped workers, the cash minimum wage will be 40% of the standard rate ($5.49/hour) starting January 1, 2026, with further annual increases.​

  • Employers may still apply a tip credit, counting reported tips toward the standard minimum wage, providing flexibility but requiring improved recordkeeping. Each wage hike reduces the tip credit margin, so employers must closely monitor compliance (MCL 408.939).

  • Employers face stricter enforcement, with civil penalties now up to $2,500 per violation of the tipped minimum wage, payroll, or posting requirements. Failure to display current wage posters or to pay required minimums can trigger fines (MCL 408.931, et seq.).

  • From 2026 through 2028, qualified tip income and qualified overtime pay, will be exempt from Michigan state income tax (4.25%). This boosts net earnings for tipped employees and requires businesses to update payroll software, reporting, and communications to ensure staff benefit and compliance is maintained (Public Act 24 of 2025).

  • Suggestions: Update payroll systems now; conduct regular audits of employee classifications, tip and overtime compliance.


Michigan Earned Sick Time Act (ESTA)

  • Enforcement ramps up in 2026, with officials watching time-off, recordkeeping, and employee notifications closely (MCL 408.961 et seq.).

  • Requirements include accrual of one hour of paid sick time per 30 hours worked, up to 72 hours for large employers and 40 hours for small employers, with flexibility for new businesses.​

  • Sick leave covers illness, family care, domestic violence, and emergencies, with multilanguage workplace notices mandatory.

  • Suggestions: Start reviewing policies and ramping up HR training well before 2026.


Extended Unemployment Benefits

  • Maximum unemployment benefits increase from 20 to 26 weeks for claims after April 2, 2025 (MCL 421.27).​

  • Higher weekly benefits and dependent allowances through 2027 mean increased employer costs in layoffs or workforce changes.

  • Robust job market makes recruiting harder, 5.3% job opening rate, over 253,000 open jobs, and a tight labor supply (Michigan Bureau of Labor Statistics, 2025).​

  • Suggestions: Model payroll and unemployment scenarios; invest in retention incentives.


Broadened Regulatory Requirements

  • Over 50 regulatory updates are in review for 2025–26, spanning healthcare, licensing, environmental rules, and economic relief (LARA, 2025).​

  • Suggestions: Schedule annual compliance reviews to catch new obligations and documentation needs.


Tax and Financial Incentives

  • Watch for pending changes in Michigan’s corporate and individual tax rules, reinstated R&D credits, and new transparency mandates.​

  • Michigan enacted state-level R&D credits for 2025, but recent "decoupling" from some federal provisions may limit state-level deductions and impact business planning.​

  • Beneficial ownership reporting obligations are stricter under the Corporate Transparency Act for 2025 and beyond.​

  • Suggestions: Consult your tax advisor; audit entity documents for new reporting requirements and eligibility for credits.


Oxbridge Legal Services can help review your 2026 business plan for compliance and strategy.
Oxbridge Legal Services can help review your 2026 business plan for compliance and strategy.

Michigan’s Economic Outlook for 2026

  • State tax revenues should rise by 3.7% in 2026, fueling improvements in infrastructure and business growth plans (Michigan Senate Fiscal Agency, 2025).​

  • Strategic focus includes workforce expansion, road/street repairs, and opportunities for grants and support, integration of these factors is essential for long-term planning.


Proactive Planning Checklist

  • Update payroll, PTO, and handbook policies for new wage and leave benchmarks.

  • Model various workforce and cost scenarios to stay adaptable to evolving market and compliance realities.

  • Schedule legal or compliance reviews for HR, payroll, and sector regulations.

  • Explore grants, infrastructure funding, and workforce programs launching in 2026.

  • Maintain contingency reserves for unexpected costs and legislative changes.


Next Steps

Work proactively with leaders, HR, finance, and legal advisors to prepare for 2026. Early planning counters risk and positions your enterprise for enduring growth.


If you’d like expert guidance, Oxbridge Legal Services can help review your 2026 business plan for compliance and strategy. Schedule a consultation to move forward with confidence.

bottom of page