Bill > HB5007

This bill amends the Michigan Employment Security Act to modify the definition of "employment" and clarify how workers are classified for unemployment insurance purposes. The bill introduces a new classification system for determining whether a worker is an employee, particularly focusing on services performed on or after January 1, 2026. Under the new provisions, an individual performing services for a hiring entity must be classified as an employee unless they meet specific criteria: either they are a separate business entity or they are free from the hiring entity's control, performing services outside the entity's usual course of business, and are independently engaged in a similar trade or profession. The bill also updates language around service performance in various contexts, including interstate and international work, government and nonprofit employment, and service for specific types of businesses. The bill uses the Internal Revenue Service's 20-factor test as a baseline for determining employment status and provides detailed guidelines for how different types of work and worker arrangements should be classified. Importantly, the bill is retroactive and applies to services performed on or after January 1, 2021, which means it can impact employment classifications and unemployment insurance determinations going back to that date.

Government Affairs

https://legislature.mi.gov/Bills/Bill?ObjectName=2025-HB-5007