Most employment claims we handle don’t begin with an employer trying to break the law. They begin with a manager who meant well, a payroll practice nobody questioned, or a “we’ve always done it this way” that finally gets tested. By the time a demand letter arrives, that decision is usually months old.
Here are the ten mistakes we see most often from small and mid-sized Michigan businesses.
1. Treating “salaried” as “exempt.” A salary alone doesn’t eliminate overtime; the employee’s actual duties must qualify too. Get it wrong, and the business may owe years of back overtime, often doubled – plus attorney fees.
2. Assuming a 1099 makes someone a contractor. A signed contractor agreement doesn’t settle it. What matters is who controls the work and whether the worker truly runs an independent business.
3. Letting work happen off the clock. The 9 p.m. email. The paperwork after punching out. The working lunch. Fifteen minutes a day adds up fast across a workforce and three years of pay periods.
4. Skipping the paperwork on performance. “She’s been a problem for years” is a hard sell when the personnel file holds nothing but positive reviews. Document problems when they happen, and make sure the file matches what the employee was told.
5. Treating a medical issue as an attendance problem. Before disciplining an employee for absences or work restrictions, ask whether the FMLA, ADA, ESTA, workers’ compensation, or pregnancy protections are in play. Often they are.
6. Missing a complaint because it wasn’t formal. Employees don’t have to say “harassment” or “retaliation” to raise a protected concern. A passing comment about unfair pay or an unsafe machine can be enough.
7. Deciding too quickly that an employee “can’t do the job.” When a medical condition gets in the way, the law expects a real conversation about reasonable accommodation first. Skipping it is a common way employers lose disability claims.
8. Enforcing rules unevenly. A fair decision can still look discriminatory if a coworker got a pass for the same conduct last year. It’s one of the first things a plaintiff’s lawyer looks for.
9. Overlooking new rules for teen workers. As of October 2, 2026, Michigan youth work permits run through the state’s new Youth Employment Permit Portal instead of local schools. If you hire anyone under 18, register your business and review your practices now.
10. Firing first and asking questions later. Before a termination, check for recent complaints, leave requests, injuries, or wage concerns. A routine firing looks very different to a jury once those facts come out.
You don’t need a full HR department to stay out of trouble. You need consistent practices, solid documentation, trained supervisors, and a good sense of when to pick up the phone.
Our employment attorneys help Michigan businesses handle discipline, terminations, complaints, wage questions, and leave issues before they become claims. A short call before you act costs far less than defending the decision afterward.
Unsure how to handle a workplace issue? Contact our Cunningham Dalman’s employment law team.
