The bill amends the Michigan Employment Security Act by updating the definition of "employment" in Section 42. Key changes include clarifying that "employment" encompasses services performed for remuneration under any contract of hire, whether written or oral. The bill specifies that services are considered localized within Michigan if they are performed entirely within the state or if any part of the service is performed in Michigan and the base of operations is also in the state. Additionally, it introduces new criteria for determining employment status, particularly emphasizing that starting January 1, 2026, individuals performing services for a hiring entity must generally be classified as employees unless they meet specific conditions, such as being a separate business entity or fulfilling certain independence criteria.

The bill also retroactively applies to services performed on or after January 1, 2021, and includes various insertions and deletions to refine the language and clarify the conditions under which services are deemed employment. Notably, it updates references to the Internal Revenue Service and the Secretary of Labor, and it allows for reciprocal agreements with other states regarding employment related to aircraft services. Overall, the amendments aim to modernize the employment classification framework in Michigan, ensuring it aligns with contemporary work arrangements and legal standards.

Statutes affected:
House Introduced Bill: 421.42