Here are a few key items to consider before your next trip:

Why These Steps Matter

Before any trip, it's worth taking a moment to make sure your legal documents are current and accessible. An outdated will, a missing power of attorney, or a healthcare directive no one can locate can create real complications, especially when you're far from home. A brief review before you leave ensures that if something unexpected happens, your wishes are clear and the people you trust are empowered to act.

Recommended Actions

What must go into the equation when the family home is at stake

As the calendar has turned to April, the focus for many Michigan businesses and residents has shifted toward the rapidly approaching tax deadlines. While filing returns is often viewed as a purely financial task, the information reported to the IRS and the Michigan Department of Treasury serves as a permanent legal record of your operations, asset ownership, and workforce structure.

In 2026, several significant shifts in both state and federal law make this tax season an ideal time to ensure your legal documentation matches your financial filings.

Key Deadlines for April 2026

Understanding which deadlines apply to your specific entity is the first step in avoiding late-filing penalties and maintaining good standing:

• Wednesday, April 15: The deadline for filing individual 2025 federal and Michigan income tax returns. This is also the due date for the first quarter (Q1) 2026 estimated tax payments for individuals and small business owners.
• Wednesday, April 15: The final day to make 2025 contributions to an IRA or Health Savings Account (HSA).
• Thursday, April 30: The due date for Michigan Corporate Income Tax (CIT) annual returns for calendar year filers. Corporations with gross receipts exceeding $350,000 must ensure their Michigan filings are accurate to maintain their corporate protections.

New Michigan Tax Opportunities: HB 4961

The Intersection of Tax Filing and Legal Protection

Why These Steps Matter

Recommended Actions

To ensure your legal records support your tax filings, we recommend prioritizing these specific actions this month:

• Match Your Minutes: Verify that your corporate resolutions and minutes reflect the same business activities and entity structure you are reporting to the IRS and State of Michigan.
• Audit Worker Classifications: Review that every Employee is correctly identified in your contracts to ensure your payroll tax filings are legally defensible.
• Confirm Asset Ownership: Check that any assets being depreciated or reported on your returns are legally titled in the name of the correct individual or entity to avoid future audit complications.

Properly classifying workers as employees or independent contractors remains one of the most important compliance issues facing businesses. Misclassification can result in wage claims, tax consequences, benefit disputes, and potential penalties.

While independent contractors offer flexibility, simply labeling a worker as a contractor does not determine their legal status. Government agencies evaluate factors such as the level of control over the work performed, the method of payment, the provision of tools and equipment, and the overall nature of the working relationship.

Why Classification Matters

Worker classification affects several key areas, including:

• Minimum wage and overtime requirements
• Unemployment insurance obligations
• Workers’ compensation coverage
• Payroll tax responsibilities
• Eligibility for employee benefits

Improper classification can create exposure under both state and federal law. Potential consequences may include:

• Liability for unpaid minimum wage or overtime
• Retroactive payroll tax assessments and penalties
• Unemployment insurance contributions and interest
• Workers’ compensation disputes
• Employee benefit claims
• Civil fines or agency audits

Because different agencies apply their own legal standards, a classification issue in one area can trigger review in others.

Why These Steps Matter

• Avoid penalties and claims under Michigan’s updated employment laws

• Strengthen legal protections for your business

• Prevent probate complications and ensure your estate plan functions as intended

• Lower your family’s financial and legal risks

• Improve tax outcomes for both individuals and businesses

• Position your company for a smoother and more compliant start to 2026

Recommended Actions

The first quarter of the year is often an great time for businesses to review contractor agreements, job descriptions, and payroll practices. As enforcement trends continue to evolve, ensuring that worker classifications reflect the actual working relationship is an important risk management step.

Daudi & Kroll PC works with employers to review independent contractor relationships, assess compliance considerations, and update agreements where appropriate. Proactive review can help reduce disputes and strengthen workplace practices. For guidance or a consultation, call us at (734) 351-5578.

Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at adil@daudikroll.com or (734) 351-5578.

Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.

Michigan has enacted new legislation requiring public school districts to restrict student cellphone use during instructional time beginning in the 2026–27 school year.

House Bill 4141, signed by Governor Gretchen Whitmer on February 10, 2026, requires K–12 school districts to develop and implement policies prohibiting the use of smartphones, tablets, and certain electronic devices during classroom instruction. The law follows similar measures adopted in other states aimed at reducing digital distractions, improving classroom focus, and addressing concerns such as cyberbullying.

Importantly, students are still permitted to bring phones to school. Devices may remain on campus, including in lockers or stored outside the classroom, but may not be used during instructional time except in limited circumstances such as emergencies, medical needs, or teacher-approved educational purposes.

School districts must prepare and publish compliant policies prior to the start of the upcoming school year.

What This Means for Schools and Families

School administrators should begin reviewing and updating student codes of conduct, technology policies, and parent handbooks to ensure alignment with the new statewide requirement. Clear communication with families and staff will be essential to support smooth implementation.

Parents may wish to review their district’s updated policies once released to better understand expectations for the coming school year and discuss device rules with their children in advance.

Recommended Actions

As districts prepare for implementation, schools should review policy language, clearly define instructional time, outline permissible exceptions, and establish consistent enforcement procedures. Providing advance notice to families and training staff on application of the policy can help ensure a smooth transition.

Families can also take proactive steps by reviewing school policies once issued, discussing expectations with their children, and planning practical arrangements such as locker storage or after-school communication procedures.

Daudi & Kroll PC works with educational institutions and families to provide guidance on policy interpretation, compliance considerations, and related legal questions. Proactive planning can help reduce disputes and support a positive learning environment. For guidance or a consultation, call us at (734) 351-5578.

Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at adil@daudikroll.com or (734) 351-5578.

Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.

Conduct an Internal Worker Classification Audit

Misclassifying employees as independent contractors can create significant liability under state and federal law. Conducting a proactive internal audit can help ensure workers are properly classified by reviewing factors such as control over duties, provision of tools, payment structure, the role of services in your business, and the permanency of the relationship. Updating agreements to reflect the actual working relationship and periodically reviewing classifications with legal counsel can reduce exposure to back wages, tax penalties, unemployment claims, and benefit disputes, while supporting long-term compliance.

Happy New Year from Daudi & Kroll P.C.!!!

As we begin 2026, we want to thank you for trusting Daudi & Kroll PC with your legal needs. We value the opportunity to work with you and look forward to continuing our relationship in the year ahead while striving to exceed your expectations.

Unemployment Insurance Changes Effective January 1, 2026

Beginning January 1, 2026, Michigan’s unemployment insurance system includes an increase to the maximum weekly unemployment benefit. This change is part of a phased update adopted by the State and may impact employers differently depending on how they participate in the unemployment system.

Most for-profit employers pay unemployment insurance taxes, and benefit adjustments are absorbed within the system over time. However, certain employers, including nonprofits and governmental entities, may reimburse the State directly for unemployment benefits paid to former employees. For these employers, higher benefit amounts may result in increased reimbursement costs per claim, making awareness and planning especially important.

Michigan Minimum Wage Increase

Michigan’s minimum wage also increased from $12.48 to $13.73 as of January 1, 2026, under previously enacted legislation. This adjustment affects employers across many industries and may require updates to payroll practices, wage notices, and budgeting considerations.

Employers may wish to review compensation structures and ensure compliance with current wage requirements as part of their planning for the new year.

A New Year Reminder: Reviewing Estate Planning Documents

The start of a new year is a natural time to review estate planning documents. Plans created years ago may no longer reflect current family circumstances, assets, or personal priorities.

Even without making immediate changes, periodic reviews can help ensure that existing documents continue to align with your intentions and provide clarity and peace of mind for you and your loved ones.

How We Can Help in 2026

In 2026, our firm remains committed to providing thoughtful guidance across a range of legal matters, including estate planning, business planning, and employment related issues. As laws and regulations evolve, we will continue to share general updates and work with our clients to help them stay informed and prepared.

At Daudi & Kroll, we help Michigan employers and families navigate these changes with confidence. For guidance or a consultation, call us at (734) 351-5578.

Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at adil@daudikroll.com or (734) 351-5578.

Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.

Kick Off 2026 with Policy Updates Start the year strong by reviewing your workplace policies. Ensure handbooks cover anti-harassment, discrimination, and reporting procedures. Train managers and employees on expectations and anti-retaliation protections. Clear, up-to-date policies help prevent disputes, promote fairness, and keep your workplace compliant.

As 2025 comes to a close, both families and business owners in Michigan face important legal and financial deadlines that can significantly impact risk, taxes, compliance, and long term planning. Several new Michigan laws, especially in employment and business compliance, are already in effect, and year end is also the ideal time to update personal estate plans and family financial protections.

To help clients prepare, we have outlined essential steps every Michigan household and business should consider completing before the end of the year.

Key Developments

1. Michigan Employment Law Compliance Deadlines for Business Owners

Michigan’s updated employment laws, including the Earned Sick Time Act (ESTA), new record keeping rules, and minimum wage increases, are now fully active. Year end is the right time for employers to audit internal documentation and ensure compliance.

What Businesses Should Do Now:

• Update employee handbooks and policies to align with ESTA accrual, usage, and anti-retaliation rules.
• Confirm payroll systems are correctly tracking hours worked, sick time accrued, and sick time used.
• Review minimum wage and tipped wage increases set for January 1, 2026.
• Train managers on approval procedures and documentation requirements.
• Update new hire packets with required notices and sick leave summaries.

2. Business Year End Planning: Contracts, Records, and Tax Strategy

Year end is often the best moment for corporations, LLCs, and partnerships to ensure their business structure and contracts still match their goals. Proactive updates help minimize legal exposure and improve tax efficiency heading into the new year.

Recommended Business Actions:

• Conduct an annual review of operating agreements, shareholder agreements, and buy-sell provisions.
• Ensure annual meeting minutes and corporate records are properly maintained.
• Revisit independent contractor agreements, employment contracts, and vendor contracts to confirm compliance with recent legal changes.
• Review tax classifications, distributions, and compensation arrangements before closing the books for 2025.
• Evaluate whether 2026 restructuring, such as a new entity, merger, or dissolution, should be planned now.

3. Estate Planning: A Critical Year End Review for Families

Estate planning documents should be reviewed annually to account for major changes in the law, finances, or family structure. If you have welcomed a child, bought a home, changed jobs, or started a business in the last year, updating your estate plan is essential. Year end is a perfect moment to confirm your plan still reflects your wishes.

Every Michigan family should review:

• Wills and trusts to ensure beneficiaries, trustees, and guardians are current.
• Powers of attorney and healthcare powers of attorney, which should be updated every few years to avoid banks or hospitals rejecting outdated documents.
• Trust funding, to confirm that homes, bank accounts, and business interests are properly titled in the trust.
• Life-insurance policies and beneficiary designations.
• Charitable giving or end-of-year tax strategies.

4. Coordinated Planning for Business Owners With Families

For clients who own a business, personal and business planning overlap. Year end is the ideal time to evaluate:

• Whether successor trustees or powers of attorney have authority to manage the business if you become incapacitated.
• Whether buy-sell agreements align with your trust or estate plan.
• Whether key person insurance, disability coverage, or business continuity plans need updating.
• Whether membership interests or shares must be retitled into a trust to avoid probate.

Why These Steps Matter

• Avoid penalties and claims under Michigan’s updated employment laws

• Strengthen legal protections for your business

• Prevent probate complications and ensure your estate plan functions as intended

• Lower your family’s financial and legal risks

• Improve tax outcomes for both individuals and businesses

• Position your company for a smoother and more compliant start to 2026

Recommended Actions

Before December 31, employers should audit their handbooks, update policies, and verify that payroll practices comply with Michigan’s 2025 employment law requirements. Families are advised to review and update their wills, trusts, powers of attorney, and beneficiary designations to ensure their plans are current. Business owners should complete corporate records, review contracts, and coordinate estate planning documents with business succession plans to safeguard the future of their enterprises.

At Daudi & Kroll, we help Michigan employers and families navigate these changes with confidence. For guidance or a consultation, call us at (734) 351-5578.

Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at adil@daudikroll.com or (734) 351-5578.

Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.

Update Policies for Michigan Labor Law Michigan employers must ensure handbooks, PTO, and sick-leave policies comply with the Earned Sick Time Act and updated minimum-wage rules. Track hours worked, leave accrued, and usage accurately, and retain records for at least three years. Train managers on approvals, documentation, and anti-retaliation rules. Provide employees with updated policy summaries and rights notices. Staying proactive reduces compliance risks, prevents disputes, and promotes a fair, transparent workplace.

Michigan employers have now passed key compliance deadlines and must ensure that employee handbooks, policies, and documentation practices are fully aligned with the latest Michigan employment law changes, especially under the Michigan Earned Sick Time Act (ESTA) and updated Michigan minimum‑wage rules. These revisions are not optional; they’re essential for ongoing compliance and risk management.

Key Developments

1. Earned Sick Time Act: What’s in Effect Now

As of February 21, 2025, nearly all Michigan employers are covered under the reinstated Earned Sick Time Act. Under this law, employees accrue one hour of paid sick time for every 30 hours worked. Large employers (those with 10 or more employees) must provide up to 72 hours of paid sick time each year, while small employers (fewer than 10 employees) are required to provide up to 40 hours of paid and 32 hours of unpaid leave.

Employees may use earned sick time for their own health needs, to care for family members, for preventative care, or for issues related to domestic violence or sexual assault. Employers may require reasonable notice before absences, but documentation can only be requested for absences longer than three consecutive days. Existing PTO, vacation, and sick-leave policies should be reviewed to ensure compliance with ESTA’s accrual and usage standards. Employers may consolidate policies into a general PTO bank, as long as the total leave provided meets or exceeds ESTA’s requirements.

2. Updated Record-Keeping and Documentation Requirements

The new Michigan law increases the emphasis on accurate and transparent documentation. Employers must now track each employee’s hours worked, sick time accrued, and sick time used, and retain these records for at least three years. Additionally, employers must make policy details and leave summaries available to employees upon request.

Failure to maintain or produce these records could expose an employer to fines or civil penalties if a complaint is filed with the Michigan Department of Labor and Economic Opportunity. To avoid compliance issues, businesses should review their payroll systems, ensure consistent reporting, and confirm that all policies are properly documented and accessible.

3. Handbook and Policy Review Checklist

Now that all major provisions of Michigan’s new employment laws are in effect, employers should perform a comprehensive review of their internal policies. This includes updating employee handbooks to reflect the ESTA and Michigan minimum-wage changes, revising attendance and call-in procedures, and ensuring disciplinary processes align with the law.

New-hire packets should include updated rights notices and summaries of Michigan’s sick-leave requirements. Managers and supervisors should be trained on documentation standards, approval processes, and anti-retaliation rules. Payroll and HR systems should also be evaluated to confirm that accrual, carryover, and usage tracking are automated and auditable.

4. Michigan Minimum-Wage and Tipped-Wage Changes

Michigan’s minimum-wage rates continue to rise under the updated schedule. The regular state minimum wage is $12.48 per hour as of February 21, 2025, increasing to $13.73 per hour on January 1, 2026, and $15.00 per hour on January 1, 2027.

For tipped employees, Michigan law requires a minimum of 38% of the state minimum wage in 2025, with gradual increases to 50% by 2031. Employers must ensure that tipped employees’ total earnings (base wage plus tips) meet or exceed the applicable Michigan minimum wage.

5. Why Compliance Matters

Full compliance with Michigan’s updated labor laws is now expected. Proactive policy updates and consistent documentation protect employers from penalties while fostering a fair and transparent workplace. Accurate record-keeping, clear communication, and well-trained supervisors also reduce the likelihood of disputes and strengthen employee trust.

Beyond avoiding fines, compliance ensures operational consistency, builds credibility, and promotes a healthier company culture: one where both employees and employers understand their rights and responsibilities.

Recommended Actions

Employers should review employee handbooks, policies, and record-keeping practices to ensure compliance with Michigan’s updated labor laws, including the Earned Sick Time Act and minimum-wage requirements. Train managers on documentation, approval processes, and anti-retaliation rules, and confirm payroll systems accurately track accrual, carryover, and usage.

Provide employees with updated policy summaries and new-hire materials so rights and responsibilities are clear.

At Daudi & Kroll, we help Michigan employers navigate these changes with confidence. For guidance or a consultation, call us at (734) 351-5578.

Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at adil@daudikroll.com or (734) 351-5578.

Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.

Monitor Non-Compete Agreements Even though the FTC’s nationwide ban on non-compete agreements was blocked, the agency continues to monitor and enforce them on a case-by-case basis. Employers should ensure non-compete clauses are reasonable in scope, duration, and geographic reach, while employees should review any agreements they’ve signed. Staying informed of FTC guidance and enforcement trends helps both employers and workers navigate these agreements safely and effectively.

FTC Revises Approach to Non-compete Agreements

The Federal Trade Commission (FTC) has recently announced significant changes to its enforcement strategy regarding non-compete agreements: contracts that limit an employee’s ability to work for competitors after leaving a company.

Key Developments

1. No Nationwide Ban

The FTC previously issued a rule that would have broadly prohibited most non-compete agreements nationwide. Courts, however, blocked the rule, finding the FTC lacked authority to enforce it. The agency has now accepted the court’s decision, meaning there is no longer a nationwide ban on non-competes.

2. Case-by-Case Enforcement Continues

Although the broad rule is no longer in effect, the FTC remains vigilant. The agency can pursue individual enforcement actions against employers who impose unfair or anti-competitive non-compete agreements. For instance, the FTC recently filed a complaint against Gateway Services (In the Matter of Gateway Services, Inc. and Gateway US Holdings, Inc.), alleging that the company restricted nearly all of its employees from working in the same industry after leaving the company.

3. Request for Public Input

The FTC has issued a Request for Information (RFI) to collect data on how non-compete agreements are used and their impact on workers and competition. The agency will use this information to guide future enforcement priorities and potential rulemaking.

Implications for Employers

• Review Current Agreements: Ensure that non-compete clauses are reasonable in scope, duration, and geographic reach.
• Monitor Enforcement Trends: Stay informed about FTC investigations and public guidance, which may indicate areas of heightened scrutiny.
• Consider Alternative Protections: Non-disclosure agreements, non-solicitation clauses, and confidentiality agreements may provide necessary protections without imposing broad non-compete restrictions.

Implications for Employees

• Understand Your Rights: Even though the nationwide ban was vacated, non-compete agreements may still be enforced under certain circumstances or state law.
• Evaluate Your Agreement: Review any existing non-compete to understand restrictions and seek guidance if necessary.

Recommended Actions

Employers should conduct a thorough review of their restrictive covenants and adjust policies where appropriate. Employees should familiarize themselves with any agreements they have signed. Maintaining awareness of FTC guidance and enforcement trends is critical for both employers and workers navigating the evolving landscape of non-compete agreements.

Your workforce is one of your most valuable assets, and non-compete agreements can be an important tool to protect your business interests. At Daudi & Kroll, we help employers and professionals navigate non-compete agreements with clarity and confidence, ensuring your agreements are enforceable and tailored to your goals. Our team is committed to making the process straightforward and effective. To schedule a free consultation, please reach out to our office at (734) 351-5578.

Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, and corporate restructuring strategies. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at adil@daudikroll.com or (734) 351-5578.

Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.

Whistleblower Protections Speaking up about illegal or unethical activity at work can feel risky, but it’s also an important way to protect your workplace—and yourself. Federal and state laws exist to protect whistleblowers from retaliation, but knowing your rights and the right steps to take is key. Keeping clear records, understanding reporting procedures, and seeking guidance can help ensure your concerns are heard safely and effectively.