Commercial cleaning and janitorial insurance in Michigan

Michigan filings, taxes and screening for a cleaning company

Michigan's state requirements for a cleaning company are short. The real work sits in city payroll tax, wage and sick-time law, and the screening your clients run.

Registration

Form your entity with LARA's Corporations Division. A sole proprietor using an assumed name files a certificate with the clerk of each county where the business operates. Register with Michigan Treasury for withholding once you hire. We found no state license for commercial cleaning as a trade.

The bigger local layer is city income tax. Several Michigan cities levy one, and you withhold for employees working there. Detroit taxes residents at 2.4% and nonresidents at 1.2%, Grand Rapids at 1.5% and 0.75%, and Lansing at 1.0% and 0.5%. Ask your CPA how each city's withholding rules apply to crews that move between buildings, and check with each city about local licensing.

Sales tax

Cleaning labor isn't taxed. Michigan's sales tax applies to retail sales of tangible goods, and Treasury's return instructions tell filers not to report nontaxable services that don't involve selling or leasing tangible property. Liners or paper you sell to a client can be taxable sales, and supplies you buy and use up yourself generally carry sales or use tax. Treasury's license FAQ ties the sales tax license to selling tangible goods to the final consumer, so cleaning labor alone doesn't need one. Confirm the current rule with Michigan Treasury or your CPA.

Labor law and schools

We found no Michigan law written specifically for janitorial companies. Two statewide changes hit cleaning payroll hard instead: the Earned Sick Time Act (effective February 21, 2025, with accrual starting October 1, 2025 at employers of 10 or fewer workers) and a minimum wage of $13.73 from January 1, 2026, rising to $15.00 on January 1, 2027.

For schools, MCL 380.1230(1) says a school district, intermediate school district, public school academy or nonpublic school must request a criminal history check from the Michigan State Police and, apart from a limited conditional-start exception, have the report in hand before an individual can regularly and continuously work in its schools under contract. The school makes the request, not you, and the State Police have up to 30 days to return the report. Build that lead time into your start date. More on school accounts is on our school cleaning insurance page.

Michigan comp: thresholds, subcontractors and owner exclusions

Michigan's threshold fits the way cleaning companies staff. Two part-time night cleaners may sit outside the rule under MCL 418.115, but a single full-time day porter kept on for 13 weeks brings the company in.

Uninsured subs become your problem

MCL 418.171 treats the injured workers of an uninsured contractor as the hiring company's own for comp purposes. The hiring company can then try to recover what it paid from the contractor and may require a written agreement to that effect. That's why property managers demand your comp certificate, and why you should collect one from any crew you sub to.

Who can opt out

Under MCL 418.161, a policy endorsement can exclude named partners or the employer's spouse, child or parent. An officer-stockholder owning 10% or more of a corporation with no more than 10 stockholders, or a manager-member owning 10% or more of an LLC with no more than 10 members, may elect to be excluded by written notice to the carrier, with the company's consent endorsed on the notice.

Rating and penalties

Michigan has its own comp data and assigned-risk body, the Compensation Advisory Organization of Michigan, and each carrier files its own comp rates with the state (MCL 500.2406), so your carrier assigns the janitorial class and sets the price. Skipping required coverage is a misdemeanor (MCL 418.641). Penalties can include a fine of up to $1,000 and up to six months behind bars, and every uninsured day counts as a new violation. An injured worker can also sue the uninsured employer in civil court. Rules are on the Workers' Disability Compensation Agency site.

What Michigan cities write into a janitorial bid

Suburban Michigan buyers care as much about who walks into their buildings as about liability limits. The Detroit suburb of Grosse Pointe Woods issued a janitorial Invitation to Bid on May 14, 2025 for a three-year term (July 1, 2025 to June 30, 2028, with an option for one more year). It asked for:

• a certificate showing $1,000,000 combined liability limits
• workers' comp as state law requires
• a $10,000 fidelity bond for the bidder and each employee, covering theft, conversion or misappropriation of the city's money, securities or property
• an employee list by facility, with each cleaner showing a Michigan driver's license or state ID
• warrant and criminal history checks run by the city's Department of Public Safety, then a city photo ID every cleaner must wear to enter

A bond like that is a client-protection tool, not liability insurance; our janitorial bonds guide explains the difference. For the rest of a typical exhibit, see our guide to cleaning contract insurance requirements.

Get a quote for your cleaning business →

How Michigan claims against cleaners are changing

The end of the open-and-obvious defense

In Kandil-Elsayed v F & E Oil (decided with Pinsky v Kroger on July 28, 2023), the Michigan Supreme Court overruled Lugo and held that a land possessor's duty of care no longer turns on whether a hazard was open and obvious. Obviousness now goes to breach and comparative fault, and the Court noted that breach is a question of fact for the jury. In Gabrielson (January 4, 2024), the Court of Appeals held the ruling retroactive, reaching all cases then pending on direct appeal. The ruling speaks to the property owner or tenant in control, but a freshly mopped corridor or a cord across a hallway is now harder for that owner to win on early, and owners often tender those claims to their cleaning contractor. Signage, cleaning logs and limits carry more weight. A bill to restore the old rule (HB 4582) passed the House in March 2026 but was still in a Senate committee in mid-October 2026.

Sick time for every part-timer

Under the Earned Sick Time Act, employees accrue one hour of paid sick time for every 30 hours worked, and part-time night cleaners accrue too. Employers with 10 or fewer workers, counting part-time and temporary staff, may cap use at 40 hours a year; larger employers may cap it at 72. Under the accrual method, unused hours carry over up to those same amounts. Sick time is paid at the greater of the normal rate or the current minimum wage. Get payroll set up right with your CPA or an employment attorney.

Theft accusations inside client buildings

When a laptop or petty cash goes missing from a building your crew cleans, suspicion lands on the cleaners. When a contract requires a bond on every employee and police screening, as Grosse Pointe Woods' bid did, those accusations can turn into bond claims fast.

Michigan cities that shape your contracts

What drives a Michigan cleaning company's premium

Michigan's minimum wage went from $12.48 to $13.73 on January 1, 2026 and is set to reach $15.00 on January 1, 2027, with inflation adjustments starting in 2028 unless state unemployment hits 8.5% or more. Comp is rated on payroll, so crews paid near the floor push premium up with each step, and living-wage contracts in Ann Arbor push it further. Each carrier files its own Michigan comp rates, so we don't print a janitorial rate here.

A janitorial bond's price usually depends on the bond amount and how many employees it covers, and some bonding companies also weigh your credit or time in business. For insurance, your price depends on the payroll in each class code, your annual sales, the kinds of buildings you clean, how much specialty and chemical work you do, the vehicles your crews drive, your claims history and the limits your contracts require. Our insurance cost guide has published ranges.

Get a quote for your cleaning business →

Commercial Cleaning Insurance Group is a brand of The Allen Thomas Group, licensed in Michigan (License #0106519, NPN 7642818).

Michigan contractors from Detroit's suburbs to the west side of the state work with our licensed team, a short drive away in Akron.