The small business owner believes the laws, which will come into effect in Victoria from September 1, will create a "two-tier" system in workplaces, dividing employees who can work from home from those who cannot.
Premier Jacinta Allan says the changes will do the opposite, helping workers save money, cut their commute and boost workforce participation.
All businesses will be roped into the policy to legislate a right for employees to work from home two days a week if they reasonably can with the provision to be enshrined in the Equal Opportunity Act.
For Ms Michaelides, who owns and runs Pro Repair Auto Care Centre in Melbourne's inner suburbs, the proposed laws are a cause for concern.
"It's going to create a two-tier situation where, the admin staff have the ability and the right to work from home. But the blue collar workers will have to come in," she told AAP.Â
"That will create a divide and would add another layer to our business, making it harder to get things done."
The business owner also raised concerns about the red tape involved, including the added responsibility of ensuring employees have a safe workspace while working from home.
"We are a safe business, we have occupational health and safety standards to ensure we have the signage and equipment to ensure things don't happen. But how can I ensure that happens at home? I can't control that," Ms Michaelides said.
"Yet we're going to be liable for that."
The policy only applies to workers who can "reasonably" do their job from home, although the extent of who falls into that category is not yet clear.
"You cannot be the checkout person in a small shop and expect to work from home, but if you're a back-office person do you need to be at work every day?," Swinburne human resource management expert Peter Holland told AAP.
"The mandate would be for those companies that are a bit recalcitrant - my way or the highway."
Professor Holland said small businesses could benefit from providing flexibility to workers in a tight labour market and compared the reforms to Australia introducing paid maternity leave in 1973 and superannuation in 1992.
The premier on Tuesday said the proposed laws would apply to workplaces of all sizes.
She had said an exemption would be considered for small businesses when launching a consultation period in August.
The legislation will be introduced to the Victorian parliament in July.
"Work from home works for families, because it saves time and money and it gets more parents working," she said.
Opposition Leader Jess Wilson said she supports working from home but has demanded more detail from the government.
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