Due to a recent Supreme Court decision, significant changes to minimum wage and paid sick leave requirements will take effect in Michigan on February 21, 2025.

 

Here are the key details:

 

Minimum Wage Increase

The minimum wage hourly wage in Michigan will increase noticeably:

 

• • The new minimum wage in February 2025 could be about $12.58 an hour, due to the inflation adjustment. The amount must be determined in November.

• • The rate will be adjusted annually for inflation going forward.

 

Changes to Tipped Wages

The tip credit system for tipped workers will also see major changes:

 

• • Starting February 21, 2025, the tip credit will increase to 48% of the minimum wage.

• • The tip credit will increase incrementally over the following years.

• • On February 21, 2029, tipped workers will earn the full minimum wage, effectively eliminating the separate tipped minimum wage.

 

Expanded Paid Sick Leave

The Earned Sick Time Act (“ESTA”) will introduce more generous sick leave requirements:

 

• • Employees must earn 1 hour for every 30 hours worked (this does not have to include vacation, holidays, etc.).

• • Businesses with 10 or more employees must provide at least 72 hours of paid sick leave annually.

• • Businesses with fewer than 10 employees must provide 40 hours of paid sick leave, plus an additional 32 hours of unpaid sick leave.

• • The law applies to all employees, including part-time and seasonal.

• • Employees can use sick time for their own health needs, to care for family members, or for issues related to domestic assault.

• • Accumulated unused time does not have to be paid out at termination but that must be explicitly stated in the employer’s policy.

• • Employers must retain records for three years.

 

Key Changes from Previous Law

 

• • The current sick leave law only applies to employers with 50 or more employees and caps leave at 40 hours.

• • The new law will cover nearly all Michigan employees, regardless of size.

 

Employers have until February 21, 2025, to prepare for these changes by reviewing and updating their wage and leave policies to ensure compliance with the new requirements.