Michigan Enacts Changes to Minimum Wage & Paid Sick Time

The Michigan Legislature has passed bills altering increases to minimum wage and paid sick time ordered by the Michigan Supreme Court last year. The bills were signed by Gov. Gretchen Whitmer on Feb. 21, 2025, the same date the court-ordered changes were to take effect. The amendments took effect immediately.

Minimum Wage
The new legislation alters the state’s minimum wage policy that was to take effect on Feb. 21, 2025. Following the court’s 2024 order, the state’s minimum wage rate was set to increase to $12.48 an hour on Feb. 21, 2025, and gradually increase to $14.97 an hour by 2028. 

The new legislation still raises the state’s standard minimum wage rate to $12.48 an hour on Feb. 21, 2025, but the following increases are to $13.73 an hour on Jan. 1, 2026, and $15 an hour on Jan. 1, 2027. The state treasurer then annually calculates a minimum wage rate based on inflation for subsequent years. Note that there are also changes to the state’s tipped minimum wage under the legislation.

Earned Sick Time
One of the biggest changes brought about by the new amendments to the ESTA is that the effective date of the paid sick leave requirement is delayed until Oct. 1, 2025, for businesses with 10 or fewer employees. The amendments also allow these small employers to limit earned sick time to just 40 hours of paid sick leave per year, whereas the original ESTA required them to provide an additional 32 hours of unpaid leave annually. The amendments do not change the 72-hour annual paid sick leave mandate for businesses with more than 10 employees. 

Other key revisions:

• Employers may frontload the total amount of required paid sick leave at the beginning of the year as an alternative to the regular accrual schedule of one hour of paid sick leave per 30 hours worked.
• Employers may impose a 120-day waiting period (up from 90 days) for paid sick leave use for new hires.

Under the amendments, employers must provide written notice of employees’ ESTA rights at hire or 30 days after the effective date of the amendments.