Eleventh-Hour Updates to Michigan’s Minimum Wage and Paid Sick Leave Laws

On Feb. 21, 2025, Michigan enacted two pieces of legislation, Senate Bill 8 and House Bill 4002, making last minute changes to the state’s new minimum wage and paid sick leave laws set to take effect that same day. The bills passed with bipartisan support from the state legislature and were signed by Michigan’s Governor Whitmer who in a release stated, “I’m proud to sign these two bipartisan bills into law that will raise wages, ensure workers can take time off to care for themselves or their loved ones, and continue growing our economy.”  

Michigan’s minimum wage and paid sick leave laws have been quite the saga over the last several years, since 2018 to be specific. As GovDocs Employment Law News covered several of the milestones in previous articles – including the original legal challenges to the Improved Workforce Opportunity Wage Act and Paid Family Leave Act in Mothering Justice v. Nessel, the Michigan Supreme Court Order reinstating the original ballot measures, and a status update to the state legislature working under the wire towards amendments to the laws – this blog will focus on the changes resulting from the passage of Senate Bill 8 and House Bill 4002.  

Senate Bill 8 – Minimum Wage

Senate Bill 8 updates the state minimum hourly wage schedule so that the state reaches the benchmark $15 much faster, but it reverses course on tip credit elimination.  

According to the previous Supreme Court Order (the Order), the minimum wage was originally supposed to increase each year until it hit $14.97 on Feb. 21, 2028. Then annually thereafter, the minimum wage would be adjusted based on calculating the 12-month percentage increase in the Consumer Price Index for urban wage earners and clerical workers (CPI-W). 

Now, Senate Bill 8 updates the minimum wage schedule as follows:  

Effective Date	Minimum Wage
Feb. 21, 2025	$12.48
Jan. 1, 2026	$13.73
Jan. 1, 2027	$15.00
Jan. 1, 2028, and annually thereafter	Increase by CPI-U

 

Of note, the minimum wage increase on Feb. 21, 2025, remains unchanged at $12.48. While the new minimum wage schedule keeps the Feb. 21st date for the initial increase, future increases are moved back to Jan. 1. The schedule also hits $15.00 a full year earlier in 2027. And finally, the economic indicator was changed to the Consumer Price Index for all urban consumers (CPI-U).  

Senate Bill 8 also revises the tipped employee wage schedule so that it no longer gradually eliminates the tipped credit over the next several years. Instead, the tipped employee wage gradually increases each year by a percentage of the minimum wage until it is 50% of the minimum hourly wage rate in 2031.   

The new tipped employee wage schedule for the next three years is as follows: 

Effective Date	Tipped Employee Wage
Feb. 21, 2025	$4.74 (38% of MW)
Jan. 1, 2026	$5.49 (40% of MW)
Jan. 1, 2027	$6.30 (42% of MW)
Jan. 1, 2028, and annually thereafter	TBD

 

In addition to the minimum wage and tipped employee wage schedule, the state legislature also added a civil fine of up to $2,500 if an employer fails to pay an employee properly as described under the law.  

House Bill 4002 – Paid Sick Leave

House Bill 4002 adds and amends several of the paid sick leave provisions in the Earned Sick Time Act (the Act) that took effect on Feb. 21, 2025.  

Frontloading: Notably, House Bill 4002 adds frontloading as an alternative to the accrual and carryover requirements if small employers provide 40 hours of paid sick leave and large employers provide 72 hours of paid sick leave for their employees at the beginning of the year.  

Waiting Period Before Use: The Act was also updated so that the timeframe from when a new employee is eligible to use accrued sick time is now set at 120 calendar days, instead of 90 days.  

Reinstatement of Sick Leave Balance Upon Rehire: House Bill 4002 also adds a change to an employer’s reinstatement obligations if an employee is rehired within a specific timeframe. The new law requires a shorter time period within which paid leave balances must be reinstated. Balances only need to be reinstated if the employee is rehired within two months of separation of employment. 

Notice to Employer of Use: Notice requirements of unforeseeable leave were also expanded. Employers may now require an employee to give notice as soon as feasible or in line with the employer’s policy, if the following are met: 

1. Employer provides employee with written copy of policy with procedures for how to provide notice on date of employee’s hire, effective date of act, or effective date of employer policy 
2. Employer allows employee to provide notice after employee is aware of need for earned sick time 

Small Employers: Next, the small business definition was slightly altered to include employers with 10 or fewer workers instead of fewer than 10. House Bill 4002 also recognized a new compliance date as October 1, 2025, giving smaller employers additional time to prepare for certain changes.  

Definitions: House Bill 4002 amended several definitions. Specifically, the definition of employee updated its language surrounding exclusion as follows: 

“(i) An individual employed by the United States government. 

(ii) An individual who works in accordance with a policy of an employer if both of the following conditions are met: 

(A) The policy allows the individual to schedule the individual’s own working hours. 

(B) The policy prohibits the employer from taking adverse personnel action against the individual if the individual does not schedule a minimum number of working hours. 

(iii) An unpaid trainee or unpaid intern. 

(iv) An individual who is employed in accordance with the youth employment standards act, 1978 PA 90, MCL 409.101 to 409.124.” 

A part of the covered family member definition was changed to “an individual related by blood to the employee,” thus removing “or affinity.” Note, the law will still cover “an individual whose close association with the employee is the equivalent of a family relationship.” The state legislature also added a new definition for an unpaid trainee or unpaid intern.  

Other Changes: Finally, language was added surrounding collective bargaining agreements and multiemployer plans as well as overtime exemptions and civil remedies for employers’ failure to provide appropriate paid sick leave to employees at no more than 8 times the employee’s normal hourly wage.  

Michigan Minimum Wage and Earned Sick Time Poster Updates

Updated versions of Michigan’s Minimum Wage and Earned Sick Time Act posters, which are both required to be posted by all employers, have been released by the Michigan Department of Labor and Economic Opportunity in English, with the Spanish and Arabic versions “coming soon” as noted by the agency website. Updated Michigan posters will be sent to impacted customers that are part of the GovDocs Standard Update Program.