Beginning February 21, 2025 all small businesses operating in the State of Michigan will be subject to new minimum wage and paid sick leave requirements. These rules are the result of a decision by the Michigan Supreme Court on July 31, 2024.
SBAM has curated the Earned Sick Time Act Toolkit, a comprehensive set of customizable policies, worksheets, and more.
Beginning February 21, 2025, all small businesses operating in the State of Michigan will be subject to new rules on minimum wage, paid sick leave, and tipped wage.
Michigan’s current minimum wage is $10.56/hour. The decision sets a new schedule for increases over the next three years until the minimum wage reaches $14.97 in 2028. After 2028, the wage will increase yearly at a rate tied to CPI.
| Minimum Wage | Tip Wage % | Tip Wage | |
| February 21, 2025 | $12.48 | 48% | $5.99 |
| January 1, 2026 | $13.29 | 60% | $7.97 |
| January 1, 2027 | $14.16 | 70% | $9.91 |
| January 1, 2028 | $14.97 | 80% | $11.98 |
Michigan law allows employers to pay tipped employees 38% of the minimum wage as long as they earn at least the standard minimum wage with tips included. Most end up earning far more than minimum wage, which is why recent surveys show that 83% of servers do not want the system to change.
Under this decision, the tipped wage will be phased out and service workers will fall under the regular minimum wage system.
This decision from the Court requires all employers, including those with fewer than 50 employees, to offer accrual-based paid sick leave to all employees, including part-time. It will require nearly every employer to make changes to the way they accrue sick time. View this grid to read the specific requirements.
UPDATE: The Department of Labor and Economic Opportunity released updated FAQs in November on the Earned Sick Time Act.
As the 2025 legislative year begins, both the House and the Senate have acknowledged the need for urgent changes to the Earned Sick Time Act and the Tip Credit. Both chambers have introduced different bills to address the glaring problems small businesses face.
Please note – this will take you to a separate page where your member login will be required to view the webinar. It’s at the bottom of the web page.
On August 1, 2024 SBAM President & CEO Brian Calley hosted a special member briefing.
Allyson Terpsma, Partner with Warner Norcross + Judd, presented this webinar on August 8th.
SBAM’s Brian Calley and Kelli Saunders walk through these FAQs to help small business owners understand the ESTA and how to be compliant.
Please note that this presentation will not reflect the updated FAQs from LEO listed here.
Prior to the 2018 election, advocates introduced voter initiatives mandating employer-provided paid sick time and a $12 per hour minimum wage. These proposals gathered requisite signatures to appear on the 2018 ballot. However, Michigan’s Constitution mandates that initiatives amending statute first appear before the legislature prior to appearing on the ballot. The legislature adopted the proposals and later amended them to lessen the impact. This action, now called “adopt and amend,” prevented the original proposals from appearing on the ballot. Those who gathered initial signatures filed a lawsuit and raised the legal question of whether a legislature can amend a voter-initiated statute that it adopted within the same two-year legislative term in which it was adopted.
The trial court found in favor of the plaintiffs, saying the ‘adopt and amend’ practice was unconstitutional. The court of appeals disagreed and upheld the practice. The final decision rests in the hands of the Michigan Supreme Court, who announced Wednesday, July 31, 2024, that the legislature’s actions were unconstitutional, meaning that the initially adopted ballot language is now law.