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Important ESTA Updates

Your hardworking team at SBAM, bolstered by your faithful answers to our calls to action have resulted in desperately needed changes to the Earned Sick Time Act and the passage of legislation preserving the tipped wage system for bars and restaurants.

New Details

Small Business Owner Guide to New Minimum Wage and Paid Sick Leave Requirements

As of February 21, 2025 ALL businesses operating in the State of Michigan will be subject to new minimum wage and paid sick leave requirements. Businesses with 1-10 employees must comply with the Earned Sick Time Act by October 1, 2025; businesses with 11+ employees must comply as of February 21, 2025.

ALL businesses are required to nofify employees of ESTA entitlements by March 23, 2025.

SBAM has curated the Earned Sick Time Act Toolkit, a comprehensive set of customizable policies, worksheets, and more.

 

 

 

ESTA Compliance Hub

New Rules for Michigan Small Businesses

As of February 21, 2025, small businesses operating in the State of Michigan are be subject to new rules on minimum wage, paid sick leave, and tipped wage.

the words minimum wage on a green background

Minimum Wage Increase

New minimum wage schedule

Minimum Wage Tip Wage % Tip Wage
February 21, 2025 $12.48 38% $4.74
January 1, 2026 $13.73 40% $5.49
January 1, 2027 $15.00 42% $6.30
January 1, 2028 $15.00 + CPI 44%
January 1, 2029 CPI 46%
January 1, 2030 CPI 48%
January 1, 2031 CPI 50%

New Accrual Based Sick Leave Requirements

This decision from the Court requires all employers, including those with fewer than 50 employees, to offer 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. 

UPDATE: The Governor has signed HB 4002 on February 21, 2025, impacting the Earned Sick Time Act implementation. 

SBAM's ESTA Toolkit

Additional Resources

On-Demand Webinars & Briefings

ESTA FAQs

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. Available only to SBAM’s Basic, Premium, VIP and Elite members.

Learn More

ESTA Compliance Webinar

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. Available only to SBAM’s Basic, Premium, VIP and Elite members.

On-Demand Compliance Webinar

Why Is it Changing?

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.