On February 21, 2025, Michigan amended two labor laws, Senate Bill 8 and House Bill 4002, expediting wage increases for workers and expanding paid sick leave rules. New versions of Michigan’s Minimum Wage Law and Earned Sick Time Act labor law posters were released by the Michigan Department of Labor and Economic Opportunity. Here’s what employers need to know:
Minimum Wage Law Update
Michigan’s Improved Workforce Opportunity Wage Act (IWOWA) sets the state’s minimum wage and tip credit for employers with two or more employees. Senate Bill 8 accelerates the state’s minimum wage increases to reach the $15 per hour goal by 2027.
The revised minimum wage schedule is as follows:
| Effective Date | Minimum Wage |
| February 21, 2025 | $12.48 |
| January 1, 2026 | $13.73 |
| January 1, 2027 | $15.00 |
| January 1, 2028, and annually thereafter | Increase determined by inflation |
Senate Bill 8 preserved the tip credit, which was previously set to be phased out. The revised tipped employee minimum wage schedule is as follows:
| Effective Date | Tipped Employee Minimum Wage |
| February 21, 2025 | $4.74 |
| January 1, 2026 | $5.49 |
| January 1, 2027 | $6.30 |
| January 1, 2028, and annually thereafter | Increase determined by inflation |
Along with minimum wage increases, the amendment added a $2,500 fine for employers who fail to ensure tipped workers receive at least the minimum wage.
Paid Sick Leave Law Update
Michigan’s Earned Sick Time Act (ESTA) establishes the state’s paid sick leave laws. House Bill 4002 amends the ESTA with expanded sick leave and introduces key adjustments, including:
- Accrual Rates: Employees earn one hour of earned sick time for every 30 hours worked. Employers with more than 10 employees must offer up to 72 hours per year, whereas employers with 10 or fewer employees must provide up to 40 hours per year.
- Frontloading and Carryover Requirements: Frontloading is permitted 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: Employers may require new hires to wait until their 120th day of employment, previously 90 days, to use accrued paid sick time.
- Rehire Provisions: Employees rehired within two months, previously 6 months, must have their paid leave balances reinstated unless it was paid out upon separation.
- Small Employers Redefined: Small employers are now defined as those with 10 or fewer employers, previously 9 or fewer.
- Effective Dates: The new law took effect on February 21, 2025; however, small employers have an extended compliance date of October 1, 2025.
- Complaint Filing: On the new Earned Sick Time Act posting, the Complaint Filing Section was mostly removed and now only includes, “An employee affected by an alleged violation, at any time within 3 years after the alleged violation or the date when the employee knew of the alleged violation may file a complaint with the Wage & Hour Division.”
What Should Employers Do
Employers must ensure their employees receive at least the revised minimum wage and comply with tip credit changes. Employers should also review and update sick leave policies and procedures to ensure compliance with the new ESTA. Displaying the new labor law posters is not just a requirement but a crucial step in ensuring that your employees are informed of the new laws and that your business is in full compliance.
New Minimum Wage and Earned Sick Time Posters
The Michigan Department of Labor and Economic Opportunity released updated versions of the Minimum Wage and Earned Sick Time Act posters. Both labor law posters must be conspicuously displayed in the workplace in an area where employees can easily view them. In order to maintain compliance, employers must display the new posters and all federal and state-required labor law posters.
Both the Minimum Wage and Earned Sick Time posters are included in our Michigan Labor Law Poster. Our all-in-one poster is guaranteed to comply with current mandatory state and federal labor law postings. Staying compliant is made easy and worry-free with our automatic labor law poster replacement service, which ensures that your business always has the latest posters without you having to keep track of updates.
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