Changes have been made to Michigan’s minimum wage, tipped wage, and sick time laws.
Two bills to amend Michigan’s minimum wage, tipped wage, and sick time laws were signed into law by Michigan Gov. Gretchen Whitmer on Friday, Feb. 21, 2025. The bills go into effect immediately and are retroactive.
Michigan lawmakers passed the pair of bills on Thursday and Friday. They change the minimum wage increase schedule, cap the subminimum wage phase-out at 50%, and make changes to the state’s sick leave law.
Here’s what you need to know:
How did we get here?
In 2018, Mothering Justice, Michigan One Fair Wage, Michigan Time to Care sponsored proposals known as the Improved Workforce Opportunity Wage Act (the Wage Act) and the Earned Sick Time Act. They collected enough signatures from Michigan voters to send the proposals to the ballot in the fall of that year.
Instead of allowing these proposals to go to the ballot, Michigan’s Republican-led Legislature preemptively passed the proposals. After the election, in the same Legislative session, they voted to substantially scale back the laws and make changes that were requested by a business lobby that criticized the new requirements.
“In an effort to prevent this ballot proposal from reaching the November 2018 general election ballot, the Michigan Restaurant and Lodging Association worked tirelessly with the Michigan legislature to have them adopt the MI One Fair Wage Ballot Proposal and prevent it from going to the ballot,” the Michigan Restaurant and Lodging Association states on its website. “As demonstrated in other states, if the MI One Fair Wage ballot proposal had gone to the November 2018 General Election Ballot, it would have passed with overwhelming support.”
In July 2024, the Michigan Supreme Court ruled that it was unconstitutional for the Legislature to adopt-and-amend citizen-initiated petitions. This means the minimum wage and sick time laws, as originally adopted, will be reinstated.
The Supreme Court decision made it so Michigan’s reinstated Wage Act and the Earned Sick Time Act were supposed to go into effect on Friday, Feb. 21, 2025. Lawmakers on both sides of the aisle ensured that didn’t happen.
---> Polling shows where Michigan voters stand on minimum wage ruling, tipping habits
Michigan’s minimum wage changes
The plan under the citizen-led petition, would have phased in an increased minimum wage over four years. In late 2022, the state treasurer would have begun adjusting the minimum wage every year to keep up with the inflation rate. The petition also phased out the tip credit and tipped employees would have been earning the full minimum wage rate by 2024.
When the Republican-led Legislature amended the Wage Act during the lame duck session, it made it so the minimum wage for tipped employees remained at 38%. The annual increases to the minimum wage were replaced by a 23-cent per year increase and the minimum wage in Michigan would not have exceeded $12 until 2030.
When the Michigan Supreme Court reinstated the acts, it was decided that they would go into effect under a “revised schedule that links the gradual phase-in of minimum-wage increases to the same annual schedule as originally proposed, but set into the future, and accounting for inflation.” That plan had the minimum wage increasing with an inflation adjustment on February 21, 2025, and would have phased out the tip credit over four years.
The House and the Senate passed Senate Bill 8, which was presented to Michigan Gov. Gretchen Whitmer at 1:30 a.m. on Feb. 21, 2025. Under Senate Bill 8, the minimum wage will reach $15 on Jan. 1, 2027, and every year after that it will be adjusted by the rate of the inflation. The minimum wage rate will not increase if the unemployment rate in Michigan is 8.5% or greater in the year before the rate increase is scheduled.
Under Senate Bill 8, the subminimum wage remains at 38% in 2025. The subminimum wage will not be phased out completely, instead, it will reach 50% of the minimum hourly wage in 2031.
Here’s a chart showing the differences:
Group working to block changes
On Thursday, Feb. 20, 2025, One Fair Wage announced plans for a statewide referendum in response to Senate Bill 8.
According to a press release, if the group gathers the number of signatures from registered voters within the legal timeframe, Senate Bill 8 would be suspended and placed on the ballot for a statewide vote. This would prevent it from taking effect unless voters approved it.
“The Michigan Supreme Court ruled that these wage increases should be implemented, yet lawmakers are attempting to roll them back before they even take effect,” said Saru Jayaraman, President of One Fair Wage. “We’re mobilizing to ensure voters—not politicians—have the ultimate say in whether these protections are upheld.”
Other states without subminimum wage
There are already seven states that require employers to pay tipped employees the full state minimum wage before they receive tips. Those states are Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington.
One Fair Wage states that, “these seven states have higher restaurant job growth rates, small business growth rates, and tipping averages than Michigan; they also have one half the rate of sexual harassment in the restaurant industry and lost fewer restaurants during the pandemic than Michigan.”
What to know about Michigan’s Earned Sick Time Act
When the Legislature amended the Earned Sick Time Act in the lame duck session, they made it so it only applied to employers who employ more than 50 people. It also only required an employer to give employees who work full-time sick leave.
The Earned Sick Time Act as originally submitted, applies to all employers in Michigan with one or more employees. It includes salaried, full, and part-time hourly workers.
It requires employers to grant employees one hour of paid sick time for every 30 hours worked each week. Employees could use those hours for any reason related to physical or mental health (either their own or that of a family member).
If an employee or anyone in their family was a victim of domestic violence or sexual assault, the accrued sick time could be used to address issues such as attending counseling appointments, court proceedings, or school visits.
The Earned Sick Time Act prohibited employers from interfering with an employee’s attempt to use accrued sick time, though it did allow them to require documentation when absences went over three days.
House Bill 4002 seeks to amend the act again. It was presented to Michigan Gov. Gretchen Whitmer at 8:42 p.m. on Feb. 20, 2025.
Here’s what’s in the bill:
Employees earn one hour of paid earned sick time for every 30 hours worked, and employers are not required to allow an employee to use more than 72 hours of paid earned sick time in a single year.
An employer is required to allow an employee to carry over unused accrued paid earned sick time (not to exceed 72 hours unless increased by the employer) from one year to the next. However, if the employer provides the paid earned sick time at the beginning of the year they do not need to allow the employee to carry over unused earned sick time to the next year.
If the sick time is provided at the beginning of the year, the employer also does not need to calculate and track the accrual of paid earned sick time, or pay the employee the value of the employee’s unused accrued paid earned sick time at the end of the year.
Employees who can schedule their own working hours are not guaranteed paid sick leave.
An employer may require advance notice not to exceed seven days if the need to use sick time is foreseeable. If it’s not foreseeable, but an employee uses sick time for more than three consecutive days, then the employer may require documentation. Documentation can include something signed by a healthcare professional, a police report, court documents, or a signed statement from a victim and witness advocate, among other things.
An employer cannot require that the documentation explain the nature of the illness or details of violence. An employer is responsible for paying all out-of-pocket costs the employee incurred while obtaining the documentation. If the employee does not have health insurance, the employer must pay any costs charged to the employee by the health care provider for providing the specific documentation.
There are some differences for small businesses. A small business is defined as an employer for which 10 or fewer individuals work for compensation during a given week. Small businesses are required to allow employees to use 40 hours of paid earned sick time in a year. Small businesses do not need to start allowing employees to accrue paid earned sick time, providing paid earned sick time, or calculating and tracking paid earned sick time until Oct. 1, 2025.
