New Minimum Wage and Paid Sick Leave Requirements

The Michigan Supreme Court ruled on the case that challenged the handling of two 2018 ballot proposals – one raising the minimum wage, including that of tipped employees, and the other enacting paid leave benefits for full-time, part-time and seasonal employees. 

The Justices found the actions of the Michigan lawmakers unconstitutional. This decision cannot be appealed.

Beginning February 21, 2025:

• Under the Improved Workforce Opportunity Wage Act (IWOWA), Michigan’s $10.33 minimum wage will likely climb above $12 next year and continue to rise through 2028, depending on the state’s inflation calculations. The lower minimum wage for tipped workers – now $3.93 – will be completely phased out over the next four years.
• Under the Earned Sick Time Act (ESTA), all Michigan employers, regardless of the number of employees, must provide all their employees with paid medical leave.

Small employers who are currently exempt from providing paid medical leave should think about how the new law will impact their payroll costs and plan to include new policies in employee handbooks. All employers should review their current paid time off policies and wage schedules well before the effective date.

Watch for more guidance from Yeo & Yeo regarding implementing the paid medical leave benefits.