News/Event

Supreme Court Decision Affecting Min Wage and Paid Sick Leave

Re: Big Changes to Minimum Wage and Paid Sick Leave

Today, the Michigan Supreme Court issued a decision which reinstated the original Improved Workforce Opportunity Wage Act and the Earned Sick Time Act as it was originally adopted in 2018 from approved ballot measures. Now, the original statutes will go into effect February 21, 2025. This will bring some big changes to employers of all sizes in Michigan.

You may recall that after these laws were amended by the Michigan legislature shortly after they were enacted. The laws were changed to reduce the timetable in which minimum wage increases would occur and the sick leave law was made applicable only to larger employers and less accrued leave each year. Those changes have been the subject of judicial challenge and today, the Michigan Supreme Court finally rendered its’ opinion and now, by February 21, 2025, the following changes will occur:

Minimum Wage

The original law had a $12 minimum wage starting January 1, 2022. Under the amended Act, the minimum wage starting January 1, 2022, was $10.10. Now the minimum wage will increase on February 21, 2025, to $12.00.

The tipped wage will also increase from $3.75 to $9.60 an hour starting February 21, 2025.

Earned Sick Time Act

When originally enacted, the Michigan Paid Medical Leave Act was called the “Earned Sick Time Act.” As of February 21, 2025, the original Earned Sick Time Act will go into effect.

Under the original Earned Sick Time Act, all Michigan employees were eligible for paid sick leave, not just employees of employers with 50 or more employees. Additionally, previously exempted part time, and administrative, professional, executive, and outside sales employees are also eligible for paid leave under the Earned Sick Time Act. Employees will earn 1 hour of sick leave for every 30 hours worked (as opposed to the 1:35 ratio that was subsequently enacted).

Employers with less than 10 employees can cap paid time off at 40 hours annually. Employers with fewer than 10 employees must allow employees to use and accrue 72 hours of sick leave per year, but only 40 hours must be paid. Employees can carry over from year to year any number of accrued hours, however, they may only use up to 72 hours per year.

All other employers must provide eligible employees with up to 72 hours of paid time off annually.

Unused earned sick time must roll over to the next year (there is no front loading and avoiding rollover that was subsequently enacted)

These are significant changes for employers under 50 employees and even employers already covered under the revised Paid Medical Leave Act will need to revise their policies to be in accordance with these changes by February 21, 2025.

We are happy to answer any questions.

Michelle D. Bayer