On February 21, 2025, Michigan’s governor signed into law amendments to the Earned Sick Time Act (ESTA) and the Michigan Wage Act (Wage Act) (both previously reinstated by the Michigan Supreme Court). The changes arrived the day the prior versions of both laws were set to take effect. The amended laws require higher minimum wages but retain the tipped-wage credits and provide further clarity and flexibility for the earned sick time requirements.
Background
Michigan adopted the Wage Act and ESTA in 2018, responding to citizen-initiated legislation. The initiative raised the minimum wage to $12.00 per hour, phased out the tip credit, and created new sick time obligations. The legislature then attempted to amend away a few of the defining features of the initiatives. As we previously reported, the Michigan Supreme Court rejected the legislature’s ability to make those amendments and returned the initiatives to their original form, which were set to take effect February 21, 2025.
The Amended ESTA
Regarding coverage, small businesses (those with 10 or fewer employees) are subject to lower requirements (e.g., 40 hours of usage) and will not be subject to the ESTA until October 1, 2025. The amended ESTA excludes unpaid trainees, unpaid interns, youth employees, and employees who schedule their own working hours but are not subject to minimum hour requirements. Employees who are subject to an existing collective bargaining agreement become covered by the ESTA when that agreement...
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