Michigan Supreme Court Adopt & Amend Decision
PAID SICK LEAVE AND NEW MINIMUM WAGE TO GO INTO EFFECT FEBRUARY 21, 2025
Disclaimer: None of the information on this page is to be taken as legal advice. It is strongly encouraged that you consult a labor attorney for questions and implementation. The Charlevoix Area Chamber of Commerce and its staff are not legal experts nor licensed legal professionals.
Since the Supreme Court's decision in July putting these laws into effect, business groups worked diligently through legislative solutions and compliance assistance. Advocacy efforts through multiple coalitions were successful to help soften some of the impact of the original laws to businesses.
SUMMARY OF THE DECISION
On July 31st, the Michigan Supreme Court ruled that two ballot proposals from 2018 will take effect February 21, 2025. One proposal raises the minimum wage including that of tipped employees, and the other proposal enacts paid leave benefits for full-time, part-time, and seasonal employees of any business with one or more employee. The Court's ruling means that the two ballot proposals will become law.
The case challenged the Michigan Legislature's handling of these two ballot proposals back in 2018. At the time, after the proposals received the proper number of signatures to go on the state-wide ballot, the Legislature chose to adopt the proposals rather than send them to the ballot. After adopting the proposals, the Legislature made a number of amendments. The process Legislature took back then is now referred to as 'Adopt-and-Amend', and has been found to be unconstitutional by the Michigan Supreme Court.
SUMMARY OF CHANGES GOING INTO EFFECT FEBRUARY 21, 2025
*Not to be taken as legal advice for definitive implementation; summary provided by the Charlevoix Chamber of Commerce staff from the available resources linked on this page
The Paid Medical Leave Act (PMLA) will be replaced with the Earned Sick Time Act (ESTA):
- Applies to all employers in Michigan with 1 or more employee
- Small businesses (10 or fewer employees) have until October 1, 2025 to begin accrual of earned sick time for employees
- Includes both full and part-time salary and hourly workers; includes seasonal IF laid off and rehired within a 2 month period
- Employees accrue sick time at a rate of 1 hour for every 30 hours worked
- Unused sick time must be allowed to carry over
- Businesses with more than 10 employees must allow at least 72 hours of paid sick time per year to be used to the extent it is accrued; businesses with fewer than 10 employees must allow at least 40 hours of paid sick time to be used to the extent it is accrued (additional time can still be accrued and carried over, according to hours worked by employee)
- As an alternative to accrual, an employer can front-load sick time (72 hours for larger businesses, 40 hours for small businesses 10 or fewer employees)
- If the need for using earned sick time is foreseeable, an employer may require notice not to exceed 7 days prior to the date leave is to begin; if the need for using earned sick time is not foreseeable, an employer may require notice as soon as practicable
- Employer may require reasonable documentation for earned sick time of more than 3 consecutive days (employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation; an employer cannot delay commencement of leave based on failure to received documentation)
State minimum wage will increase according to the following schedule*:
- 2025 - $12.48
- 2026 - $13.73
- 2027 - $15.00
The tipped-wage credit will increase according to the following schedule*:
- 2025 - $4.74
- 2026 - $5.49
- 2027 - $6.30
Follow the links on the side of this page for more details and compliance information.