Be prepared for minimum wage adjustments and sick time requirements that go into effect next year.

Two acts—The Wage Act and the Sick Time Act—mean significant changes for Michigan employers. Here’s an overview of what you need to know before both acts go into effect in 2025.

The new minimum wage rate schedule under the Wage Act

Michigan’s current minimum wage is $10.33/hour. In accordance with the Wage Act passed by voters in 2018, minimum wages are going up. How much depends on an employee’s classification and age.

Minimum wage for both non-tipped and tipped employes will increase incrementally each year. However, the minimum wage for tipped workers is less than standard minimum wage until February 21, 2030, when the two rates will be equal. In adopting equal minimum wage for tipped and non-tipped workers, Michigan joins seven other states: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.

The minimum wage for those under age 18 is 85% of the minimum wage for non-tipped workers. These wages will also go up incrementally each year.

Here’s the breakdown for 2025-2028:

Effective Date	Minimum Hourly Wage Rate	Minimum Tipped Hourly Rate	85% Rate for Those Under Age 18
Jan 1, 2025	$10.56	$4.01	$8.98
Feb. 21, 2025	$12.48	$5.99	$10.61
Feb. 21, 2026	$13.29	$7.97	$11.30
Feb. 21, 2027	$14.16	$9.91	$12.04
Feb. 21, 2028	$14.97	$11.98	$12.72

Note: there are two increases in 2025; the first on January 1 and the second on February 21.

While legislation to “adopt and amend” the Wage Act was introduced in 2018 and 2019, the Michigan Supreme Court ruled those initiatives unconstitutional on July 31, 2024. The minimum wage increases will go into effect next year.

What happens after 2028?

Every October beginning in 2028, the state treasurer will calculate an adjusted minimum wage rate, increasing the minimum wage by the rate of inflation. New rates will be published by November 1 of the year the calculation is made and go into effect February 21 of the succeeding year.

Prepare your budget for the minimum wage increase

Check out our blog, Getting Ready For The Minimum Wage Increase, to see how businesses in states that have already implemented wage adjustments prepared for the change.

What is the Earned Sick Time Act?

In 2025, under the Earned Sick Time Act all employees—including part-time and seasonal workers—will begin to accrue paid medical leave. All employers are covered by the act.

Businesses with 10+ employees must allow at least 72 hours of paid sick leave each year to the extent the leave is accrued. Businesses with fewer than 10 employees must allow at least 40 hours of paid sick time annually, plus an additional 32 hour of unpaid sick time to the extent leave is accrued.

“An employer meets the 10 employee threshold if it employs 10 or more employees in 20 or more workweeks in the current or previous calendar year,” says Michigan Department of Labor & Economic Opportunity (LEO). “The 20 work weeks need not be consecutive. This includes full-time, part-time and temporary employees including those provided through a temporary service or staffing agency or similar entity.”

Accrual begins February 21, 2025, or upon the date the employee’s employment begins, whichever is later. Employees accrue sick time at a rate of one hour for every 30 hours worked.

An employer may require an employee to wait until the 90^th calendar day after starting employment to begin using accrued earned sick time. Also, unused sick time can be carried over, but employers may limit annual use to no more than 72 hours.

How can employees use accrued leave

Employees may use their accrued leave to care for their own physical or mental health or that of a family member. If the employee or anyone in their family was a victim of domestic or sexual assault, the sick time could be used for things like court proceedings, counseling and visits.

Employers may require documentation from a health care professional for medical absences of more than three days.

Can employers require advance notice and documentation for use of earned sick time?

“If the need for earned sick time is foreseeable, an employer may require advance notice not to exceed seven days prior to the date the earned sick time is to begin, of the intention to use the earned sick time,” said Sean Egan, LEO Deputy Director of Labor. “If the need for earned sick time is not foreseeable, an employer may require the employee to give notice of the intention as soon as practicable.”

An employer may require reasonable documentation for earned sick time of more than three days. The documentation should not include a description of the illness or details of violence. If an employer requires documentation, it is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation. Further, employers can not retaliate against an employee who uses accrued leave.

How employers need to prepare for the Earned Sick Time Act

Before the Earned Sick Time Act goes into effect in 2025, employers need to do two key things.

First, employers must become familiar with the rules and how they will be applied based on the size of the business.

The second key action is to prepare a way to track and administer employee benefits. Many payroll services and benefits administrator can help with these tasks.

 

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