Beginning February 21, 2025, significant changes to Michigan’s paid sick leave and minimum wage laws will take effect. Below are key details.

PAID SICK LEAVE
The Earned Sick Time Act requires employers of all sizes to provide paid earned sick time (EST) to all Michigan employees, up to 72 hours per year. There is no exemption for small employers; however, those with nine or fewer employees only have to pay for the first 40 hours of EST used—any remaining hours can be unpaid.

The Michigan Department of Labor and Economic Opportunity (LEO) has not yet indicated how employees’ current sick leave banks (for those who have them) should be treated in the transition.

Accrual and Carryover
Employees will accrue EST at a rate of one hour for every 30 hours worked beginning February 21, 2025, or on their hire date—whichever is later. Employers can calculate exempt employees’ accrual based on a 40-hour workweek (even if they generally work more than that) or their usual number of hours worked if they regularly work less than 40 hours.

According to FAQs from LEO, employers are permitted to frontload all 72 hours (or more) at the beginning of the benefit year. Prorating is not addressed.

Carryover of unused, accrued EST must be allowed from year to year, even if frontloaded.

Use
Employees can use EST as it is accrued, except that employers can require new hires to wait until their 90th calendar day to start using EST. Employees can use EST for the following reasons:

Their own or their family member’s mental or physical illness, injury, or health condition, including medical diagnosis, care, treatment, or preventive medical care
Certain reasons related to domestic violence or sexual assault
Meetings at their child’s school or place of care related to the child’s health, disability, or the effects of domestic violence or sexual assault on the child
The closure of their workplace or their child’s school or place of care by a public health official because of a public health emergency
Certain reasons related to limiting the spread of a communicable disease
Employers can cap annual use of EST at 72 hours.

Documentation
When employees use EST for more than three consecutive days, employers can request reasonable documentation. However, the employer will be responsible for the employee’s out-of-pocket costs associated with getting the required documentation.

Notice
Employers need to give written notice to employees about their EST rights by February 21, 2025, or upon hire—whichever is later. They are also required to display a poster with the same information in a conspicuous and accessible location in the workplace. Both the notice and posting must be provided in English, Spanish, and any primary language spoken by at least 10% of employees, if the state provides a translation in that language. The state has created a model notice that can be found here.

More Information
LEO has created an EST website with FAQs, informational slides, postings, and more.

Note that legislation is currently pending that could make additional changes to these laws, if passed. These changes could take effect before February 21, though that appears unlikely. We’ll be monitoring the situation closely and will provide updates as needed.

MINIMUM WAGE AND TIP CREDIT
The minimum wage will increase on a revised annual schedule as follows:

February 21, 2025: $12.48 per hour and tipped employee base wage of $5.99
February 21, 2026: $13.29 per hour and tipped employee base wage of $7.97
February 21, 2027: $14.16 per hour and tipped employee base wage of $9.91
February 21, 2028: $14.97 per hour and tipped employee base wage of $11.98
After that, the minimum wage will be adjusted annually each February 21, based on inflation. The minimum base wage for tipped employees will be 90% of the minimum hourly wage in 2029 and 100% of the minimum wage in 2030—thereby eliminating the tip credit.

ACTION ITEMS

Update your sick leave policy to reflect the new requirements.
Add the EST notice to your new hire packets.
Post the EST notice in a conspicuous and accessible location in the workplace.
Prepare to pay employees at least the new minimum wage.