February, 2025 | Fraser Blog

Five Stories That Matter in Michigan This Week – February 28, 2025

Reviewing the Changes on ESTA and Minimum Wage Laws

Last week, Governor Whitmer signed bills HB 4002 and SB 8, which amended the Earned Sick Time Act (ESTA) and the tipped minimum wage law standards that were set to go into effect February 21, 2025. Now, employers will need to adjust their policies to reflect the changes set forth in the bills.

Why it Matters: Employers with 11 employees or more must offer 72 hours of paid sick leave, employers with 10 or fewer employees must offer 40 hours of paid sick leave, and employers are now allowed to frontload sick time. Minimum wage was increased to $12.48 beginning February 21, 2025, $13.71 on January 1, 2026, $15 on January 1, 2027, respectively. Beginning January 1, 2028, and each following year, the minimum wage will increase by the rate of inflation, provided unemployment remains below 8.5%. Read more from your Fraser Trebilcock attorney.

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FinCEN Update: CTA Reporting Requirement Back On

February 18, 2025, the United States District Court in Texas that had ordered the injunction that had paused enforcement of the Corporate Transparency Act’s (“CTA”) Beneficial Owner Information Reporting (“BOIR”) requirements has granted the government’s request for a stay of that injunction pending appeal.

Why it Matters: This means that FinCEN is authorized to enforce the BOIR requirements, yet again. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies. Read more.

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Fraser Trebilcock Welcomes Dakota A. Larson to the Firm

We are pleased to announce the hiring of Dakota A. Larson who will primarily work in the firm’s Lansing office.

Why it Matters: Ms. Larson focuses on insurance defense and business matters. She has experience handling complex liability, coverage, and bad faith claims in multiple lines of insurance and in multiple jurisdictions. Learn more.

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Sixth Circuit Upholds Employment Arbitration Provisions Without Explanation Requirement

The U.S. Court of Appeals for the Sixth Circuit recently ruled in Gavette v. United Wholesale Mortgage, LLC that employment arbitration provisions are binding even when employers don’t explain them to an employee or suggest seeking legal advice before signing.

Why it Matters: This decision reinforces that employees are responsible for documents containing arbitration provisions, regardless of their understanding of the terms, giving Michigan employers greater certainty that their arbitration agreements will be enforced without additional procedural requirements.

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Michigan Cannabis Exceeds $247 Million in January ‘25

Cannabis sales surpassed $247 million in January 2025, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $246,615,619.35, while medical sales came in at $710,061.91, totaling $247,325,681.26.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Business & Tax | Robert D. Burgee
Dakota Larson
Cannabis Law | Sean Gallagher

Governor Whitmer Signs Bills Amending ESTA and Minimum Wage Laws

Minimum Wage & Tip Credit

Summary of Senate Bill No. 8[1]

Under this legislation, Michigan workers, including employees who receive gratuities within the course of their employment (“tipped workers”), will see an immediate increase in the minimum hourly wage $12.48, effective immediately. The minimum wage will then increase to $13.73 on January 1, 2026, and then to $15.00 on January 1, 2027, respectively. Beginning January 1, 2028, and each following year, the minimum wage will increase by the rate of inflation, provided unemployment remains below 8.5%.

For tipped employees, the minimum wage beginning February 21, 2025 is 38% of the minimum wage, and will increase by 2% incrementally each year through 2031.

Earned Sick Time

Summary of House Bill No. 4002[2]

Under this legislation, nearly all Michigan employers will be required to provide paid sick leave to covered employees. Employees of the United States government, set their own schedules, or work without pay[3], are excluded. However, each individual performing work on a full-time, part-time, or a temporary basis and those made available to work through the services of a temporary services or staffing agency is each counted as an employee; there is no accounting or consideration for full-time-equivalence.

Employee sick time accrual began immediately on February 21, 2025, or upon commencement of employee’s employment if occurring after that date. Employers with 10 or fewer employees are considered “small business” and are required to permit employees to accrue and use at least 40 hours of paid sick time. Employers with 11 or more employees are required to permit employees to accrue and use at least 72 hours of paid sick time. Accrual for both employees of both employer types is at the rate of 1 hour for every 30 hours worked; and employees are permitted to roll over accrued but unused time from year to year (note that workers may only use 72 hours of paid sick time each year, regardless of accrual of more time due to roll overs).

As an alternative to accrual and uncapped roll overs, employers can choose to “front load” employee sick time at the beginning of each year, provided the employees are front loaded the total amount of time they would accrue during the year and are permitted to begin using the sick time immediately.

Finally, the legislation expands the purposes for which earned sick time may be accrued or provided to include, diagnosis, care, or treatment of an employee (or their family member’s) mental or physical illness, injury, or health condition, as well as for certain domestic violence related absences, and public health emergencies. Advance notice of taking sick time may be required under employer policies in certain circumstances where the need is foreseeable.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions. When it matters in Michigan, we are the trusted legal advisors for businesses and individuals.

Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.

Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

Jennie Brooks is a law clerk at Fraser Trebilcock, currently 2L at Michigan State University College of Law.

[1] https://www.legislature.mi.gov/Bills/Bill?ObjectName=2025-SB-0008.

[2] https://www.legislature.mi.gov/Bills/Bill?ObjectName=2025-HB-4002.

[3] An individuals is not considered an “employee” under the act if they are engaged in service to an employer as an unpaid trainee or unpaid intern, or is employed in accordance with the youth employment standards act under MCL 409.101 to 409.124 or employed in accordance with an employer policy that both (a) allows the individual to schedule the individual’s own working hours and (b) prohibits the employer from taking adverse personnel action against the individual if the individual does not schedule a minimum number of working hours.

Five Stories That Matter in Michigan This Week – February 21, 2025

Governor Whitmer Signs ESTA Bills Into Law

This morning, Michigan Governor Whitmer signed bills HB 4002 and SB 8, which amended the Earned Sick Time Act (ESTA) and the tipped minimum wage law standards that were set to go into effect February 21, 2025.

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FinCEN Update: CTA Reporting Requirement Back On

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Sixth Circuit Expands FMLA Coverage to Include Care for Adult Siblings

In Chapman v. Brentlinger Enterprises, the Sixth Circuit Court of Appeals ruled that employees may be eligible for FMLA leave to care for a seriously ill adult sibling if they can establish an “in loco parentis” relationship, reversing a lower court decision that had categorically excluded such care from FMLA coverage.

Why it Matters: This decision directly impacts Michigan employers by expanding potential FMLA obligations beyond traditional familial relationships to adult sibling care.

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Michigan CRA Publishes January ’25 Data: Average Price Decreases

Per data released by the Cannabis Regulatory Agency (CRA), the average retail price for adult-use sale of an ounce of cannabis in January 2025 was $66.50, a decrease from $69.20 in December 2024. This is a decrease from January 2024, where the average price was $93.20.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices.

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Business Education Series: Anatomy of a Data Breach

Data breaches can wreak havoc on your company and almost always lead to litigation. With each new breach, we gain valuable insight into what companies could have done better. Your legal, contractual, and business obligations can sometimes be confusing and in conflict with each other.

Why it Matters: During the March Business Education Series facilitated by Nate Steed and Kelly R. Hollingsworth, this session will examine recent cases and best practices to protect your company from a breach including: lessons learned from recent data breaches; proactive strategies to insulate your business. Learn more.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Business & Tax | Robert D. Burgee
Cannabis Law | Sean Gallagher

FinCEN Update: CTA Reporting Requirement Back On

UPDATE: Beneficial Owner Information Reports Due by March 21, 2025 (click here for FinCEN Notice)

This means that FinCEN is authorized to enforce the BOIR requirements, yet again. However, in seeking the stay, government lawyers told the court that:

FinCEN intends to announce that it will extend the compliance deadline for thirty days. During that period, FinCEN intends to assess its potential options to prioritize reporting for those entities that pose the most significant national security risks while providing relief to lower-risk entities.

There is also legislation in Congress that would delay the enforcement of the CTA until January 1, 2026. That legislation unanimously passed the US House Of Representatives and is pending consideration in the US Senate.

Therefore, Reporting Companies, whether in existence prior to January 1, 2025, or created after that date, are advised to monitor this situation, and prepare to file their BOIR within the next thirty days.

Five Stories That Matter in Michigan This Week – February 14, 2025

Large Michigan Cannabis Operator Temporarily Shutters Part of its Operations Due to Market Challenges

Pincanna, which has retail cannabis outlets in East Lansing, Kalamazoo, and Kalkaska, recently announced that it is temporarily closing the greenhouse portion of its cultivation operation (located in Bay County) and laying off part of its workforce.

Why it Matters: One of the company’s co-founders cited an oversupply of cannabis in Michigan, which has created a highly competitive and unsustainable market, as the driving force behind the decision. Despite record sales of product, many Michigan cannabis operators have struggled to remain profitable due to falling prices.

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Governor Whitmer Unveils Proposed Tax Increases to Fund Roads

This week, Governor Whitmer released a proposal that seeks $3 billion in a long-term plan that will lower vehicle repair costs, invest $1 billion in local roads and $250 million in transit.

Why it Matters: Among the components of the proposal, it seeks to close the gap in road funding, ensuring each dollar paid at the gas pump is invested back into the road infrastructure. Additionally will require businesses, specifically Big Tech, to pay more in taxes for doing business in Michigan, and to introduce a wholesale tax on the marijuana industry.

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Latest Product Recall from Michigan CRA on Vapes Containing MCT Oil

On February 11, 2025, the Michigan Cannabis Regulatory Agency released a bulletin on a voluntary product recall on certain vapes from the brand BLOOM Classic and BLOOM Live that were found to contain Medium Chain Triglyceride (MCT) Oil, which had been banned for use in 2024.

Why it Matters: The products affected are from the brand Platinum Vapes. MCT Oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. The CRA banned the use of MCT Oil starting October 1, 2024.

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U.S. Supreme Court’s Decision on TikTok

On January 17, 2025, the Supreme Court delivered a landmark decision in TikTok Inc. v. Garland, upholding the constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act. TikTok argued that the law infringed upon its First Amendment rights, claiming that it was being unfairly targeted as a foreign adversary-controlled application and that the divestiture requirement placed an unconstitutional burden on free speech. However, the Supreme Court disagreed, ultimately finding that the Act was a content-neutral law that was not in violation of the First Amendment.

Why it Matters: This Supreme Court decision marks a pivotal moment in the ongoing struggle between the protection of technology-based free speech and national security concerns. When or if Congress considers applying the Act’s prohibitions to other social media platforms, how the Court addresses the constitutionality of those future challenges will be crucial to watch. Read more.

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Business Education Series: Anatomy of a Data Breach

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Intellectual Property | Andrew Martin

Five Stories That Matter in Michigan This Week – February 7, 2025

Update: FinCEN – Supreme Court – CTA Injunction

FinCEN has given notice of its appeal in the Smith case: the lawsuit that led to the current nationwide injunction that makes Beneficial Ownership Information (BOI) reporting voluntary under the Corporate Transparency Act (CTA). If the court grants FinCEN’s appeal and lifts the injunction, BOI reporting would again become mandatory.

Why it Matters: In that event, the government has informed the court that FinCEN plans to implement a 30-day filing extension and “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities.” Read more.

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Michigan Cannabis Grower Wins $32M Verdict in Contract Dispute

A federal court jury awarded Michigan-based Hello Farms $32 million last week after finding that Curaleaf, a large cannabis company, breached its purchase agreement from 2020-2021. The dispute arose when Curaleaf, after purchasing only 2,000 of the contracted 16,000 pounds of cannabis, demanded to renegotiate the agreement due to rapidly falling market prices.

Why it Matters: This case highlights the significant challenges facing Michigan’s cannabis industry as it grapples with volatile market conditions and plummeting prices. Particularly for those operating under long-term purchase agreements, this verdict underscores the importance of carefully considering the various business and legal risks of making significant purchase production commitments in an unstable market environment. It’s crucial to seek out experienced legal counsel in such situations.

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U.S. Supreme Court’s Decision on TikTok

On January 17, 2025, the Supreme Court delivered a landmark decision in TikTok Inc. v. Garland, upholding the constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act. TikTok argued that the law infringed upon its First Amendment rights, claiming that it was being unfairly targeted as a foreign adversary-controlled application and that the divestiture requirement placed an unconstitutional burden on free speech. However, the Supreme Court disagreed, ultimately finding that the Act was a content-neutral law that was not in violation of the First Amendment.

Why it Matters: This Supreme Court decision marks a pivotal moment in the ongoing struggle between the protection of technology-based free speech and national security concerns. When or if Congress considers applying the Act’s prohibitions to other social media platforms, how the Court addresses the constitutionality of those future challenges will be crucial to watch. Read more.

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Michigan CRA Issues Product Recall on Vapes Due to MCT Oil

The Michigan Cannabis Regulatory Agency recently released a bulletin on a voluntary product recall on certain vapes that were found to contain Medium Chain Triglyceride (MCT) Oil, which had been banned for use in 2024.

Why it Matters: The products affected are from the brand Platinum Vapes. MCT Oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. The CRA banned the use of MCT Oil starting October 1, 2024.

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Business Education Series: Anatomy of a Data Breach

Related Practice Groups and Professionals

Business & Tax | Robert D. Burgee
Cannabis Law | Sean Gallagher
Intellectual Property | Andrew Martin

UPDATE: FinCEN – Supreme Court – CTA Injunction

UPDATE: FinCEN has given notice of its appeal in the Smith case: the lawsuit that led to the current nationwide injunction that makes Beneficial Ownership Information (BOI) reporting voluntary under the Corporate Transparency Act (CTA). If the court grants FinCEN’s appeal and lifts the injunction, BOI reporting would again become mandatory. In that event, the government has informed the court that FinCEN plans to implement a 30-day filing extension and “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities.”

Given the U.S. Supreme Court’s prior decision to stay a similar injunction in Texas Top Cop Shop Inc., it would not be surprising if the Fifth Circuit Court of Appeals follows suit and grants the government’s request in this matter. But how FinCEN ultimately defines “low-risk entities” remains to be seen.

Therefore, as we have advised for several months, reporting companies should continue monitoring these proceedings, consult with legal counsel, and be prepared to file a BOIR when and if required.

U.S. Supreme Court’s Decision on TikTok

On January 17, 2025, the Supreme Court delivered a landmark decision in TikTok Inc. v. Garland, upholding the constitutionality of the Protecting Americans from Foreign Adversary Controlled Applications Act (“The Act”). The Act’s challenged provision prohibits any U.S. company from providing services to “distribute, maintain, or update the social media platform TikTok, unless the platform is severed from Chinese control.” However, the Act also creates an exemption from the Act’s prohibitions if the foreign adversary controlled application, aka TikTok, undergoes a “qualified divestiture.” The President determines when a “qualified divestiture” has taken place by ensuring that the application will “no longer be controlled by a foreign adversary,” specifically in regard to the apps’ operation of the content recommendation algorithm and the apps’ data sharing.

The central issue in TikTok Inc. v. Garland was whether the Act violated the First Amendment. TikTok argued that the law infringed upon its First Amendment rights, claiming that it was being unfairly targeted as a foreign adversary-controlled application and that the divestiture requirement placed an unconstitutional burden on free speech.

However, the Supreme Court disagreed, ultimately finding that the Act was a content-neutral law that was not in violation of the First Amendment. In order to be considered a content-neutral law, the Act needs to advance “important government interests unrelated to the suppression of free speech and … not burden substantially more speech than necessary to further those interests.” As for the “important government interests” the Act was pursuing, the Court highlighted Congress’s content-neutral justification for the Act’s provisions, which was to prevent China from gathering the private data of over 170 million U.S. citizens. Specifically, Congress was trying to address the concern that TikTok’s parent company, ByteDance Ltd., is a company operated from China, which makes it subject to Chinese laws that require the company to “assist or cooperate” with the Chinese government’s “intelligence work” and to ensure that the Chinese Government has “the power to access and control” the company’s private data.

The Court also explained that the Act’s prohibitions are not more burdensome than necessary because the prohibitions are a conditional ban on the app, which will be lifted if a “qualified divestiture” between TikTok and ByteDance, Inc., its parent company, is achieved. This conditional ban is necessary, the Court reasoned, since without the divestiture, the U.S.’s data collection concerns cannot be properly addressed.

As for what happens now, President Trump granted TikTok Inc. a 75 day extension to become in compliance of the Act. Therefore, unless Tik Tok has completed a qualified divesture by the end of Trump’s extension deadline, TikTok users may need to find another place to post and consume their media content.

For U.S. TikTok users, it is important to know a few things moving forward: Some users may wonder, “What rights do I have to the content I have created on TikTok? Can I use my content on other platforms? Can TikTok continue to use my content if I am no longer able to access the site?” First, yes, TikTok content creators on the app do own the content that they make and distribute on TikTok. The content creators also own the copyright to the content they make through the app. Content creators can also have the right to download their content to their personal devices and post their content to other platforms, as long as the users comply with both TikTok’s and the other platform’s user guidelines.

As for the last question, yes, TikTok does have the right to use the content that you posted and uploaded to their app even if you are no longer utilizing the application. Once you have uploaded “User Content” to TikTok, TikTok can, among other things, distribute, transmit, republish your videos worldwide and to other third parties without your consent.

This Supreme Court decision marks a pivotal moment in the ongoing struggle between the protection of technology-based free speech and national security concerns. When or if Congress considers applying the Act’s prohibitions to other social media platforms, how the Court addresses the constitutionality of those future challenges will be crucial to watch.

Andrew G. Martin is an experienced registered patent attorney with history working in the automotive, electrical, and agricultural industries. He regularly advises startups and small businesses on the patent and trademark prosecution process, assisting clients from start to finish. You can reach him at 517.377.0834 or at amartin@fraserlawfirm.com.

Taylor Mikkelson and Jennie Brooks are law clerks at Fraser Trebilcock, both currently 2L at Michigan State University College of Law.