Tag: ESTA

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.

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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.

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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.

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

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[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.