On Wednesday, the Michigan Supreme Court, in a 4-3 decision, issued its long awaited ruling on the minimum wage increase and paid sick leave laws. Both laws were the result of a 2018 petition drive. The Legislature adopted the bills into law, but later amended them during the lame duck session. The Court declared that the Legislature’s amendment violated the State Constitution.

As a result of this ruling, Michigan’s minimum wage will return to the original schedule set forth in the 2018 proposal, which was $10 in 2019, $10.65 in 2020, $11.35 in 2021 and $12 in 2022. The Court ordered that the new schedule begin on February 21, 2025, and the State Treasurer must adjust the schedule for inflation, which must be completed by November 1, 2024.

Tipped employees will also see an increase in their hourly pay as follows:

2025 – 48% of the minimum wage

2026 – 60% of the minimum wage

2027 – 70% of the minimum wage

2028 – 80% of the minimum wage

In 2029, the tip credit will no longer be in existence and tipped employees will be paid at least minimum wage.

As for the paid sick time under the Earned Sick Time Act (ESTA), large employers (more than 10 employees) will be required to provide at least 72 hours of paid sick leave each year to their employees. Employers that employ less than 10 employees will be required to provide 40 hours paid and 32 hours unpaid sick leave. Any unused sick time must be carried over into the next calendar year. Employers with 50 or less employees will no longer be exempt from having to provide paid sick leave. These changes will also go into effect on February 21, 2025.

Michigan’s current minimum wage is $10.33. The Court’s decision will impact employers’ business and policies covering minimum wage and sick leave. Employers should examine their policies and assess any necessary modifications needed to be in compliance with these new laws.

Should you have any questions or require any assistance, please do not hesitate to contact us.

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Michigan Supreme Court Restores 2018 Minimum Wage and Paid Sick Leave Laws

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