The minimum wage in Michigan is currently $10.33 per hour. The inflation-adjusted minimum wage will surpass that next year. The tipped minimum wage is currently 38% of the standard hourly minimum wage, clocking in at $3.93 per hour.
Legal Update
The Michigan Supreme Court came out with its long-awaited Mothering Justice decision, holding that the Legislature’s adopt and amend strategy from 2019 was unconstitutional. The Legislature had used this strategy to pare back a voter-initiative paid sick leave statute and changes to the minimum wage and tip credit.
As a result, the original, voter initiative sick leave (the Earned Sick Time Act) will go into effect on February 21, 2025. In general, the key differences from the current Michigan paid sick leave law (the Paid Medical Leave Act) are:
- ESTA applies to all employers (regardless of size) and all employees (including temps and independent contractors), whereas PMLA only applied to companies with 50 or more employees.
- Employees may use greater amounts of leave (72 under ESTA, versus 40 under PMLA).
- Employees also accrue it at a faster rate (1 hour earned per 30 hours worked under ESTA, versus 1 hour earned per 35 hours worked under PMLA).
- Employees may use leave in smaller increments (rather than 1-hour increments under PMLA).
- Employers may request documentation to substantiate need for earned sick leave only if absence is for 4 or more consecutive days, and employees must provide it “in a timely manner.”
- Posters will need to be updated, and the employer must provide notice of rights to new hires and current employees, including their right to file claims based on retaliation/discrimination.
- There is a rebuttable presumption of a violation if the employer takes an adverse personnel action within 90 days of the employee engaging in whistleblowing activity alleging violations of ESTA or informing others about their rights under ESTA.
The upshot is that you’ll need to amend your handbook to address this decision and ESTA before February 21, 2025. You may want to consider waiting to act, however, as the Legislature and Governor may work together to amend the ESTA before the implementation date.
Another result of the decision is that the MI minimum wage will be increasing, and the tip credit will be phased out. The schedule and amounts for those increases/phase out, subject to adjustment for inflation, are:
- February 21, 2026 – The minimum hourly wage will be $10.65, and the tip credit will be 60% of the minimum wage.
- February 21, 2027 – The minimum hourly wage will be $11.35, and the tip credit will be 70% of the minimum wage.
- February 21, 2028 – The minimum hourly wage will be $12.00, and the tip credit will be 80% of the minimum wage.
- February 21, 2029 – The minimum hourly wage will be calculated by the state treasurer, and the tip credit will no longer exist.
