Great Lakes Wire

Since the Michigan Supreme Court ruled the process of adopt and amend to be unconstitutional earlier this summer, employers have been faced with the prospect of complying with two problematic employment laws early next year. Michigan’s minimum wage law and the paid sick leave law will revert to the original ballot initiatives passed in 2018 on February 21, 2025.

The minimum wage law will primarily impact employers that rely on a lower minimum wage. A particular feature of this law is the tip credit, which allows restaurants and other establishments employing tipped workers to pay less than the standard minimum wage. If this law goes into effect, employers in the hospitality industry will face higher costs and may conduct layoffs to address these increased expenses.

The Earned Sick Time Act (ESTA) affects all Michigan employers by requiring them to provide up to 72 hours of paid sick time each year. This paid time off law is also expected to negatively impact small employers.

Since the Court’s ruling, discussions about amending these laws have intensified. Businesses quickly realized the implications of a significant increase in the minimum wage, loss of the lower tipped worker minimum wage, and additional costs from paid time off. Consequently, they have been urging lawmakers to amend these laws.

With Michigan’s legislature returning from summer recess, Republican legislators are preparing bills to address these issues. The question remains whether some Democrat legislators will support these changes. Reports indicate that many sympathetic Democrat legislators agree with amending the minimum wage law; however, broader support for changing ESTA is uncertain. The paid sick leave law impacts even single-employee businesses.

With an impending election and limited time before these laws take effect, employers and their representatives are encouraged to contact their state legislators directly or work through their industry business associations to press for swift amendments before year-end.

ASE Connect provides resources such as an ESTA FAQ page for answers and downloadable posters required by February.

By Michael Burns, courtesy of SBAM-approved partner ASE. Source: Gongwer - Groups Push to Preserve Tipped Wage; Singh Hopeful for Deal (9/5/2024).