The Michigan legislature came to a last-minute compromise on minimum wage and sick leave updates that were scheduled to take effect February 21, 2025. Today, Governor Whitmer signed those amendments into law. Below is everything you need to know about the latest changes. Need a customized, legally compliant employee handbook? Visit our Handbook page to build yours in just a few clicks.
HR & Legal Updates
Sick Leave
House Bill No. 4002 changed the Earned Sick Time Act in several important ways:
- Small businesses (those with 10 or fewer employees) now don’t need to comply with the new sick leave law until October 1, 2025. For employers with more than 10 employees, the February 21, 2025 effective date still applies.
- The definition of “small business” changed slightly. Before the change, a “small business” was one with 9 or fewer employees. Now it’s one with 10 or fewer employees.
- Small businesses can limit employees to a total of 40 hours of sick leave per year. Before the change, small businesses had to allow employees to use 40 hours of paid sick leave and an additional 32 hours of unpaid sick leave, for a total of 72 hours. An annual use cap of 72 hours still applies to all other employers.
- Small businesses can comply with the sick leave law by frontloading 40 hours of paid leave, as opposed to 40 hours of paid leave and 32 hours of unpaid leave, which the law previously required.
- Employers can frontload leave for part-time employees if they meet certain requirements set out in the law.
- Employers that frontload the full amount of sick leave no longer have to allow carryover of unused leave to the next year.
- Employers can cap the amount of unused sick leave that carries over to 40 hours for small businesses and 72 hours for all other businesses. Before the change, there was no cap on carryover.
- Employers can require new employees hired after February 21, 2025, to wait 120 days (instead of 90 days) to start using accrued leave. Employees hired before that date can use sick leave as soon as it is earned.
- If the need for leave is unforeseeable, employers have the option of requiring employees to follow the employer’s normal policy for requesting sick leave if the employer provides certain notice to employees about that policy.
- If an employee is rehired within 2 months (instead of 6 months) of separation, the employer has to give them back their previously accrued and unused sick leave.
- The prior version of the law lets employees take leave in increments of one hour or the smallest increment used by the employer’s payroll system, whichever is smaller. The change appears to allow employers to use increments of either one hour or the increment their payroll system uses, without regard to which is smaller.
- If an employer requests documentation from the employee showing that leave was taken for an allowable reason, the employee has 15 days to provide that. Employers can still only request documentation if an employee takes leave for more than 3 days in a row.
- The updated law provides a three-year grace period for new small businesses. The sick leave requirements don’t apply to small businesses until 3 years after they hire their first employee.
- Employers have an extra 30 days (until March 23, 2025) to provide the required sick leave notice to employees.
Bottom line: The new sick leave law takes effect immediately for employers with more than 10 employees. Small businesses with 10 or fewer employees should be prepared to comply with the new law by October 1, 2025. We’ve updated our Michigan sick leave policy to comply with these latest changes. If you have Michigan employees, you should regenerate your handbook, addenda, or sick leave policy to see these updates.
Minimum Wage
Michigan’s minimum wage increased to $10.56 on January 1, 2025, then again to $12.48 on February 21, 2025. The minimum wage was scheduled to continue increasing yearly until it reached $14.97 in 2028.
The state legislature’s last-minute agreement on Senate Bill 008 amended the minimum wage rollout schedule. The $12.48 minimum wage increase for today, February 21, 2025, remains in effect. Under the new schedule, the minimum wage will increase to $13.73 on January 1, 2026, and to $15 on January 1, 2027. Starting in 2027, the state treasurer will be responsible for updating the minimum wage to adjust for inflation every October.
Disclaimer: The information in this HR & Legal Update is provided for general educational purposes only and does not constitute legal advice. Akamai HR Solutions, LLC is not a law firm, and no attorney–client relationship is created by your use of this content. Laws may change or apply differently to your business. For legal guidance tailored to your specific circumstances, please consult a qualified attorney.