Michigan's Paid Sick Leave
After the Michigan Supreme Court ruled on a case in July 2024 triggering the elimination of the tip credit and the enactment of the most rigid, burdensome paid leave mandate in the country, the MRLA advocated tirelessly for our industry and is proud to announce that on February 21, 2025, bipartisan MRLA-backed bills were signed into laws that saves the tip credit, responsibly increases the minimum wage, and smooths out rigid aspects of the paid leave laws.
As a result, the changes to Michigan's paid sick leave laws include the following:
- Takes effect on February 21, 2025 for businesses with more than 10 employees and October 1, 2025 for businesses with 10 or less employees
- Defines which employees are eligible and exempts temporary/seasonal workers (individuals scheduled for 25 weeks or less in a calendar year), independent contractors who set their own schedule, out-of-state employees, and variable-hour workers
- Clarifies how the rate of pay is calculated (normal hourly wage or base wage) and clarifies what is exempted (overtime pay, holiday pay, bonuses, tips, and commissions)
- Allows employers to set customary notice procedures and take disciplinary personnel action for failure to follow
- Defaults to one-hour increments for using earned sick time but allowing employers to select a different policy
- Removes the rebuttal presumption and the private right of action
- Allows for two options of tracking sick time:
- Accrual: Small businesses (less than 10 employees) may accrue 1 hour of sick time for every 30 hours worked, up to 40 hours per year. Larger businesses 1 hour per 30 hours worked, up to 72 hours per year. Maximum carryover for small businesses is limited to 40 hours, and up to 72 hours for larger businesses.
- Frontloading: Employers may frontload the full amount upfront (40 or 72 hours) at start of the year, and if they do, are not required to carryover any unused hours.
- Requires employers to pay tipped-employees state Minimum Wage or an employee's base wage (whichever is higher)
- Allows new small businesses 3 years from first hire to comply
- Includes special provisions for businesses with collective bargaining agreements
