Lansing, Mich. — After significant legislative maneuvers and court rulings, Michigan has enacted new laws altering the state’s minimum wage, tipped wage, and employee sick time regulations. Governor Gretchen Whitmer officially signed two pivotal bills on Friday, February 21, 2025, which became effective immediately and applied retroactively due to urgency pronounced by both lawmakers and the public.
These reforms emerged from a turbulent legislative history that began in 2018 when groups such as Mothering Justice, Michigan One Fair Wage, and Michigan Time to Care proposed increases to the minimum wage and improvements to sick leave benefits. These ballot initiatives were preempted by the state’s legislature, which adopted and later modified the measures to less stringent forms, inciting controversy and legal challenges.
A critical turning point occurred in July 2024, when the Michigan Supreme Court declared it unconstitutional for the legislature to alter citizen-initiated petitions after adoption. This ruling reinstated the originally proposed terms for wage and sick time laws, setting a new compliance deadline of February 21, 2025.
Under the reinstated laws, there were planned phase-outs for the tipped wage and adjustments to the minimum wage tied to inflation. However, in a late-night session just before the compliance deadline, Michigan lawmakers passed Senate Bill 8, which outlined that the general minimum wage would rise to $15 by January 1, 2027, with subsequent annual adjustments tied to inflation unless the unemployment rate exceeds 8.5%.
For tipped employees, Senate Bill 8 stipulates that their wage will initially hold at 38% of the minimum wage in 2025, gradually increasing to 50% by 2031. This modification has spurred controversy and activism, notably from One Fair Wage, which immediately announced plans to initiate a statewide referendum to challenge these revisions.
Comparatively, the Earned Sick Time Act has also seen significant amendments. Initially intended to apply broadly across all businesses regardless of size, the amended version under House Bill 4002 changes the scope to businesses with more than 50 employees and increases the limitations on how sick time can be accrued, used, and carried over. Notably, smaller businesses are given more lenient standards set to start in October 2025.
These legislative changes in Michigan reflect a broader national conversation about wages and worker rights, where other states have either eliminated subminimum wages for tipped employees or are considering similar reforms. This national trend underscores the variability in how states value labor and prioritize economic factors versus workers’ welfare.
Lastly, the activism and legal challenges surrounding these issues highlight a dynamic interplay between voters, legislatures, and the courts in shaping economic policy at the state level. As Michigan navigates these changes, stakeholders from various sectors continue to debate the implications for the state’s workforce and economy overall.
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