February 20, 2025

LEGISLATURE PASSES ESTA AND MINIMUM WAGE LAW BILLS – This week the House and Senate reached an agreement and passed bills to amend the state’s Earned Sick Time Act and the state’s minimum wage laws.

The House first passed Senate Bill 8 yesterday and the Senate passed House Bill 4002 today to amend the state’s minimum wage law and paid sick time law before changes would take effect on Friday, February 21^st. The Senate passed Senate Bill 8 last week, which makes numerous changes to the state’s minimum wage law. The House quickly moved the legislation on Wednesday to third reading and passed the bill 63 to 21, with 26 members not voting. As highlighted last week, under Senate Bill 8, the tipped minimum wage is set at 38 percent of the regular minimum wage for the rest of 2025 and would rise to 40 percent on January 1, 2026, and rise an additional 2 percent on January 1 of each subsequent year until it reaches 50 percent effective January 1, 2031. It would then be capped at 50 percent. It also would keep the regular minimum wage increase to $15 an hour beginning January 1, 2027. From there it would be adjusted yearly based on the consumer price index for the Midwest region. Additionally, the bill has language that sets a fine of $2,500 to be assessed to employers who fail to ensure tipped workers get paid at least the minimum wage. Lastly, the bill was tie-barred to House Bill 4002.

The Senatt hen passed House Bill 4002 today. The Senate spent most of the day in recess as final agreements between House Republicans and Senate Democrats were made to the legislation. Shortly after 8 p.m. the Senate discharged House Bill 4002 from the Senate Regulatory Affairs Committee and took it up on the floor just before 11 p.m. House Bill 4002 passed the Senate by a margin of 26-10, with 10 Senate Democrats voting no and all Republicans voting yes. Under the S-3 substitute passed by the Senate, House Bill 4002 would give workers one hour of paid sick time for every 30 hours worked. The S-3 version gives small businesses of 10 or fewer employees until October 1^st, 2025, to comply with the new Earned Sick Time Act rules, but they must provide 40 hours of paid sick time up front. The bill also allows frontloading sick time for employees and there is no requirement to pay out sick time at the end of the year, and no calculating and tracking accrual of sick time. Variable hour employees are exempt, as well as unpaid trainees and unpaid interns, and seasonal employees are unable to use sick time within 120 days of employment unless the sick time is front loaded. House Bill 4002 was given immediate effect.

The House concurred the Senate substitute for House Bill 4002 by a margin of 81-29 and the Governor is anticipated to sign the bill as soon as it is presented.

To view House Bill 4002 as passed, please click here.

To view Senate Bill 8 as passed, please click here.

MHSA
Muchmore Harrington Smalley & Associates, LLC

124 West Allegan St., Suite 1900 | Lansing, MI 48933 | Phone: 517-484-8800 | Fax: 517-484-4442 | Email:rsmith@mhsa.com
Follow MHSA onFacebook|Twitter|LinkedIn