2024 Michigan Labor & Employment Year End Review

Chicago, Ill. (April 9, 2025) - There were a few key developments for labor and employment law in the state of Michigan for the year 2024. Such developments include changes to Michigan’s paid sick leave requirements and increases to the minimum wage. Here is a summary of these key changes.

Paid Sick Leave

On July 31, 2024, the Michigan Supreme Court issued a decision in Mothering Justice v. Attorney General that resulted in significant changes to Michigan’s paid sick leave requirements. In 2018, two voter-initiated ballot proposals were adopted by the Michigan legislature, which included the Earned Sick Time Act (ESTA). Shortly thereafter, the ESTA was amended to create the Paid Medical Leave Act (PMLA) (the amended version of the ESTA), which took effect in March 2019 and outlined Michigan’s sick leave requirements. However, in accordance with the Mothering Justice decision, beginning on February 21, 2025, the initial version of the ESTA was reinstated with amendments and replaced the PMLA.

One significant change pursuant to the reinstated and amended ESTA is the requirement for Michigan employers to provide paid sick leave to all employees, subject to few exceptions. Under the PMLA, employers with fewer than 50 employees were not required to provide paid sick leave. The PMLA also only covered full-time and non-exempt employees. However, as of February 21, 2025, all employers in Michigan are required to provide all employees, subject to exceptions, with paid sick leave under the amended ESTA as a result of the Mothering Justice decision.

The amended ESTA has different requirements depending on the size of the employer. Under the amended ESTA, eligible employees will accrue one hour of paid sick leave for every 30 hours worked, as opposed to the accrual rate of one hour for every 35 hours worked under the PMLA. Large employers (those with 10 or more employees) are required to allow eligible employees to use up to 72 hours of accrued paid sick leave per year, and small businesses (those with less than 10 employees) are required to allow eligible employees to use up to 40 hours of accrued paid sick leave per year. Paid sick leave must accrue as of February 21, 2025. However, small employers will have until October 1, 2025 to start providing its employees with 40 hours of paid sick leave.

Further, large employers may cap carryover of accrued, but unused paid sick leave from one year to the next at 72 hours; whereas small employers may cap carryover of accrued, but unused paid sick leave at 40 hours.

Large employers also have the option to frontload 72 hours of paid sick leave to its employees at the start of the benefit year, and small employers may frontload 40 hours of paid sick leave. Although, carryover of accrued, but unused paid sick leave is not required if paid sick leave is frontloaded.

In accordance with the amended ESTA, an employee may use accrued sick leave for any of the following reasons:

• The employee’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the employee’s mental or physical illness, injury, or health condition; or preventative medical care for the employee;
   
• For the employee’s family member’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the employee’s family member’s mental or physical illness, injury, or health condition; or preventative medical care for a family member of the employee;
   
• If the employee or the employee’s family member is a victim of domestic violence or sexual assault, for medical care or psychological or other counseling for physical or psychological injury or disability; to obtain services from a victim services organization; to relocate due to domestic violence or sexual assault; to obtain legal services; or to participate in any civil or criminal proceedings related to or resulting from the domestic violence or sexual assault;
   
• For meetings at a child’s school or place of care related to the child’s health or disability, or the effects of domestic violence or sexual assault on the child; or
   
• For closure of the employee’s place of business by order of a public official due to a public health emergency; for an employee’s need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency; or when it has been determined by the health authorities having jurisdiction or by a health care provider that the employee’s or employee’s family member’s presence in the community would jeopardize the health of others because of the employee’s or family member’s exposure to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease.

The amended ESTA further permits employers to take disciplinary action against employees if they use accrued sick leave for a purpose other than one permitted under the ESTA or fail to follow any notice requirements.

Michigan employers should take the necessary steps to ensure they are compliant with the paid sick leave requirements under the amended ESTA now in effect.

Minimum Wage Increase

The Mothering Justice decision also reinstated the initial version of the Improved Workforce Opportunity Wage Act (IWOWA), which adjusts the minimum hourly wage and tip credit schedule at an incremental rate adjusted for inflation. Thus, Michigan’s minimum wage recently increased to $12.48 per hour in February 2025, with the minimum wage rate increasing to $13.73 on January 1, 2026 and thereafter to $15.00 on January 1, 2027 in accordance with the IWOWA, which covers employers with two or more employees who are 16 years of age and older.

Michigan’s “Right to Work” Law Repealed

On February 13, 2024, SB 34 went into effect, making Michigan the first state in 58 years to repeal a right-to-work law. In right-to-work states, employees have the authority to decline union membership, and thus opt out of paying union fees, and continuing to work. However, with the repeal of Michigan’s right-to-work law, unionized workplaces in Michigan may now require union membership, and the payment of union fees, as a condition of employment. SB 34 further solidified the repeal of Michigan’s right-to-work law by prohibiting any municipality from enacting a right-to-work ordinance or policy. As such, private sector employers in Michigan should be advised accordingly when negotiating collective bargaining agreements. 

Employer Discrimination Based on Pregnancy Termination Prohibited

On March 28, 2024, SB 147 took effect. The law amended Michigan’s Elliot-Larsen Civil Rights Act (ELCRA) to prohibit employers from discriminating against an individual’s decision to end a pregnancy for any reason. SB 147 now further defines “sex” to include “pregnancy, childbirth, the termination of a pregnancy, or a related medical condition.” Michigan employers should ensure their discrimination policies are compliant with these amendments.

Michigan Salary and Pay Transparency Laws

There are two proposed laws in Michigan relating to pay transparency. If implemented, these laws will have a significant impact on employers doing business in Michigan.

HB 4406 would require Michigan employers to furnish certain wage information for similarly situated employees dating back three years within 30 days of an employee’s request. Employers would be permitted to redact the names of similarly situated employees, but would have to provide their sex and seniority along with salary and hourly pay, overtime pay, bonus pay, and other forms of compensation.

Further, SB 142 would require Michigan employers with more than five (5) employees to create and maintain a job description, including salary information, for each position and make it available to all applicants during the hiring and promotion process and to any employee upon request.

If you have any questions about these developments, contact the author or editor of this alert. Visit our Labor & Employment Practice page to learn more about our capabilities in this area.

Author:

Natalie Fouque, Associate

Editor:

Stephen Sitley, Partner