Advocacy News – Feb. 13, 2025
What’s new: On Thursday evening, the Michigan Senate voted 20-12 to move legislation (SB 8) to fix the minimum wage law slated to go into effect Feb. 21. Conversations are ongoing between the Senate and House on whether a deal can be reached on amendments to the Earned Sick Time Act (ESTA), but the goal remains to see meaningful changes in both bills sent to the Governor’s desk next week.
Why it matters: Without a final deal and action, these two new sweeping laws will go into effect as written in just seven days with damaging impacts. The decisions ahead for organizations are difficult, which is why it’s critical lawmakers step in to make changes necessary to protect businesses and employees.
- The Michigan House passed strong, bipartisan changes to ESTA (HBs 4001 and 4002) Jan. 23. Senate Democrats have indicated that the those bills go too far, with their version of an ESTA fix (SB 15) fix now sitting on the Senate floor awaiting action.
- Last night, the Michigan Senate – with 12 Republican votes and eight Democrat votes – passed a substitute version of SB 8 that had been negoitated with the House, keeping the tipped minimum wage at 38% for the rest of 2025.
- It would then rise to 40% Jan. 1, 2026, and an additional 2% at the beginning of each new year until reaching a cap of 50% Jan. 1, 2031.
- The regular minimum wage would still increase to $15 an hour beginning Jan. 1, 2027. From there it would be adjusted yearly based on the consumer price index for the Midwest region.
- Other provisions include a $2,500 fine to be assessed to employers who fail to ensure tipped workers get paid at least minimum wage.
- As passed by the Senate, the minimum wage changes cannot be signed into law without ESTA changes also being signed.
- While the issues being negotiated are complex and politically charged, we continue to advocate on behalf of our members for meaningful amendments to the new law and believe a deal can be struck. The list is long but not unworkable through good faith negotiations. Key provisions that must be addressed include advanced notice, allowing more flexibility for employers wishing to keep one paid time off (PTO) bank, carryover caps, frontloading, eliminating the rebuttable presumption and private right of action, and more. We also continue to call for exemptions for small businesses and certain classifications of workers (part-time, seasonal, etc.), but those exemptions are controversial in the Senate.
Is a delay possible?: Gov. Whitmer engaged earlier this week and asked lawmakers to temporarily delay pending minimum wage and sick leave laws until July 1 if they are unable to reach a compromise in time.
The bottom line: A delay is possible but not guaranteed as lawmakers discuss possible landing spots. Given the Feb. 21 effective date is right around the corner, Michigan employers should continue to prepare for these laws to take effect as written Feb. 21 but continue to monitor whether statutory changes are agreed upon and enacted.
⚠️ Take action today and tell lawmakers Michigan’s employers, employees and economy are counting on them to act.
Go deeper: Read more on the ESTA limbo and what we’re saying.