Michigan passed laws taking effect on February 21, 2025, to amend the state minimum wage, tip credit, and paid sick leave (PSL) requirements.
Minimum Wage
Effective February 21, 2025, the Michigan minimum wage increased to $12.48 per hour from $10.56 per hour. The minimum wage will now increase annually on January 1 as follows: to $13.73 per hour, effective January 1, 2026; and to $15 per hour, effective January 1, 2027. Starting in 2028, the minimum wage will be adjusted annually for inflation. A poster with the new minimum wage rates is available from the Michigan Department of Labor and Economic Opportunity.
Tip Credit
Effective February 21, 2025, the tip credit increased to $7.74 per hour from $6.55 per hour. On January 1, 2026, the tip credit will increase to $8.24 per hour. On January 1, 2027, the tip credit will increase to $8.70 per hour. The tip credit will decrease in proportion to the minimum wage annually on January 1 until the state tip credit and minimum cash wage are equal in 2031.
Paid Sick Leave
Employees now accrue 1 hour of PSL for every 30 hours worked. Small employers, those with 10 or fewer employees, must allow accrual up to 40 hours of PSL annually. Large employers must allow accrual up to 72 hours annually. Employees who were hired before February 21, 2025, may begin using benefits as they accrue; however, employees hired after that date may be required to wait 120 calendar days after they begin employment. Small employers are not required to begin tracking PSL or allow accrual until October 1, 2025.
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Lorelei Abernathy, Esq., is Editor of PayState Update and Editor of Payroll Information Resources for PayrollOrg.
