*This post was updated on Oct. 24, 2024.

By Matt Nordfjord, Principal, firm of Cohl, Stoker & Toskey

The Michigan Supreme Court recently issued a long-awaited opinion in Mothering Justice v. Attorney General, restoring the 2018 voter-initiated provisions from the Improved Workforce Opportunity Wage Act (“IWOWA”) and the Earned Sick Time Act (“ESTA”).

The voter-initiated IWOWA set the general minimum wage at $12.00/hr. for 2022 with annual increases to the minimum wage every year thereafter based upon inflation as calculated by the State Treasury Department. The legislature in 2018 amended that law to provide lesser increases (to $10.56/hr. for 2024 & $10.80/hr. for 2025) until it reached a maximum of $12.05 in 2030. The Michigan Supreme Court held that this amendment was unconstitutional and the original provisions needed to be reinstated via a phased in process starting Feb. 21, 2025. The court called for the reinstatement of the original increases listed in the IWOWA ($0.65/hr. each year), plus each year’s inflation factors.

On Oct. 1, 2024, the state confirmed the schedule and amount that Michigan’s Minimum Wage will increase in 2025. The first increase will occur on January 1, 2025, following the rate increase schedule from $10.33/hr. to $10.56/hr. The second increase will occur on Feb. 21, 2025, consistent with the Mothering Justice decision of the Michigan Supreme Court, from $10.56/hr. to $12.48/hr., and will thereafter continue to increase by an annual inflation factor (link to the schedule provided by the state: https://www.michigan.gov/leo/news/2024/10/01/michigan-minimum-wage-rate-2025-increase-schedule).

Although many counties currently have wage rates that exceed these levels for their regular full-time employees, these changes could impact a number of county part-time, temporary and /or seasonal positions.

The ESTA mandates that all employees (full-time, part-time, temporary, and seasonal) accrue sick time at a rate of 1 hour for every 30 hours worked. Employees accrue up to 72 hours (unless employer selects a higher limit) of paid sick time in a year. Employees of “small businesses” (employers with fewer than 10 employees) accrue up to 40 hours of paid sick time and 32 hours of unpaid sick time each year. In either instance, employees carry over any unused sick time from year to year. However, employees cannot use more than 72 hours (paid or unpaid) per year.

The ESTA also expands on an employee’s rights to use sick time. It can be used for a variety of absences including illness/injuries (to care for themselves and family members), in connection with domestic violence or sexual assault and for certain business and school closures. Further, the ESTA prohibits an employer from imposing requirements that an employee provide documentation, including doctor’s notes, to support a leave request unless the absence was for more than three days. Employers are also prohibited from “front-loading” paid sick leave. Employers must allow employees to accrue paid sick leave as they work.

With the reimplementation of the IWOWA and ESTA, effective Feb. 21, 2025, counties and any other Michigan public and private employers should examine their current leave policies and make any necessary modifications needed to comply with the IWOWA and ESTA. To ensure compliance, employers should review:

• Is the company/government a covered employer: the ESTA applies to all Michigan employers with at least one employee, except the federal government.
• What types of employees are eligible for paid sick leave: the ESTA applies to full-time, part-time, temporary and seasonal employees.
• How does sick leave accrue: employees must accrue paid sick leave as they work.
• How many paid sick days may be used each year: employees can accrue and use up to 72 hours of paid sick leave a year.
• What types of absences are covered by the sick leave policies: the ESTA expands the reasons an employee may utilize paid sick leave.
• Are all employees, including part-time, temporary, and /or seasonal positions at wage levels that meet or exceed the minimum wage level as annually adjusted.

The ESTA requires employers to provide written notice to employees of certain of its provisions, including the employee’s right to file a complaint with a court or the Michigan Department of Licensing and Regulatory Affairs. There is a three-year statute of limitations and no requirement that an employee file a complaint with the department before proceeding to court. A violation of the Act could entitle the employee to reinstatement, back wages, liquidated (double) damages, costs, and attorneys’ fees.

The ESTA prohibits employers from retaliating against employees who exercise any right protected by the ESTA. Further, the ESTA creates a rebuttable presumption of a violation of the Act if an adverse action is taken against an employee within ninety days of the employee’s filing a complaint, cooperating with an investigation and/or informing on violations of the Act, opposing a policy prohibited by the Act or advising anyone of their rights under the Act.