Minimum wage, paid sick time loom over Michigan's lame-duck session

Looming over the lame-duck session of the Michigan Legislature from now until the end of the year are imminent changes to the state’s minimum wage and paid sick time policies, both set to take effect in February because of an order issued by the Michigan Supreme Court earlier this year.  

Reps. Nate Shannon, D-Sterling Heights, and Graham Filler, R-Duplain Township, introduced legislation to address the changes, backing legislation that puts minimum wage at $12 an hour next year instead of the $12.48 an hour rate it’s slated to be on Feb. 21, 2025. The legislation would also result in the hourly minimum wage gradually increasing until it reaches $15 in 2029, a year later than currently planned under the schedule set by the state Department of Labor and Economic Opportunity, which sets the minimum wage at $14.97 an hour in February 2028. 

The bill would also preserve the tipped minimum wage in Michigan. The tipped minimum wage is the lower hourly wage paid to workers expected to make up the difference in tips, like restaurant servers and bartenders. With no legislative action, the tipped minimum wage is set to be gradually eliminated in Michigan, putting tipped workers at the standard minimum wage in 2030.

The second bill in the package deals with the state’s Earned Sick Time Act. 

If leaders in Lansing cannot reach a deal, employees in Michigan will earn one hour of paid sick time for every 30 hours worked starting Feb. 21, 2025. Businesses with 10 or more employees will have to allow workers to use up to 72 hours of paid sick leave if accrued. Businesses with fewer than 10 employees will have to allow workers to use up to 40 hours of paid sick leave if accrued, and up to 32 hours of unpaid sick leave. The new rules won't apply to workers employed by the federal government. 

The bills were referred to the House Regulatory Reform Committee, where they await a hearing. Even if the bills advance through the House, they still would need approval from the Senate and Gov. Gretchen Whitmer to take effect. 

Democrats, set to lose control of the state House after the November election, are faced with either spurning allies in the labor community who’ve urged them not to weaken increases to wages for workers and their ability to earn paid leave time, or angering business advocacy groups which have called for months to prevent the planned changes from going into place.  

A spokesperson for House Speaker Joe Tate, D-Detroit, said discussions on potential legislation to address minimum wage and paid sick leave laws are ongoing. 

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“A final decision has not yet been made,” Amber McCann, House Democrats' spokesperson, said over email. 

Filler said he’s confident lawmakers and the governor’s office will reach a consensus on addressing the changes, adding it’s the “number one issue” he’s fielded calls on in his district. 

“I hope to get something negotiated in the next three weeks,” he said.  

In July, the Michigan Supreme Court ruled the Legislature acted unconstitutionally in 2018 when it adopted petition language seeking to boost minimum wage and expand paid sick leave requirements for employers, but amended the language to delay the minimum wage increase and exempt most businesses from having to comply with the paid sick leave requirements. 

The court’s ruling, however, wiped out the 2018 changes and established a date of Feb. 21, 2025, for the intended changes to take effect.  

Business advocacy groups have besieged the Legislature with calls to either undo the changes or reach a compromise on minimum wage and paid leave policies. Tipped workers have organized as well, with many expressing concerns their pay would actually decrease if the tipped wage were eliminated.

In September, a group of leading business organizations in Michigan laid out proposed changes for the paid leave policy, including restoring exemptions for businesses with fewer than 50 employees, allowing employers to frontload paid leave time at the start of each year, rather than needing employees to accrue it, and removing provisions allowing employees to submit notice to use leave “as soon as practicable.”

But organizers of the original petitions have called on lawmakers to leave the court’s ruling intact, saying workers in Michigan will benefit from higher wages and the ability to accrue paid leave time. Labor groups also have urged Democratic leaders not to undo pending increases. In September, several prominent unions in the state, including the Michigan Education Association and the Michigan AFL-CIO, sent a letter to Tate and Sen. Majority Leader Winnie Brinks, D-Grand Rapids, urging them to "stand firm in support of these worker gains and reject any efforts to obstruct or undermine them." 

If lawmakers are not able to reach a consensus on minimum wage and paid sick legislation during lame duck, it is possible Republicans could take up legislation when they come into control of the House in January. Incoming House Speaker Matt Hall, R-Richland Township, said last week the issue "is the biggest thing in the state right now to face in lame duck."

Free Press staff writer Clara Hendrickson contributed to this report.

Contact Arpan Lobo: [email protected].