Michigan’s employment landscape is undergoing significant changes in 2025, with new laws and regulations that employers must understand and implement to remain compliant. From updates to sick leave policies to adjustments in minimum wage and proposed pay transparency measures, staying informed is crucial. This guide outlines the key HR compliance areas Michigan employers should focus on in 2025.

1. Earned Sick Time Act (ESTA) – Effective February 21, 2025

The reinstated Earned Sick Time Act (ESTA) introduces comprehensive requirements for paid sick leave:

• Accrual Rate: Employees earn 1 hour of sick leave for every 30 hours worked.​
• Usage Caps:
  • Employers with 10 or more employees: Must provide up to 72 hours of paid sick leave annually.
  • Employers with fewer than 10 employees: Required to offer 40 hours of paid sick leave and an additional 32 hours of unpaid leave.​
• Permissible Uses: Sick leave can be used for personal or family health needs, domestic violence situations, and public health emergencies.​
• Carryover: Unused sick time can be carried over to the following year, with no limit on accumulation.​
• Employer Responsibilities:
  • Provide written notice to employees about their rights under ESTA.
  • Display the required workplace poster.
  • Maintain records of sick leave accrual and usage for at least three years.
  • Ensure no retaliation against employees who use their earned sick time.​

Employers should review and update their leave policies to align with ESTA requirements and train HR personnel on the new provisions. ​

2. Minimum Wage Increases

Michigan’s minimum wage is set to increase in 2025 under the Improved Workforce Opportunity Wage Act:​

• Effective January 1, 2025: $10.56 per hour.​
• Effective February 21, 2025: $12.48 per hour, with annual increases scheduled, reaching $14.97 by February 21, 2028.​
• Tipped Employees: The tipped minimum wage will gradually increase, reaching parity with the standard minimum wage by 2030.​

Employers must adjust their payroll systems to reflect these changes and ensure compliance with wage laws. ​

3. Pay Transparency and Equity Legislation

Michigan is considering legislation to enhance pay transparency and equity:​

• HB 4406: Would require employers to provide wage information for employees in similar roles upon request.​
• SB 142: Would mandate that job postings include salary or wage ranges.​

While these bills are not yet law, employers should prepare by reviewing compensation structures and job descriptions to ensure fairness and transparency. ​

4. Employee Handbook Updates

With the new laws taking effect, it’s essential to update employee handbooks to reflect current policies:​

• Mandatory Policies:
  • Earned Sick Time Act provisions.
  • Updated minimum wage rates.
  • Non-discrimination and equal employment opportunity statements.
  • Whistleblower protections.​
• Recommended Policies:
  • Remote work guidelines.
  • Social media conduct.
  • Workplace safety protocols.​

Regularly reviewing and updating the employee handbook ensures that company policies are compliant and clearly communicated. ​

5. Labor Law Posting Requirements

Michigan employers are required to display updated labor law posters in the workplace:​

• Minimum Wage Poster: Reflecting the new wage rates effective February 21, 2025.​
• Earned Sick Time Act Poster: Outlining employee rights under the new sick leave law.​

These posters must be placed in a conspicuous location accessible to all employees. ​

6. Workers’ Compensation Law Changes

Proposed legislation in Michigan may alter workers’ compensation benefits:​

• SB 1079: Would change the definition of disability and eligibility for benefits, potentially affecting claims related to wage loss.​
• SB 1080: Would modify death benefit provisions, presuming certain dependents are wholly reliant on the deceased employee’s wages.​

Employers should monitor these developments and consult with legal counsel to understand potential impacts on their workers’ compensation obligations. ​

7. Compliance Best Practices

To navigate these changes effectively:

• Policy Review: Regularly assess and update company policies to align with current laws.​
• Training: Educate HR personnel and management on new compliance requirements.​
• Record-Keeping: Maintain accurate records of employee hours, wages, and leave accruals.​
• Legal Consultation: Engage with legal experts to ensure comprehensive compliance.​

Conclusion

Staying compliant with Michigan’s evolving employment laws in 2025 is critical for employers to avoid legal risks and foster a fair workplace. By proactively updating policies, training staff, and monitoring legislative developments, businesses can navigate these changes successfully.

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