We have some significant legislative updates to share that will impact Michigan businesses. These last-minute changes have arrived right in the heart of busy season, and we want to ensure you have all the essential information.
Michigan Minimum Wage Changes
The Michigan Legislature submitted compromise bills to Governor Whitmer just before the midnight deadline, when new laws regarding minimum wage and earned sick time were scheduled to take effect. While we’re still awaiting the official signed laws, here’s what’s being reported:
- Michigan’s minimum wage officially increased to $12.48 today
- The tipped minimum wage will remain at 38% of minimum wage for the remainder of 2025
- Minimum wage will increase to $13.73 on January 1, 2026
- Minimum wage will then rise to $15.00 on January 1, 2027
- After 2027, the minimum wage will adjust annually for inflation on January 1
- Tipped minimum wage will increase by 2% each year until it reaches 50% of the normal minimum wage in 2031
- New fines have been established for employers who fail to ensure their tipped employees receive minimum wage
Earned Sick Time Act (ESTA) Updates
The changes to the ESTA appear designed to help employers better manage sick time requirements. While employers must still offer paid time off to employees, several exceptions have been reported:
- You can require employees to wait 120 days before using their sick time
- You can penalize no-calls/no-shows if stated in your company policies
- You can require sick time to be used in 1-hour increments
- You can cap unused carryover at 72 hours
Please note that we haven’t yet seen the final law, so we’re sharing what’s currently being reported.
Beneficial Owner Information (BOI) Reporting Update
The BOI Report requirement is back in effect, with several recent developments:
- The Supreme Court has not determined it to be unconstitutional
- FinCEN has announced a new deadline of March 15
- FinCEN has indicated they might rework the rules to focus only on “risky businesses”
- The House of Representatives passed a bill that would delay the deadline to January 1, 2026
Despite these shifting developments, we’re recommending that all clients complete their BOI reporting before the March 15 deadline, even though requirements may change again.
We’ll continue to monitor these situations closely and provide updates as more information becomes available. If you have questions about how these changes affect your business, please reach out to us directly.