MI Minimum Wage, Tipped Wage, Paid Sick Time Changes: What To Know

MICHIGAN — Michigan minimum wage workers just got an 18 percent pay raise Friday.

The increase pushes the state's minimum wage to $12.48 an hour, making it the second increase this year after it jumped 23 cents to $10.56 an hour earlier this year.

The state's tipped wage also jumped to $5.99 or 48 percent of minimum wage an hour Friday.

Additionally, businesses with over 10 employees will have to provide up to 72 hours of earned paid sick leave annually, while small businesses with less than 10 workers would have to offer up to 40 hours annually.

Those pay raises and sick leave changes are thanks to a Michigan Supreme Court ruling last year that restored the Wage Act, which was originally approved to appear on the ballot in 2018. But before it could reach voters, Republican-led lawmakers adopted it and later watered-down the proposal, violating the state's constitution.

Without action from the Legislature, Michigan's minimum wage would gradually increase to $15 an hour by 2028 and the state's tipped wage would reach 100 percent of the minimum wage by 2030.

After scrambling for weeks, Michigan lawmakers reached an agreement on a bipartisan bill that will keep the state’s tipped wage credit, speed up minimum wage increases and scale-back paid sick leave.

The bills head to Gov. Gretchen Whitmer's desk for final approval. If she signs them, they will take immediate effect.

Minimum Wage/Tipped Wage

Minimum wage will stay at $12.48 an hour for the rest of 2025, and then jump to $13.73 an hour in 2026 before reaching $15 an hour in 2027, a year sooner than current law.

The new bills call for the tipped wage to stay at $4.01 an hour for 2025, and then gradually increase to 50 percent of the minimum hourly wage over the next six years.

Some restaurants across Michigan warned drastic increases to tipped workers would force changes and could ultimately hurt servers in the industry.

Paid Sick Leave

The bipartisan bills require small businesses "10 or fewer employees" to provide 40 hours of paid sick time, while larger employers must pay up to 72 hours of paid sick leave annually.

The new requirements would go into effect immediately for large employers, while small employers would have until Oct. 1, 2025 to implement the law.

New businesses would have a three-year grace period.