Time to Update: Michigan’s 2025 Employment Law Changes Require New Handbooks and Record‑Keeping Practices
Michigan employers have now passed key compliance deadlines and must ensure that employee handbooks, policies, and documentation practices are fully aligned with the latest Michigan employment law changes, especially under the Michigan Earned Sick Time Act (ESTA) and updated Michigan minimum‑wage rules. These revisions are not optional; they’re essential for ongoing compliance and risk management.
Key Developments
1. Earned Sick Time Act: What’s in Effect Now
As of February 21, 2025, nearly all Michigan employers are covered under the reinstated Earned Sick Time Act. Under this law, employees accrue one hour of paid sick time for every 30 hours worked. Large employers (those with 10 or more employees) must provide up to 72 hours of paid sick time each year, while small employers (fewer than 10 employees) are required to provide up to 40 hours of paid and 32 hours of unpaid leave.
Employees may use earned sick time for their own health needs, to care for family members, for preventative care, or for issues related to domestic violence or sexual assault. Employers may require reasonable notice before absences, but documentation can only be requested for absences longer than three consecutive days. Existing PTO, vacation, and sick-leave policies should be reviewed to ensure compliance with ESTA’s accrual and usage standards. Employers may consolidate policies into a general PTO bank, as long as the total leave provided meets or exceeds ESTA’s requirements.
2. Updated Record-Keeping and Documentation Requirements
The new Michigan law increases the emphasis on accurate and transparent documentation. Employers must now track each employee’s hours worked, sick time accrued, and sick time used, and retain these records for at least three years. Additionally, employers must make policy details and leave summaries available to employees upon request.
Failure to maintain or produce these records could expose an employer to fines or civil penalties if a complaint is filed with the Michigan Department of Labor and Economic Opportunity. To avoid compliance issues, businesses should review their payroll systems, ensure consistent reporting, and confirm that all policies are properly documented and accessible.
3. Handbook and Policy Review Checklist
Now that all major provisions of Michigan’s new employment laws are in effect, employers should perform a comprehensive review of their internal policies. This includes updating employee handbooks to reflect the ESTA and Michigan minimum-wage changes, revising attendance and call-in procedures, and ensuring disciplinary processes align with the law.
New-hire packets should include updated rights notices and summaries of Michigan’s sick-leave requirements. Managers and supervisors should be trained on documentation standards, approval processes, and anti-retaliation rules. Payroll and HR systems should also be evaluated to confirm that accrual, carryover, and usage tracking are automated and auditable.
4. Michigan Minimum-Wage and Tipped-Wage Changes
Michigan’s minimum-wage rates continue to rise under the updated schedule. The regular state minimum wage is $12.48 per hour as of February 21, 2025, increasing to $13.73 per hour on January 1, 2026, and $15.00 per hour on January 1, 2027.
For tipped employees, Michigan law requires a minimum of 38% of the state minimum wage in 2025, with gradual increases to 50% by 2031. Employers must ensure that tipped employees’ total earnings (base wage plus tips) meet or exceed the applicable Michigan minimum wage.
5. Why Compliance Matters
Full compliance with Michigan’s updated labor laws is now expected. Proactive policy updates and consistent documentation protect employers from penalties while fostering a fair and transparent workplace. Accurate record-keeping, clear communication, and well-trained supervisors also reduce the likelihood of disputes and strengthen employee trust.
Beyond avoiding fines, compliance ensures operational consistency, builds credibility, and promotes a healthier company culture: one where both employees and employers understand their rights and responsibilities.
Recommended Actions
Employers should review employee handbooks, policies, and record-keeping practices to ensure compliance with Michigan’s updated labor laws, including the Earned Sick Time Act and minimum-wage requirements. Train managers on documentation, approval processes, and anti-retaliation rules, and confirm payroll systems accurately track accrual, carryover, and usage.
Provide employees with updated policy summaries and new-hire materials so rights and responsibilities are clear.
At Daudi & Kroll, we help Michigan employers navigate these changes with confidence. For guidance or a consultation, call us at (734) 351-5578.
Adil Daudi, Partner at Daudi & Kroll, P.C., serves as a trusted advisor specializing in employment law and complex corporate transactions. His expertise includes structuring and negotiating buy/sell agreements, real estate transactions, corporate restructuring strategies and providing guidance on employment law compliance. Adil also provides strategic counsel on estate planning, Shariah-compliant estate solutions, and corporate formation. He can be contacted for any questions related to this article or other areas of law at [email protected] or (734) 351-5578.
Disclaimer: This article is intended to provide general information and does not constitute legal advice. Please consult with an attorney for advice regarding your specific situation.
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