As the February 21st implementation date set by the Michigan Supreme Court (MSC) for minimum wage and the Earned Sick Time Act (ESTA) quickly approaches, a bipartisan deal was struck on minimum wage while discussions on ESTA are ongoing.

After months of requests from constituents and the business community in 2024, the Democrat majorities refused to take action on making needed changes to the damaging laws put in place by the MSC. When Speaker Matt Hall and House Republicans took control of the Chamber in 2025, they immediately had hearings and voted on House Bill 4001 (tipped wage) and House Bill 4002 (ESTA), which passed with bipartisan support on January 23, 2025.

At the beginning of February, Senate Democrats, who control the majority in that chamber, finally began to engage in negotiations. Despite enormous opposition from unions and out of state progressive groups, last night, the first big step was taken to make these laws more manageable with the Michigan Senate passing a bipartisan deal on minimum wage in order to lessen the ongoing impact of minimum wage increases and save the tipped wage for restaurant servers.

The tipped wage will be increased from 38% to 50% over 5 years and stay there. The minimum wage will be increased to $15 by 2027. Currently, the minimum wage is set to increase to the Urban Consumer Price Index (CPI). The law was changed to increase by the Midwest CPI, which is traditionally a lower percentage, lessening the impact of future increases. Finally, the bill is tie-barred to HB 4002 which will make changes to the Earned Sick Time Act. This means, if there is no agreement/compromise on ESTA, this bill will be null and void. (see chart below to see the comparison)

Negotiations on ESTA continue as House Republicans continue to fight for a small business exemption, but those could take us up to February 21, 2025. At this point, NFIB is recommending that all members plan to comply with the law as written and we will keep you posted on any changes. (Find posting requirements for ESTA HERE)

It is important to note that any legislation will not contain all the changes advocated for or supported by NFIB due to the nature of divided government. However, we believe some of these commonsense changes will lessen the impact of the laws set to take effect next week. NFIB will continue to fight for changes in the law on behalf of small businesses in this session and beyond. Please reach out to Michigan State Director Amanda Fisher with any questions.