Blog

Michigan Compliance Compass Blog #4: Michigan HR Compliance Updates

Publication date: December 11, 2024

 

As the snow starts to fall and the temperatures drop, employment law and HR compliance are doing the exact opposite—they’re heating up! The season of hot cocoa and holiday cheer brings with it a flurry of legislative changes and updates that every employer needs to know to stay on the “nice” list. 

From updated wage laws to new sick leave requirements, now’s the time to bundle up your compliance strategy and prepare for the year ahead. Don’t get caught out in the cold—keep reading for the key updates that will keep your workplace warm and worry-free this winter! 

Earned Sick Time Act (ESTA) Update: 

Starting February 21, 2025, Michigan employers will need to comply with the revamped Earned Sick Time Act (ESTA). You can learn about all of that from SBAM’s On Demand Webinar, Revised FAQs for Earned Sick Time Act

If you’re waiting and wishing that the whole thing will be reversed or struck down, it’s not looking good for that holiday miracle. Our attorneys are advising that you can wait until the New Year, but it’s better to start your preparations now. Need help navigating the details? Fill out our Michigan Compliance Questions form to let us know how we can help you. We’re here to support you every step of the way. 

FLSA salary threshold changes on hold… for now 

Does this feel like a rollercoaster, or is it just us? Here’s the quick timeline of what’s happened in 2024 with regard to the Fair Labor Standard Act salary threshold changes and what you should be thinking about next.  

  • On July 1, 2024, the salary threshold became $844 per week ($43,888 annualized). 
  • On January 1, 2025, the salary threshold for those administrative, executive and professional roles was set to increase to $1,128 per week ($58,656 annualized). We’ve all been planning for this change, which you can read more about here
  • On November 15, 2024, a Federal Judge in Texas ruled that the Department of Labor (DOL) was not within its authority to mandate nationwide salary threshold increases, making ruling a nationwide rule null and void. 
  • On November 26, 2024, the DOL filed a notice of appeal to strike down the Texas ruling, claiming they do have authority to enact salary threshold increases. 
  • Today… the rollercoaster continues. 

So… now what? Well, it’s anyone’s guess. The appeal could get traction, if expedited; but if not, it’s likely to happen on January 1, 2025. Time will tell on how the new Trump administration will handle this, but one could anticipate that it may be changed or dropped altogether. In the meantime, there’s no need to elevate those salary thresholds just yet. The November 15, 2024, ruling thus left in place minimum levels set under a 2019 DOL rule: $35,568 per year.  

Michigan’s Minimum Wage 

On January 1, 2025, Michigan’s minimum wage will increase to $10.56 per hour. The minimum base wage for tipped employees will be $4.01 per hour.  

Less than two months later, on February 21, 2025 (yup, same day that the ESTA goes into effect), the minimum wage will increase again, to $12.48 per hour. The minimum base wage for tipped employees will be $5.99 per hour. This change is due to a recent Michigan Supreme Court ruling that reinstates the original minimum wage and sick leave legislation that was proposed in 2018. 

But that’s not all. Michigan’s minimum wage and base rate for tipped employees are set to increase yearly through 2028. You can view the full increase schedule on the Labor and Economic Opportunity website

Proposed Changes to Michigan’s Unemployment System  

The Michigan Senate recently passed a handful of bills that would make numerous changes and updates to Michigan’s Unemployment Insurance Agency (UIA) including streamlining system processes and increasing benefits for unemployed workers. Now it goes to the House – as soon as this week.  

Employers are most closely monitoring are proposing two key aspects of these reforms: 1) the extension of unemployment benefits from 20 to 26 weeks and 2) the increase of maximum weekly benefits from $362 to $614 (funded by employers), with future increases tied to inflation. Employers who have concerns about these bills are encouraged to reach out to their House Representative.  

We’ll be watching this one closely too! 

Are we having fun yet? 

2024 might go down in history as one of the years with a lot of regulatory ups and downs. It’s hard to keep tabs on it all. Your CPG team is monitoring these compliance requirements and will keep you updated as things develop here as we round out the year. 

Have questions?

Contact us!