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ESTA & IWOWA: The Final Countdown

Publication date: January 28, 2025

 

It’s a month of SUSPENSE! 

There are just 24 days before the Earned Sick Time Act (ESTA) and the Improved Workforce Opportunity Wage Act (IWOWA) take effect! These two pieces of legislation are driving a pile of changes for nearly all Michigan employers set to take effect on February 21, 2025. You can read more about them in our Compliance Compass blog series here. 

AND, just to keep the drama levels high, the Michigan House of Representatives has passed HB 4001and HB 4002, paving the way for potential changes to both ESTA and IWOWA! The bills now advance to the Senate for their consideration with less than 30 days before businesses across the state are set to implement the new rules, where they are expected to face some uphill opposition. 
 

What’s in the bills??  

House Bill 4001 addresses the tipped wage for servers, proposing Michigan employers maintain the tipped minimum wage at 38% and gradually increase the minimum wage to $15 per hour by 2028, with inflationary adjustments starting in 2029. 

House Bill 4002 proposes several key changes to the ESTA, such as allowing frontloading of the 72 hours of earned sick time, exceptions for temp and part-time employees, clarifying variable wage (i.e. commissioned) rules, limiting carry over to 72 hours and redefining small businesses as those with fewer than 50 employees. 


I’m on the edge of my seat…What’s next?? 

  • Watch & Wait: All eyes are now on the Michigan Senate to determine if these bills will advance. Anything could happen! 
  • But, Get Ready: Given the uncertainty of the legislative outcome, all the advice is that businesses must prepare for ESTA & IWOWA as currently written

At Cooper People Group, we will continue to monitor progress on these amendments, and we’ll keep you informed as we learn more. But if you’ve been waiting on the sidelines, you’d better get prepared. The bills are amendments, not cancellations. Doing nothing is not going to be an effective strategy. 

As always, we’re here to help! CPG’s ESTA taskforce has helped dozens and dozens of our clients to prepare for the changes, but time is running out. If you need support, don’t delay in signing up to get on our list!