LANSING, Mich.— Michigan Gov. Gretchen Whitmer signed into law Friday bills that will scale back planned jumps in the minimum wage for workers who receive tips and undo some looming regulations for businesses who now broadly have to provide workers with paid sick time.

The measures, which passed the state Legislature late Thursday night, were more than six years in the making and ultimately the result of a compromise between the Democrat-controlled state Senate and the Republican-led House.

They represented the first major act of the 2025-26 term and marked a response by lawmakers, from both sides of the aisle, to criticism from the restaurant industry and business groups to policies that were scheduled by a July 31 Michigan Supreme Court ruling to take effect Friday.

"This commonsense compromise was made possible by the Republicans and Democrats who worked together to forge a fair, bipartisan deal," Whitmer said in a statement. "I hope we can build on this momentum to keep passing commonsense, bipartisan legislation that makes a real difference in people’s lives.

"I’ll keep working with anyone to protect working families and make sure our economy is competitive.”

For months, Whitmer, a second-term Democrat, had provided little insight to the public about her thoughts on court-imposed standards that would have shifted the state's lower minimum wage for restaurant workers upward to the traditional minimum wage. Whitmer had been on an overseas trade mission at the beginning of week, and it's been unclear what her role has been in the deal that was crafted in Lansing in recent days.

Before Friday, restaurant owners had to pay their tipped workers $4.01 an hour if tips made up the rest of the difference with the $10.56 standard minimum wage.

Under the court-set plan, the tipped minimum wage, currently 38% of the standard, would have gradually moved to 100% of the standard minimum wage in 2030, with both expected to be more than $15 an hour. The restaurant industry and some lawmakers had contended the changes would have led to job losses and business closures.

Under the new bills, the tipped wage will gradually increase to 50% of the standard minimum wage in 2031.

Senate Majority Leader Winnie Brinks, a Democrat, told reporters Thursday night that she had been hearing worries from business owners for years.

"We've had relationships with great, and I will say, Democrats who own businesses that had been raising alarms about what this could potentially mean for their businesses," Brinks said.

In a 4-3 decision on July 31, the Michigan Supreme Court ruled that six years earlier in 2018, Republican lawmakers had unconstitutionally blocked two ballot proposals — one on earned sick time and one on the minimum wage.

GOP lawmakers who controlled the Legislature, at the time, adopted the proposals to keep them from going before voters and then changed them after Election Day to significantly weaken them and reduce the cost on businesses. The highest court determined the proposals should become law as initially written.

The Supreme Court set the effective date as Friday.

Some prominent Democrats and labor organizations had urged lawmakers to let the policies take effect as the court planned. United Auto Workers President Shawn Fain had said the Legislature shouldn't "undermine" the court ruling that "eliminates a subminimum wage."

In 2018, when Republicans kept the two initiatives off the ballot, Whitmer, then a candidate for governor, blasted the GOP lawmakers for "undermining the will of the people."

"Michiganders deserve a chance to decide on ballot proposals like@MIOneFairWage and paid sick leave, because no one who works full-time should be living in poverty," Whitmer tweeted on Sept. 5, 2018.

The following is a look at the new regulations facing employees and businesses across Michigan.

—Sick time standards

Employees across Michigan — regardless of the size of the business they work for — will generally be allowed to accrue paid sick time at a rate of one hour of compensated leave for every 30 hours they work.

For people who work at businesses with 10 or fewer employees, they'll be able to accrue and then use at least 40 hours, or about five days, of paid sick time in a year. The policy takes effect for them on Oct. 1.

For people at larger businesses, they'll be able to accrue and then use 72 hours of paid leave in a year, with that requirement taking effect immediately.

Large businesses will also have to allow an employee to carry over up to 72 hours of unused accrued paid earned sick time from year to year, and small businesses will have to allow employees to carry over up to 40 hours from one year to the next.

—Exceptions to leave requirements

There are number of exemptions in the new paid sick time law.

For example, workers have to wait 120 calendar days after starting their jobs before using accrued sick time. That provision is meant to carve out seasonal workers who might have a job at a tourist destination just for a few months over the summer.

Also, the law exempts young workers who are under the age of 18 years old and other workers who are allowed to set their own schedules and don't have a minimum number of hours to be on the clock.

The new law provides an exemption for businesses that offer general paid time off in amounts that are more generous than the sick leave accruals required: 72 hours a year for large businesses and 40 hours a year for small businesses.

Small new businesses don't have to comply with the accrual requirements for their first three years with employees.

Brian Calley, president of the Small Business Association of Michigan and a Republican former lieutenant governor, said the new law allows employers to provide more flexible leave benefits to employees and eliminates extraordinarily burdensome administrative requirements.

"The earned sick time act compromise legislation that passed Thursday night made significant improvements that will protect employees and ease the administrative burdens of the original law," Calley said.

—What can paid leave be used for?

The law specifically allows workers to use their paid sick time for a variety of reasons, including their own "mental or physical illness," injury, medical diagnosis or preventive medical care.

In addition, they can use the time to deal with a family member's health problems, for meetings at a child's school or place of care related "to the child's health or disability or the effects of domestic violence or sexual assault on the child," according to the law.

Victims of domestic violence or sexual assault can use their paid time for medical care, counseling for injuries, to obtain services from a victim services organization, to relocate or to obtain legal services.

—Notification requirements

In order to use paid sick time, employees can be required, under the law, to notify their bosses up to seven days before taking off if the reason is "foreseeable."

If the reason for not being at work is not foreseeable, employees can be required to provide notice "as soon as practicable" or in accordance with the company's own policy, the law says.

The employer's notice requirement must allow "the employee to provide notice after the employee is aware of the need for the earned sick time," the law says.

—The minimum wage

With the signing of the law Friday, Michigan’s standard minimum wage increases from $10.56 an hour to $12.48 an hour — an 18% raise. In the future, it will rise to $13.73 on Jan. 1, 2026, and then to $15 on Jan. 1, 2027.

The minimum wage schedule adopted by the Legislature Thursday gets the state to $15 an hour a year before the Supreme Court’s original implementation schedule.

The law also requires the state treasurer, starting in 2027, to adjust the minimum wage for inflation every October, unless the unemployment rate is above 8.5% the preceding year. Any inflation-adjusted minimum wage rate would take effect on Jan. 1 of the following year.

—Workers who receive tips

Michigan's lower tipped minimum wage rose Friday in part because the traditional minimum wage also is increasing. The tipped wage rate will remain at 38% of the minimum wage but, because the minimum wage is increasing, the tipped wage will jump 90 cents, from $3.84 an hour to $4.74 an hour.

The tipped wage rate will increase 2% on Feb. 21 each year for the next six years until it reaches 50% of the minimum wage in 2031. Under the Supreme Court-ordered schedule overridden by the new law, the tipped wage would have increased to 100% of the minimum wage by Feb. 21, 2030.

Employers will continue to be required under the new law to pay the difference if an employee is unable to make the minimum wage through tips.

—If there are violations

Employees who are not paid the full minimum wage or tipped wage can file a civil suit to recover the amount owed or file a claim with the Michigan Department of Labor and Economic Opportunity.

Employers under the new law who fail to pay the minimum wage are subject to a civil fine of up to $1,000. Employers who do not comply with the tipped wage changes can get slapped with a civil fine of up $2,500.

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