Michigan Legislature passes last-minute amendments to IWOWA and ESTA

April 2025 employment law letter

Authors:

Mackenzie Clark, Bodman PLC

Michigan’s Improved Workforce Opportunity Wage Act (IWOWA) and Earned Sick Time Act (ESTA) became effective February 21, 2025. However, last-minute bills—passed just before midnight on February 20—substantively amended both the IWOWA and the ESTA. Governor Gretchen Whitmer signed both amendments into law.

IWOWA

Effective now, the minimum wage in Michigan is $12.48.

Senate Bill 8 amends the IWOWA to have the tipped wage credit slowly increase from 38% of the minimum wage to 50% of the minimum wage in 2031.

The overall minimum wage will increase slightly faster than the current path for the years 2025, 2026, and 2027, and then be set to inflation.

ESTA

Shortly before midnight on February 20, the Michigan Legislature passed House Bill 4002, which amends the ESTA. The amendment went into effect at 12:02 am on February 21. The following are the key changes:

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