The Michigan Supreme Court reinstated both the Earned Sick Time Leave Act (ESTA) and the Improved Workforce Opportunity Wage Act (IWOWA). The Mothering Justice v. Attorney General decision will have significant and ongoing implications for all Michigan employers starting February 21, 2025.
This decision follows a prolonged legal battle that began when the Michigan Court of Claims ruled in 2022 that the Michigan Legislature acted unconstitutionally by adopting and amending both the ESTA and the IWOWA in the same legislative session in 2018. The Michigan Supreme Court took up the case after the Michigan Court of Appeals reversed the Court of Claims’ decision in 2023, finding the legislature’s ‘adopt-and-amend’ strategy constitutional.
The Michigan Supreme Court reversed the Court of Appeals’ decision, ruling that the Michigan Constitution prohibits the legislature from adopting an initiative petition and then amending it within the same legislative session. Consequently, the ESTA will be reinstated in its originally adopted form, with its provisions taking effect on February 21, 2025—205 days after the Mothering Justice opinion was issued. Similarly, the IWOWA will be reinstated, but its wage increases will commence in 2025 instead of 2019.
When the ESTA is reinstated in February 2025, it will replace the now-voided Paid Medical Leave Act (PMLA) and introduce several changes to employer paid-leave requirements. For instance, the ESTA will apply to all Michigan employers, unlike the PMLA, which applied only to those with 50 or more employees. Additionally, the ESTA mandates 72 hours of sick leave per year, compared to the 40 hours required by the PMLA. These are just a few of the numerous changes under the ESTA.
The reinstatement of the IWOWA will also significantly impact Michigan employers. The IWOWA will gradually increase the minimum wage in Michigan each year starting in February 2025, reflecting the steps that would have occurred beginning in 2019 if the ESTA had been implemented as originally adopted, with adjustments for inflation. Businesses will have 205 days from July 31, 2024, to comply with both acts.