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Earned Sick Time Act and Improved Workforce Opportunity Wage Act

ESTA/IWOWA Updates

August 2024 Quick Reference Guide 

 

The Alliance participated in a webinar for UP Economic Developers by Varnum, LLP regarding the changes coming to small businesses as it pertains to the Earned Sick Time Act (ESTA) and Improved Workforce Opportunity Wage Act (IWOWA) laws.  

The information below is a summary of the presentation by Stephanie Setterington of Varnum, LLP.  

This should not be used as legal advice or in place of working with your attorney.  

The Alliance is available to help businesses connect with attorneys and CPAs to help ensure compliance is met by the February 21, 2025, deadline. 

 

Background 

In 2018, the Earned Sick Time Act and Improved Workforce Opportunity Wage Act were citizen-initiated ballot initiatives that voters approved in the statewide election. The Legislature adopted the measures and immediately voted to amend them. Paid Medical Leave Act (PMLA) and the 2019 Minimum Wage Act were the result.  

On July 31, 2024, the Michigan Supreme Court ruled the Legislature violated the Michigan Constitution when amending the ballot initiatives and reinstated the original ballot proposed wording and timelines.  

 

What does this mean for Small Businesses?  

PMLA will be replaced by ESTA by February 21, 2025. All businesses must be compliant with written compliance policies by that time.  

The 2019 Minimum Wage Act will be replaced by IWOWA by February 21, 2025. All businesses must be compliant with written compliance policies by that time. IWOWA will have an altered schedule of wage increases and tip credit payouts due to the timing of the ruling. 

 

ESTA: What are the changes from PMLA?  

ESTA defines a small business as having fewer than 10 individuals working for compensation in a week. This includes workers engaged as contractors or through a staffing agency, part-time, full-time, temporary, and excludes any business that had 10 or more employees on payroll for at least 20 weeks in the current or preceding calendar year. 

PMLA 

  • Covered only MI employers with 50 or more employees 
  • Covered only nonexempt employees in MI working more than 25 hours per week and contains several exceptions 
  • Defined by whether the worker is on the employer’s payroll 
  • Requires employers to accrue or grant up to 40 hours of earned sick time/year 
  • Accrual rate: 1 hour for every 35 hours worked – capped at 1 hour per week 
  • Carryover of up to 40 unused hours 
  • Must allow employees to use up to 40 hours paid sick time per year. 
  

ESTA 

  • Covers all MI employers except federal government 
  • Covers all employees working in MI without regard to classification or type, or hours (seasonal, exempt, etc.) 
  • Defined by “service to employer” in “business of employer” 
  • Requires employers to accrue up to 72 hours of earned sick time per year 
  • Accrual rate: 1 hour for every 30 hours worked – no cap per week 
  • Carryover of all hours required, no cap 
  • Must allow employee to use up to 72 hours of paid sick time per year 
  • “Small” businesses with fewer than 10 employees* can provide only 40 paid hours paid but must allow up to the additional 32 unpaid. 

 

 

ETSA Questions 

It is expected that the State of Michigan Licensing and Regulatory Affairs (LARA) will be providing more guidance in the coming weeks.  

Some areas of ambiguities include:  

  • Who counts as an employee? 
  • When considering family members, what are the limits of closely associated? 
  • Can an existing policy satisfy ESTA? 
  • How will PMLA time be treated upon transition to ESTA?   

 

IWOWA: What are the changes from the 2019 Minimum Wage Act? 

Provisions in effect since 2019 

Scheduled Minimum Wage Increases 

  • March 2019: $9.45 
  • 2020: $9.65 
  • 2021: $9.87 
  • 2022: $9.87** 
  • 2023: $10.10 
  • 2024: $10.33 
  • Additional scheduled increases to achieve $12.05 by 2030 

 

Tip Credit Wage 

  • Tip credit wage will be 38% of state minimum wage 
  • 2024: $3.93 

 

 IWOWA Ballot 

Scheduled Minimum Wage increases 

  • 2019: $10.00 
  • 2020: $10.65 
  • 2021: $11.35 
  • 2022: $12.00 
  • Thereafter annual increases based on inflation calculated by CPI 

 

Tip Credit Wage 

  • 2019: 48% of state minimum wage 
  • 2020: 60% of state minimum wage 
  • 2021: 70% of state minimum wage 
  • 2022: 80% of state minimum wage 
  • 2023: 90% of state minimum wage 
  • 2024: 100% of state minimum wage 

 

IWOWA Modified Schedule 

To account for the passage of time and the original intent, the Michigan Supreme Court ordered the modified schedule to be:  

  • Minimum Wage 
  • February 21, 2025: $10.00 PLUS an inflation adjustment to be announced – anticipated to be approximately $12.50 overall. 
  • Annual adjustments for inflation thereafter. 
  • Tip Credit Wage 
  • February 21, 2025: 48% of state minimum wage. Scheduled increases each year thereafter. Full phaseout complete by 2029. 

 

IWOWA Questions 

Unknowns stemming from this ruling as it pertains to IWOWA include, a potential ripple effect on other wage rates; impacts to restaurant employers; and the overall economic impact. 

_____  

Information in the quick reference guide was provided by Varnum, LLP, and should not be interpreted as legal advice or in place of working with your attorney.  

For more information about Varum, LLP, visit www.varnumlaw.com. 

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Shift Next-Level Career Magazine 2024

2024 Skilled Trade Career Paths Magazine

The Dickinson County Talent & Education Taskforce is excited to release this year’s Next-Level Career Magazine! With the hope of reaching future professionals within and outside of Dickinson County, this magazine was designed for students, teachers, educators, and anyone interested in pursuing a career-oriented future.

Learn about the different career paths, programs, and value career and technical education bring as you scroll through this publication. The 2024 Next-Level Career Magazine will touch on programs from DIISD and Bay College Iron Mountain, as well as provide you with the knowledge of post-education professional opportunities and experiences from local students.

If you’re interested in learning more about Skilled Trade Career Paths, contact Mindy Meyers, Executive Director of the DAEDA.

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The Alliance celebrates graduates entering the skilled trades.

 

The Dickinson Area Economic Development Alliance announces a call for nominations to recognize local high school graduates pursuing skilled trades career paths upon graduation.

The Dickinson County area is home to many large companies in the manufacturing, construction, healthcare and technology sectors that offer meaningful careers in fields that align with Career and Technical Education paths available through the Dickinson-Iron Intermediate School District Tech Center and Bay College Iron Mountain campus.

“Skilled trades career paths offer access to in-demand careers with a smaller educational investment and often a high financial payoff,” said Mindy Meyers, executive director of The Alliance. “We want to celebrate these students as they enter the next phase of life contributing to the local economy’s success, either in the workforce or in a training program.”

Teachers, parents, counselors, and friends can nominate a high school senior for a chance to win a prize package that includes a $25 gift card to Step Ahead and swag from area businesses as well as recognition on social media.

To nominate a senior from Forest Park, Florence, Iron Mountain, Kingsford, Niagara, North Dickinson, Norway, or West Iron County, visit https://bit.ly/3TWmKTI. Nominations are accepted through April 17, 2024.

One random winner from each area high school will be selected from the entries received. Those who nominated the winners will be contacted by email on April 22, 2024.

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Dickinson Area Economic Development Alliance welcomes Mindy Meyers as its new executive director

Mindy Meyers Executive Director of the Dickinson Area Economic Development Alliance

Iron Mountain, Mich., (March 27, 2024) – The Dickinson Area Economic Development Alliance is pleased to announce its new executive director, Mindy Meyers.

“Mindy has demonstrated leadership in community development during her tenure as program director of the Iron Mountain Downtown Development Authority, paired with her knowledge of the local community and her enthusiasm for continued growth in the area, made her the ideal candidate,” remarked Tony Edlebeck, chair of The Alliance. “We are confident Mindy will work hard to continue the successful growth and development of the area as Lois passes the torch.”

“It has truly been a pleasure working with the community and businesses in the Dickinson area,” remarked Lois Ellis. “Together, we have accomplished so much, and I look forward to seeing the area continue to develop under Mindy’s leadership.”

The organization is committed to a smooth leadership transition. Ellis and Meyers have been working together over several weeks to successfully transfer the ongoing work of the Alliance task force groups and all active projects. The overlap period allows for time to introduce Meyers to the Alliance Investors and the existing network of resource partners. Our focus remains strong, and we plan to build upon the collaborative foundation of our organization as we move through this leadership transition.The Alliance executive director is the administrative officer of the organization and is responsible to the Board of Directors for a full range of activities, such as organizational structure and procedures, communications, budget and finance, program activities, and the creation and implementation of the organization’s strategic economic and community development plans.

About the Dickinson Area Economic Development Alliance
The Dickinson Area Economic Development Alliance (The Alliance) is the leader in stimulating economic development in the Dickinson County area of Michigan’s Upper Peninsula. The Alliance joins business, industry, education, government, and community organizations to grow the region’s economy by retaining, recruiting, and growing talent for our growing employer base as well as promoting business retention & expansion, government relations & advocacy, and infrastructure & housing development. Through marketing & branding efforts, The Alliance tells the unique story of a robust community in which to live and work. The Alliance is a 501c6 with 80% of its funding from private-sector employers. For more information about The Alliance, visit www.daeda.org.