Michigan small businesses fear impending minimum wage hike

After February 2025, every Michigan business must provide paid sick leave to employees — even teenagers who work a few shifts a week while taking classes.

Michigan small businesses are preparing for a minimum wage hike and a mandate to provide sick leave. The wide-ranging mandate applies to part-time, temporary and seasonal workers. Workers who are subject to overtime rules are included, as well as those who are exempt from them.

Many teenage workers will take advantage of the sick leave rule, Midland restaurant owner Tina Anganis told Michigan Capitol Confidential in a phone interview.

“Someone doesn’t have to show up to work for three consecutive days and you can’t fire them; they don’t have to call in,” said Anganis, who owns a Ya Ya’s chicken restaurant. “It’s setting a bad precedent for what kind of morals we want to set in the workplace.”

Under the new law, employees will accrue one hour of paid sick leave for every 30 hours worked. Employers are required to let workers use up to 72 hours of sick time per year.

The law requires employers with nine employees or fewer to provide 40 hours of sick time paid, with larger employers subject to the 72-hour requirement. All employers must allow their workers to carry over an unlimited amount of sick time from year to year.

The ruling will harm the restaurant industry, which has nearly 500,000 employees, Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association, told Michigan Capital Confidential in a statement.

“As our recent industry operations survey illustrated, 40% of full-service restaurants in Michigan are already unprofitable, meaning this decision is likely to force more than one in five of them to close permanently, eliminating up to 60,000 jobs along the way,” Winslow said.

Winslow called on the Michigan Legislature to pass a compromise law as soon as possible. “The future of Michigan's restaurant industry and the stability of Michigan’s overall economy hangs in the balance,” he said.

Inflation remains the top concern among respondents in an industry survey. About 93% of small businesses said they’re experiencing increased costs while others struggle to find workers, according to a recent survey from the Small Business Association of Michigan.

“Michigan’s smallest operators are expressing concern and reporting a loss of confidence, ahead of new regulations on them that will hit in just six months,” the association’s president and CEO, Brian Calley, said in a statement. “Half of those we talked to said they are already trying to reduce expenses to prepare for a possible recession. They simply will not be able to sustain further increased costs. The cliff is in sight now: in February, they’ll start to fall over it.”

The small business association says that 79% of Michigan small businesses already offer flexible paid time off.

The quarterly survey garners roughly 500 responses from many industries across the state. About 80% of respondents are small businesses with 50 employees or fewer.