EverythingPeople This Week!

Published on Tuesday, December 4, 2018

Michigan Paid Time Off and Minimum Wage Laws in Process of Amendment

Author: Michael Burns

The Michigan Legislature wasted no time addressing the amendment of the expensive and poorly constructed Minimum Wage and Earned Sick Time laws passed earlier this year. Last evening the State House of Representatives followed the Senate’s passing of both laws and sent them to the Governor's desk for signature.

Almost immediately upon return from the Thanksgiving recess bills were introduced to correct the two laws that would dramatically increase the state’s minimum wage and require virtually all Michigan employers to provide what some would say is a disproportionate amount of paid time off.  Michigan’s Earned Sick Time law would have exceeded the rest of the nation, including California’s generous paid time off law. 

The Minimum wage law passed in July would have taken the Michigan minimum wage from its current $9.25/hr. rate to $12/hr. by 1/1/2022. It would have also increased the tipped employee minimum wage for the current 38% of the standard minimum wage to 100% of minimum wage by 1/1/2024. 

Senate Bill 1171 introduced on November 8th modifies the minimum wage law extending the scheduled annual increases to the maximum of $12.00/hr. out to 2030.  

EPTW readers know that this law and the Paid Time Off law were slated to go to the general election vote in November. Rather than seeing two ill-conceived and expensive pieces of populist legislation get  voted on and possibly implemented as is, the GOP-led Michigan Legislature decided to pass the laws in an act to ensure easier amendment once the election was over.

The Earned Sick Time law currently requires almost all Michigan employers with one or more employees to provide paid sick time for employee and family health needs every year.  It also included coverage in the case of domestic violence and sexual assault circumstances. For very small employers (1 -9 employees) this required providing up to 40 hours (one week) of guaranteed paid time off. For employers with just 10 (or more) employees they would have been required to provide up to 72 hrs. or 9 paid days per year in the event of their own illness or the illness of family members. 

The amendment bill (Senate Bill 1175) as passed last week and sent to the Michigan House of Representative and now passed by both houses, moderates the cost of this law considerably. First and foremost, it is amended to only apply to employers with 50 or more employees and after 90 days of employment. This change gives small employers reprieve from the original law’s expensive and burdensome administrative costs. Second, it cuts down the amount of paid leave to one hour for every 35 hours worked up to a total of 40 hours per benefit year. Covered employers will be able to integrate or coordinate existing paid time off benefits (vacation, sick, or personal time) that meet this law’s paid time off benefit requirements. 

ASE surveys show that most employers with over 50 employees already provide some form of paid time off benefits that could be adapted to meet the law’s requirements and avoid additional direct personnel costs.    

If signed by the Governor a legal challenge may ensue challenging the amendment process. Proponents of the ballot initiative have alleged that passing and then amending the original laws in a lame duck session may be unconstitutional. They are pointing to a 1964 Attorney General Opinion Letter that states this, but it is not considered binding. Opponents and GOP supporters of the amended laws believe this process is legal and cite subsequent Attorney General opinions. If a significant legal issue is recognized by a lower court, a stay on implementation of the laws may be granted by a court until the issue is ultimately resolved by no less than the Michigan Supreme Court. This would put a hold on both the original laws as passed and the amended laws that are expected to be passed shortly. 

Last but not least, Gongwer reports that advocates of the original Paid Time Off law plan to reintroduce the more extensive and expensive bill onto the 2020 general election ballot. 

ASE is in the process of planning Hot Button Briefings that will explain the new Michigan laws as early as next week. Interested ASE members should watch for a meeting notice. 

Sources: CCH HR Answers Now Michigan Senate passes legislation to scale back on new minimum wage and paid sick leave laws — STATE LAW,(Nov. 30, 2018) Gongwer News Paid Sick Time Advocates Prepare 2020 Ballot Proposal (11/29/2018)


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