With February 20, 2023, nearing and uncertainty of the appeal, consider preparing now for the Michigan Minimum Wage and Paid Sick Leave Law by taking the following three steps:

1. You may want to examine your leave policies and work with your employment counsel to ensure your policies comply with ESTA. Some, but not all, of the key items to look for to comply with ESTA are as follows:
   • The leave accrual rate is at least one hour of leave for every 30 hours worked (was 35 under PMLA);
   • The yearly accrual allowance is at least 72 hours (was 40 under PMLA);
   • The leave increment is the smaller of one hour or the smallest increment used by your payroll system; and
   • All employees, including FLSA exempt employees, are covered by the policy regardless of hours worked.
2. You should also check to see if you have a no-fault attendance policy, as it likely runs afoul of section 6(3) of ESTA, which states that “an employer’s absence control policy shall not treat earned sick time pursuant to [ESTA] as an absence that may lead to or result in retaliatory personnel action.”
3. Finally, you should be prepared to pay employees a minimum of $13.03 an hour by no later than February 19, 2023, in case the ruling is upheld. Under original IWOWA the minimum wage is set to increase in 2023 based on inflation unless the unemployment rate in Michigan is 8.5% for the year preceding the potential increase. If you rely on the tip credit to comply with IWOWA, you will need to pay 90% of the inflation-impacted minimum wage to tipped employees. If the original IWOWA is still in place in 2024, tipped employees will be entitled to the full 100% minimum wage

ASE will continue to monitor developments in this area and provide updates as warranted. If you have further questions or need sample policy templates, ASE members can contact the ASE HR Hotline 248-223-8057 or hrhotline@aseonline.org.

Source: Jackson Lewis