Michigan Minimum Wage, Paid Sick Leave Laws Rise From The Dead
Employers should prepare for more employee-friendly minimum wage and paid sick leave laws
Posted on 07-28-2022, Read Time: 5 Min
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The Michigan Court of Claims has struck down the state's current minimum wage law, known as the Improved Workforce Opportunity Wage Act, and its paid sick leave law, known as the Paid Medical Leave Act.
In their place, the court restored earlier versions of the laws passed in 2018, which are significantly more beneficial to employees.
It is unclear whether employers must immediately comply with the 2018 laws - and if so, whether they must do so retroactive to the court's ruling on July 19, 2022, or to their passage on September 5, 2018.
When asked these questions by XpertHR, the Michigan Department of Labor and Economic Opportunity would only say, "The Department is committed to making sure that workers and families have access to the pay and benefits they deserve, and we are reviewing the judge's decision to determine next steps and ensure the state is in compliance with the law."
In a statement, the Michigan Chamber of Commerce said, "We are incredibly concerned about the crippling effect this ruling could have on Michigan employers and employees alike. While we are still sorting through the details, we are stunned by this determination and its many varied implications. The talent shortage has employers already paying historic wages and benefits - all while facing rising inflation and supply chain chaos - just to keep the doors open. ... We remain hopeful the Court of Claims decision ultimately will be overturned."
Background
Michigan is one of several states that allow voters to initiate legislation via petitions.
In 2018, a coalition of advocacy groups gathered signatures and successfully petitioned to add initiatives to raise Michigan's minimum wage and require employers to offer paid sick leave.
At this point, the state legislature had three options:
● Adopt the proposals as is, without change;
● Reject the proposals, meaning they would then be placed on the fall ballot and could either be accepted or rejected by voters (and, if adopted by voters, the legislation could then have been amended only with a three-quarters majority in the legislature); or
● Propose an alternative version for voters to also consider.
The legislature chose option one and adopted the proposals as is. However, later that session, the legislature passed amendments that watered down the original versions.
In 2018, a coalition of advocacy groups gathered signatures and successfully petitioned to add initiatives to raise Michigan's minimum wage and require employers to offer paid sick leave.
At this point, the state legislature had three options:
● Adopt the proposals as is, without change;
● Reject the proposals, meaning they would then be placed on the fall ballot and could either be accepted or rejected by voters (and, if adopted by voters, the legislation could then have been amended only with a three-quarters majority in the legislature); or
● Propose an alternative version for voters to also consider.
The legislature chose option one and adopted the proposals as is. However, later that session, the legislature passed amendments that watered down the original versions.
Back to the Future
The changes were "substantial," according to the court. For instance, the Improved Workforce Opportunity Wage Act was amended to:
● Reduce the scheduled increases in the minimum wage;
● Repeal annual inflation adjustments in later years; and
● Restore the tip credit, which was to have been phased out under the original version.
The table below shows the two versions side by side.
The amendments to the Paid Medical Leave Act (which originally was called the Earned Sick Time Act) also were substantial. Among other things, they:
● Exempted employers with fewer than 50 employees;
● Lowered the minimum number of hours that could be used in a year; and
● Repealed retaliation protections.
By making such significant changes after adopting the original versions, the legislature "effectively thwarted the intent of the People and denied them the opportunity to vote on whether they preferred the voter-initiated proposal or the Legislature's suggested modifications," the court held.
For this reason, the court held that the amended versions are void and the original laws are once again in effect.
This article first appeared here.
● Reduce the scheduled increases in the minimum wage;
● Repeal annual inflation adjustments in later years; and
● Restore the tip credit, which was to have been phased out under the original version.
The table below shows the two versions side by side.
|
|
Minimum Wage | Minimum Direct Cash Wage for Tipped Employees | Maximum Tip Credit | |||
| Year | Original | Amended | Original | Amended | Original | Amended |
|
2018 |
$9.25 |
$9.25 |
$3.52 |
$3.75 |
$5.73 |
$5.50 |
| 2019 |
$10.00 |
$9.45 |
$4.80 |
$3.75 |
$5.20 |
$5.70 |
| 2020 |
$10.65 |
$9.651 |
$6.39 |
$3.75 |
$4.26 |
$5.90 |
| 2021 |
$11.35 |
$9.65 |
$7.95 |
$3.75 |
$3.40 |
$5.90 |
| 2022 |
$12.00 |
$9.87 |
$9.60 |
$3.75 |
$2.40 |
$6.12 |
| 2023 |
TBD2 |
$10.10 |
TBD3 |
$3.75 |
TBD |
$6.26 |
| 2024 |
TBD2 |
$10.33 |
TBD3 |
$3.75 |
N/A |
$6.40 |
| 2025 |
TBD2 |
$10.56 |
TBD3 |
$3.75 |
N/A |
$6.55 |
| 2026 |
TBD2 |
$10.80 |
TBD3 |
$3.75 |
N/A |
$6.70 |
| 2027 |
TBD2 |
$11.04 |
TBD3 |
$3.75 |
N/A |
$6.84 |
| 2028 |
TBD2 |
$11.29 |
TBD3 |
$3.75 |
N/A |
$7.00 |
| 2029 |
TBD2 |
$11.54 |
TBD3 |
$3.75 |
N/A |
$7.15 |
| 2030 |
TBD2 |
$11.79 |
TBD3 |
$3.75 |
N/A |
$7.31 |
| 2031 |
TBD2 |
$12.05 |
TBD3 |
$3.75 |
N/A |
$7.47 |
|
1. Michigan's minimum wage originally was scheduled to increase to $9.87 per hour effective January 1, 2021, but this increase and subsequent increases were delayed by a year under a provision pausing scheduling increases when unemployment exceeds 8.5%. |
||||||
The amendments to the Paid Medical Leave Act (which originally was called the Earned Sick Time Act) also were substantial. Among other things, they:
● Exempted employers with fewer than 50 employees;
● Lowered the minimum number of hours that could be used in a year; and
● Repealed retaliation protections.
|
|
Earned Sick Time Act (Original) | Paid Medical Leave Act (Amended) |
| Employer Coverage | One or more employee | 50 or more employees |
| Employee Coverage | Almost all employees, except federal government workers | Only individuals for whom the employer must withhold federal income tax; excludes employees who work fewer than 25 hours per week, employees who work 25 weeks or fewer per year, independent contractors and others |
| Accrual | One hour of paid leave for every 30 hours worked, up to 72 hours of paid time | One hour of paid leave for every 35 hours worked, up to 40 hours of paid time |
| Frontloading | No frontloading option | An employer may "frontload" leave time at the start of a calendar year as an alternative to accrual |
By making such significant changes after adopting the original versions, the legislature "effectively thwarted the intent of the People and denied them the opportunity to vote on whether they preferred the voter-initiated proposal or the Legislature's suggested modifications," the court held.
For this reason, the court held that the amended versions are void and the original laws are once again in effect.
This article first appeared here.
Author Bio
 |
Michael Cardman is Senior Legal Editor at XpertHR. Michael has more than 20 years of experience in publishing and has specialized in employment law for more than 15 years. As a member of XpertHR's editorial team, he focuses on wage and hour compliance, including minimum wage, overtime, employee classification, hours worked, independent contractors and child labor. Visit www.xperthr.com Connect Michael Cardman |
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