Advocacy News – Aug. 27, 2024
Attorney General Dana Nessel (AG) is seeking clarification from the Michigan Supreme Court, asking for guidance on how to interpret its minimum wage ruling and implement new minimum wage and tipped wage rates.
What’s at issue: The Court’s decision lacks a clear start date for calculating inflation. As the AG explains in her motion for clarification, filed Aug. 21, this means “the State is left to make assumptions as to how to comply with this Court’s opinion.” The Department of Treasury believes there are at least five different options to determine the calculation. Without clarification from the Court, Treasury says it will implement Option 1, which “is an inflationary catch up…which accounts for inflation from January 2019 through June 2024 (the most recent data available on July 31, 2024), and uses the CPI-W index.”
Unless the Court says otherwise, Treasury will implement the following minimum wage schedule, with automatic inflationary increases beginning in 2029:
Other questions raised in the brief include:
- Whether the Court intended to exclude the 90% graduated increase for tipped wages, taking the tipped minimum wage from 80% to 100% between 2028 and 2029.
- The AG’s response: Without different direction from the Court, the State “will implement…the 90% graduated increase for tipped wages starting in 2029….”
- Whether the annual increases in the minimum wage need to be moved from Jan. 1 to Feb. 21 beyond the first year the ruling is in effect.
- The AG’s response: “Absent clarification, Treasury intends to implement this provision in accordance with the Wage Act, i.e., on January 1 for 2026.”
Why it matters: Businesses are still reeling from the Court’s monumental decision on paid sick leave and minimum wage and need to begin making plans for how they’ll comply and cover the added expenses. Given the impending Nov. 1 deadline to implement the Court’s remedial scheme, which will go into effect Feb. 21, the State is asking the Court to rule on the motion by Sept. 15.
The bottom line: The Michigan Chamber continues to push for legislation to soften the impact of the Court’s decision – both on the minimum wage and paid sick leave issues.
Go deeper: Read a summary of what we’ve been up to in regards to the minimum wage decision or read the AG’s motion.