Advocacy News – April 20, 2023
The Michigan Chamber filed an Amicus Brief and other motions with the Michigan Supreme Court (MSC) this week addressing an ongoing challenge to the Legislature’s authority to adopt and subsequently amend (“adopt-and-amend”) ballot initiatives. The litigation could upturn the state’s paid sick leave and minimum wage laws and significantly increase costs and compliance obligations on employers.
The MSC is being asked by the plaintiffs, Mothering Justice et al, to reverse a January 2023 Court of Appeals (COA) decision supporting the Legislature and the powers vested to it under the Michigan Constitution.
The plaintiffs brought this issue to the courts after the Legislature used the adopt-and-amend strategy in 2018 to address two ballot proposals. One would have increased the minimum wage to $12 per hour in 2023 and increased tipped wages to the full minimum wage, and the other would have enacted one of most sweeping paid sick leave laws in the country, thereby forcing nearly every business across the state to make significant changes to their paid time off policies (PTO) and procedures.
A judge for the Court of Claims held in August of 2022 that the “adopt and amend” strategy was unconstitutional and ordered the amened versions of the paid sick leave and minimum wage laws, which have been in effect since March of 2019, void.
However, the COA issued a 3-0 decision reversing the lower court’s decision in January, ruling that “[b]ecause the trial court’s conclusions are not supported by either the text or intent of [the constitution] we reverse the Court of Claims’ and remand for entry of an order granting the state’s motion for summary disposition.”
The fate of these laws now rests with the MSC. The MI Chamber’s Amicus Brief, which was filed with others in the Small Business for a Better Michigan Coalition, defends the COA decision, which “made plain that the legislature clearly has the constitutional authority to amend initiated legislation it adopts in the same legislative session” and says the “COA decision should stand.”
It remains unclear whether the MSC will take this case and their timeline for issuing a decision, but your Michigan Chamber team will be closely monitoring the situation and keep members apprised.
If the MSC were to reverse the COA decision, Michigan law would revert to the ballot proposal language, which was never voted on by the people. Under the ballot proposal language, all employees (full-time, part-time, temporary, and independent contractors) would be entitled to receive and use one hour of paid medical leave for every 30 hours worked, up to 72 hours per year (Small businesses with less than 10 employees would be required to grant 40 hours paid leave, 32 hours unpaid.) It would require for this time to be separated from other PTO banks and places severe compliance burdens on employers, including those with paid leave policies currently in place. It limits the ability of employers to exercise notification procedures and require doctor’s notes and allows time to be used in as little as six-minute increments.
As it relates to the minimum wage rate, a reversal of the COA decision would increase Michigan’s minimum wage to approximately $13 per hour in 2023 and $11.75 for tipped employees. Under the law today, Michigan’s minimum wage rate is $10.10 per hour (and is increasingly annually until we reach $12). Employers using tipped employees must pay them at least $3.84 an hour and may take a “tip credit” of up to $6.26 an hour–so long as the employee makes at least $10.10 an hour with tips. If not, the employer must pay the difference.
For more information, view the full brief. Please contact Wendy Block with any questions at wblock@michamber.com.