Advocacy News – June 22, 2023
The Michigan Supreme Court agreed Wednesday to hear an appeal in a case that could lead to significant changes in the state’s minimum wage and paid sick leave laws.
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 its 2018 use of what’s commonly referred to as the “adopt-and-amend strategy” to address two ballot proposals. One would have increased the minimum wage to $13 per hour by 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, forcing nearly every business across the state to make significant changes to their paid time off policies (PTO) and procedures.
What led up to this?
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 of 2023, ruling that “[b]ecause the trial court’s conclusions are not supported by either the text or intent of [the constitution]”.
The fate of these laws now rests with the MSC. The MI Chamber, a member of the Small Business for a Better Michigan Coalition, supports the adopt and amend strategy through this ongoing litigation. We support 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.”
Briefs are due to the MSC by early October with oral arguments to follow, but a timeline for a decision by the MSC remains unknown. The MSC’s order granting leave can be found here. The MI Chamber fully expects to weigh in on this matter through submission of an Amicus Brief with the Small Business for a Better Michigan Coalition.
Impact on Michigan Businesses
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.
Sick Time – 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. Michigan’s existing Paid Medical Leave Act only applies to businesses with 50 or more employees and contains more reasonable and workable provisions.
Minimum Wage – Under the ballot proposal language, Michigan’s minimum wage would jump to approximately $13 per hour and start moving towards an outright elimination of the tipped employee minimum wage. (The tipped minimum wage would jump to $11.75 per hour in 2023.) 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 38% of the full minimum wage ($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, please contact Wendy Block at email@example.com.