Michigan Senate Votes to Improve Paid Sick Leave, Minimum Wage Proposals

November 28, 2018

The Michigan Chamber has been voicing member concerns about the new mandatory paid sick leave and minimum wage laws since they were adopted by the Legislature in September. Thanks to your advocacy, the Michigan Senate voted to amend both proposals today, improving the policies to make them work for employers and employees alike. We’re hopeful the Michigan House will soon follow suit and send the bills to the Governor’s desk for his signature. 

Mandatory Paid Sick Leave

The legislation passed by the Michigan Senate today is sensible and pragmatic. It takes into account that over 70 percent of businesses voluntarily offer paid medical sick leave to their employees today. It adjusts the law so not to crush small businesses or take this mandate new and egregious extreme. The changes would:    

  • Exempt employers with 50 or fewer employees from the law
  • Establish accrual of paid sick leave as 1 hour for every 40 hours worked, up to 36 hours per year
  • Allow employees to carry over no more than 36 hours from year-to-year and limit use at 36 hours per year
  • Allow employees to use time in 1-hour increments, unless the employer has a different policy in place
  • Allow employers to front-load benefits to avoid having to carry time over from year-to-year
  • Make employees eligible after they have worked at least one year and 1250 hours for the same employer over the past 12 months
  • Exempt temps, independent contractors, employees who work in other states, highly-paid salaried employees and certain airline and railroad employees
  • Exempt employees who are subject to a private sector collective bargaining agreement
  • Allow employers who provide the requisite hours to keep the policies they have
  • Allow employers to require employees to comply with the employer’s notification, procedural and documentation requirements
  • Eliminate litigious provisions that tilt the balance in favor of employees
  • Ensure employees are aware of their rights and able to seek relief if they’ve been affected by a violation. 

If the Legislature fails to adopt this legislation, or the Governor refuses to sign it, the so-called “Earned Sick Time Act” will go into effect in March of 2019. The Michigan Chamber has numerous concerns  with the Act as written and adopted by the Legislature in September, but the combined effect is that all employees will have 72 hours per year of paid time off that they can use intermittently and without any practical restrictions. We applaud the Senate’s action and intent to find a balance between requiring that all employees have access to paid sick leave and making the law more reasonable and in-line with what the other 10 states with mandatory paid sick leave laws require.

Click here for a summary of the Act as adopted in September of 2018 and the changes adopted by the Senate on November 28, 2018.

Minimum Wage

The legislation passed by the Michigan Senate today would increase the minimum wage from $9.25 an hour to $12 per hour over 12 years. It would increase the wage for tipped employees from $3.52 to $4.00 over the same timeframe. In addition, the bill would repeal the provision in current law that puts annual increases on autopilot by tying the minimum wage to the rate of inflation. This proposal takes a pragmatic approach to increasing the minimum wage. As proposed, Michigan would still have the highest minimum wage rate in the Midwest and one of the highest minimum wage rates in the nation. If the Legislature fails to adopt this legislation, or the Governor refuses to sign it, Michigan’s minimum wage will increase from $9.25 to $10 beginning January 1, 2019, and to $12 per hour by January 1, 2022. The wage for tipped employees will also increase from $3.52 to 100 percent of the minimum wage by 2024.

Background

You might be wondering: How did we get here in the first place? The paid sick leave and minimum wage bills were adopted by the Michigan Legislature after ballot proposals on the two issues were certified for the November general election ballot. In adopting the proposals, lawmakers removed both proposals from the November general election ballot (where they were all but certain to pass) and retained their ability to amend the proposals with a simple majority vote prior to the acts going into effect in March of 2019. Had the issues gone to the ballot and been approved by voters, any changes would have required a three-fourths vote of the Legislature, a near impossible threshold. 

What’s Next

We will be providing regular updates on this issue on our Facebook and Twitter pages as well as our website.  Please contact Wendy Block with any questions at (517) 371-7678.