Just one week ago, the blog below was published stating that businesses should prepare for the likely implementation of the original ballot initiative language relating to the Michigan Earned Sick Time and Michigan Minimum Wage Increase.
Well, hold your horses! Yesterday, the Michigan Appeals Court overturned the initial decision reimplementing these two acts effective February 19th.
What happens now? Nothing for the moment. There will likely be a ‘homestretch’ appeal to the Michigan Supreme Court, but until then, there will not be any change to the Paid Medical Leave Act or Michigan’s Improved Workforce Opportunity Wage Act of 2018 as enacted. Employers in compliance with the 2018 Acts do not need to make any changes.
Is this the finish line? Stay tuned! We’ll keep you posted on the latest.
Chances are you’ve heard about the Michigan Earned Sick Time Act and are thinking, “isn’t this already in effect?” Well, yes and no. Let’s start with a short history lesson to bring us up to where we are today.
In 2018, a petition drive was headed to successfully get both a minimum wage proposal and a provision for earned sick time on the ballot for the fall election. The legislature at that time decided to adopt the ballot proposals, making the ballot initiatives unnecessary. The initiatives were dropped and the Michigan Earned Sick Time Act and the minimum wage standard were adopted. Then, during the lame duck session after the election, the legislature significantly changed the acts by passing the Paid Medical Leave Act and Michigan’s Improved Workforce Opportunity Wage Act of 2018. Several groups filed a lawsuit challenging the constitutionality of those Acts arguing that the legislature usurped the rights of the people to implement a ballot initiative. The court agreed, struck down the two new acts and said that the ballot initiatives, as written, would go into effect on February 19, 2023.
What does this decision mean? If unchanged, the original ballot initiative language of the Michigan Earned Sick Time Act and Michigan Minimum Wage Increase Initiative increase will go into effect. Since the Michigan Attorney General has voiced support of the Court of Claims Judge Shapiro’s decision to reinstate the original ballot initiative language, the chance for legislative intervention under the Whitmer administration is highly doubtful. This case now rests with the three judge panel at the Michigan Court of Appeals. Attorneys have requested a decision by February 1st so that employers have time to react, but there is no guarantee that the court will respond by then.
What should employers be doing?
Our advice is review your policies to see if they are in compliance with the new requirements. Most larger organizations will find that they already are. If not, you should prepare a plan to implement policies bringing your organization into compliance with the original provisions of the Michigan Earned Sick Time Act and the revised minimum wage. You can then wait until at least February 1st before implementing those changes to your policy to be effective February 19th.
• Employees accrue one hour of paid sick time for every 30 hours worked.
• Organizations with more than 10 employees: Must provide the opportunity to earn at least 72 hours of paid sick leave annually.
• Organizations with fewer than 10 employees: Must provide the opportunity to earn at least 72 of hours of sick leave.
40 hours of it must be paid, the remaining 32 hours can be unpaid.
• Employers can limit employees from using paid sick time until after their 90th day of employment.
• Employers do not have to pay out unused paid leave balances upon the termination of employment.
• The new rate would be $13.03 per hour, up from the current $10.10 per hour.
• The rate for tipped workers would increase from $3.84 per hour to 90% of the full minimum wage, equaling $11.73 per hour.
While nothing is certain, the questions asked by the appeals court would suggest that they will uphold the decision of Judge Shapiro. We won’t know the outcome until at least February 1st and there may be an appeal to the Michigan Supreme Court following that. Our recommendation is to prepare for the changes now, but not to implement them, unless you want to, until there is a formal decision.
We’ll keep you posted on the latest decisions as they occur.
Meet Kevin Brozovich, energetic entrepreneur, people-focused team-builder and HR practitioner-turned consultant. For almost 10 years, Kevin was Founder and Chief People Officer of HRM Innovations, a Kalamazoo-based Human Resources consulting firm many would consider the top in the region. After pulling his hair out making daily decisions about running the business (does it matter where the coffee comes from?), Kevin joined forces with the Rose Street Advisors team so he could solely focus on what he loves most: working with clients.