Early Christmas present for Michigan employers: Earned Sick Time Act overhauled and wage hike delayed
The Michigan legislature just gave employers an early Christmas present by scaling back on the terms of broadly-worded minimum wage and earned sick time laws that started out as citizen-initiated ballot proposals.
When the Michigan legislature adopted the minimum wage increase and earned sick time proposals in September 2018, the intent was to keep both provisions off the November ballot. By adopting the proposals “as is” before putting them to a popular vote, the legislature hoped to preserve the opportunity to amend the terms of both acts by simple majority votes during the post-election lame-duck session. In contrast, if the provisions had passed by popular vote in November, a 75 percent vote by the legislature would have been required to amend the provisions.
As originally passed in September, the acts would have raised the minimum wage to $12 by 2022 and would have given many full-time employees the opportunity to use up to 72 hours of paid sick time a year.
The Amended Terms
The amended bills, passed by the Michigan legislature on Dec. 4, significantly scale back on the timing of the original minimum wage increase and the scope of the earned sick time law.
The amended minimum wage bill gradually increases the state’s $9.25 minimum wage to $12.05 an hour by 2030 as opposed to $12 by 2022. As a first step, the minimum wage would increase to $9.45 in 2019.
The legislature also took a machete to the Earned Sick Time Act. As originally passed in September, the broadly-worded law allowed for paid time off for sickness as well as a host of other reasons. The law, which encompassed employers with as few as 11 employees in the requirement to provide up to 72 hours of paid sick time annually, also included other provisions which would have made administration difficult for employers.
As amended, the sick time law now excludes employers with under 50 employees. In addition, under the amended law, employees working 35 hours per week can earn up to 40 hours of paid leave per year instead of the 72 hours in the original act. In terms of administering the law, the amended act now requires that employees comply with an employer’s “usual and customary notice, procedural, and documentation requirements for requesting leave.”
The Earned Sick Time Act includes many other provisions with which employers will want to familiarize themselves.
The two amendments will now go to Governor Snyder. If signed by the Governor, the new acts will be effective 91 days after adjournment of the 2018 legislative session, which will make them effective at the end of March 2019.
There will be Challenges
The amendments by the lame duck legislature are sure to face challenges. In a legal opinion issued on Monday, Dec. 4, outgoing Republican Attorney General Bill Schuette advised that the state constitution requires a 75 percent vote in both chambers to change voter-approved laws, but that it imposes no “express limitations” on amending citizen-initiated laws passed by the legislature.
Democratic legislators are, however, crying foul. They note that a 1964 opinion by a Democratic attorney general determined changes cannot be made in the same legislative session in which the law was passed. And, advocates for paid sick time have already promised another ballot initiative in 2020 to restore the original terms.
All of this means these “gifts” will likely come with some headaches for employers. McDonald Hopkins will monitor the progress of the amended legislation and provide updates along with advice for implementation.