Michigan Legislature Amends State Minimum Wage and Paid Sick Leave Laws

On December 14, 2018, Governor Snyder signed two bills that significantly weaken previously-enacted legislation regarding minimum wage and paid sick leave.

In September 2018, the Michigan Legislature passed the minimum wage and paid sick leave laws in a peremptory effort to keep the issue off the November ballot. By enacting the minimum wage and paid sick leave laws directly, the Michigan Legislature both removed the legislation from the November ballot and retained the ability to amend the proposals with a simple majority vote.

During the lame-duck session, the Republican-controlled Michigan Legislature revised the minimum wage and paid sick leave laws.

The Improved Workforce Opportunity Act

Public Act 368 of 2018 (“PA 368”) amends the Improved Workforce Opportunity Act. Under PA 368, Michigan’s minimum wage will increase to $9.45, effective January 1, 2019. PA 368 will also increase the minimum wage to $12.05 by 2030, slowing the previously enacted increase to $12.00 by 2022. This delay will result in an annual increase of $0.23 to the minimum wage.

As it relates to tipped employees, the initial legislation would have increased their wages from 38% of minimum wage to general minimum wages by 2024. Nevertheless, PA 368 keeps tipped employees’ minimum hourly wage at 38% of the general minimum wage. The minimum wage for tipped employees will increase to $4.00 by 2030.

PA 368 also eliminates automatic, annual increases, beginning in October 2022, to the minimum wage based upon the CPI.

The Paid Medical Leave Act

Public Act 369 of 2018 (“PA 369”) amends the previously enacted “Earned Sick Time Act” and retitles it to the “Paid Medical Leave Act.”

PA 369 applies only to employers with 50 or more employees. These employers are required to provide 40 hours of paid medical leave annually to eligible employees; employees who are exempt under the FLSA, and certain part-time employees, are not eligible for paid medical leave. If an employer provides all 40 hours of paid medical leave to an employee at the beginning of the year, it can prevent employees from carrying over any unused paid medical leave to another year.

An employee using the paid sick leave time pursuant to PA 369 is required to comply with his/her employer’s usual and customary call-in procedures. An employer may discipline or discharge an employee who fails to comply with the employer’s usual and customary notice requirements for requesting leave. Paid sick leave can be taken in one-hour increments unless the employer has a different increment written policy.

If an employer already provides at least 40 hours of paid leave to an eligible employee each year, the employer is presumed to be in compliance with PA 369. The statute defines “paid leave” as including, but not limited to, paid vacation days, paid personal days, and paid time off.

An employer is required to display a poster, in a conspicuous and accessible place, that contains information about the amount of paid medical leave required for eligible employees and the terms for which it could be used.

The revised minimum wage and paid sick leave laws will go into effect late March 2019, depending upon when the current legislative session ends. To find out more about how the revised minimum wage and paid sick leave laws may impact your workplace and policies, contact a Keller Thoma attorney.

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