On July 29, 2022, the Michigan Court of Claims issued a decision that voided the amended versions of the Michigan Improved Workforce Opportunity Wage Act (MCL 408.931 et seq.) and the Michigan Paid Medical Leave Act MCL (408.961 et seq). The court ruled that the 2018 amendments the state legislature made to the citizen initiatives for increased minimum wage and paid sick leave were unconstitutional. As a result, the laws as adopted by the citizen initiatives are technically in effect, but the citizen initiatives cannot be enforced yet, and the earliest employers will need to comply with an increased minimum wage and more generous sick leave requirements is February 20, 2023. The delayal is intended to give employers and the relevant state agencies time to accommodate the changes required by the ruling.
Some comparisons of the amended versions of these laws compare to the unamended versions include:
- An increase in the minimum wage from $9.67 to $12 per hour by January 1, 2022 and tie it to inflation each year thereafter.
- Raising the tipped wage from $3.75 to $9.60 per hour and phasing out the tip credit. In 2022, employers would need to provide tipped employees with a base pay of 80% of the state’s minimum wage. This would increase to 90% in 2023, and 100% in 2024.
- Requiring paid sick leave to be provided to all employees by all employers, not just those with 50 or more employees.
- A requirement that employees earn sick leave at a rate of 1 hour per 30 worked, instead of 1 per 35.
- A requirement that employees be able to use up to 40 hours of paid sick leave and 32 hours of unpaid sick leave per year if they work for an employer with 9 or fewer employees.
- A requirement that employees be able to use up to 72 hours of paid sick leave per year if they work for an employer with 10 or more employees.
- A prohibition on retaliation against employees for using sick leave.
Next Steps for Employers
Reverting to the unamended (citizens’) version of this legislation will create additional obligations for employers including increased minimum wages, plus expanded eligibility, accrual and use of paid sick leave, among other benefits. However, the issue continues to be litigated which could result in reinstating the citizens’ versions of these laws, the legislature’s versions, or some mixture thereof, so employers should hold off on adjusting any payroll practices, policies and procedures until further notice.
HR Works will continue to monitor this topic and provide updated information as it becomes available.