07 September 2018

Michigan Legislature Passes Laws Raising the Minimum Wage and Requiring Employers to Provide Paid Sick Leave

Late Wednesday afternoon, September 5, 2018, Michigan lawmakers passed two laws that will significantly impact Michigan employers. The first law raises the state’s minimum wage, and the second requires employers to provide their employees with paid sick leave.

Increased Minimum Wage

The new law raises the Michigan minimum wage from $9.25 per hour to $10 beginning January 1, 2019; $10.65 in 2020, $11.25 in 2021, and $12.00 in 2022. Starting in 2023, the minimum wage will be adjusted annually based on increases in the consumer price index.

Paid Sick Leave

The new “Earned Sick Time Act” requires the following:

  • Employees in Michigan will accrue at least one hour of paid sick time for every 30 hours worked;
  • Businesses with ten or more employees must provide at least 72 hours of paid sick time per year, while smaller employers are required to provide at least 40 hours of paid sick time; and
  • Employees who exhaust the annual minimums for paid time off are entitled to an additional 32 hours of unpaid earned sick time.

Employers must permit employees to use accrued paid sick time for a variety of reasons, including the employee’s health; the employee’s family member’s health; the employee or employee’s family member’s need for time to deal with domestic violence including time to relocate and attend court proceedings; and meetings at a child’s school related to the child’s health, disability, or effects of domestic violence or sexual assault.

Notably, companies with any paid leave provisions as good as, or better than, those required by the Act are not required to develop an additional sick leave policy. Thus, even paid leave provisions that are not directed at sick time (for example, a paid vacation policy) satisfy the requirements of this Act as long as employees can use that paid leave for the purposes provided in the Act.

The Act also contains provisions specifying when medical documentation may be required from employees, when an employer may require prior notice from an employee of the need for leave, prohibiting retaliation for the use of paid sick time, and empowering individual employees and the State of Michigan to file lawsuits for violations of the Act.

By April 1, 2019, employers must notify all employees of the employer’s sick time policy, that retaliation is prohibited, and that employees may file a civil suit or an administrative complaint for a violation of the new law.  The law also includes a poster requirement.

Possible Amendments

There is already widespread speculation that these laws will be amended later this year. Both laws began life as ballot proposals that received enough voter signatures to be placed on the November ballot. Had they been passed by voters in the November election, a three-fourths majority of the Legislature would have been required to amend them.

Because the Legislature has adopted these proposals, they will no longer be on the ballot in November, and only a simple majority of the Legislature will be required to amend them.  The Speaker of the House of Representatives has stated that there is no current plan in place to modify the laws, but that the legislature wanted to make sure they have “a say” in the legislation.

For now, though, these laws are on the books, and employers should begin making preparations to increase the minimum wage, provide paid sick leave, and provide the required notice to employees. We will keep you up to date on any amendments that are passed.

Please contact the authors or your Miller Johnson attorney with any questions about these new laws.