New Court Decision Would Require Employers Under 50 Employees to Provide Sick Leave and Raise the Minimum Wage

Date: July 20, 2022

Late Tuesday, July 19, 2022, a Court of Claims decision has threatened to strike down legislative changes enacted in 2018 regarding minimum wage and mandatory paid sick time.

In September of 2018, at the urging of NFIB and the business community, the Michigan legislature adopted the Minimum Wage and Paid Sick Leave initiative proposals thereby removing them from the November statewide ballot. This action preserved the ability of the legislature to amend these proposals by a simple majority vote and approval of the governor.  Had they gone on the ballot and passed, they could only later be amended with three-quarters majorities. NFIB then worked with the legislature to amend the language in both the paid sick leave and minimum wage proposals during December 2018.    

NFIB worked to make sure that the smallest of businesses (under 50 employees) were exempted from the paid sick leave requirements and remove many of the onerous regulations and requirements contained in the original language for those employers with over 50 employees.

The original minimum wage law would have instituted a minimum wage of $12 per hour by 2022. Therefore, if this lower court ruling stands, the minimum wage in Michigan would jump from $9.87/hour to $12/hour and then be adjusted upward by inflation each year thereafter. Additionally, the tipped minimum wage would be increased to match the regular minimum wage by 2024.

To see a full list of changes made to both adopted proposals, go HERE.

Judge Douglas Shapiro indicated in his ruling that there is no language in the Michigan constitution that allows the legislature to “adopt and amend” when it comes to petition initiated legislation.  However, it should be noted, that there is also nothing that prohibits it. 

In early 2019 the Michigan Supreme Court heard arguments on the constitutionality of the “adopt and amend” strategy and declined to release an opinion on the matter. 

“Once again, the powers of the legislature are being usurped by another branch of government – this time by an activist judge.  It’s clear that if this legislative action was unconstitutional, the Michigan Supreme Court would have given an opinion on the matter in 2019 before the law went into effect, “ stated Amanda Fisher, NFIB Michigan State Director.   “If this decision were to stand, it would be the nail in the coffin for many small businesses struggling to recover from government shutdowns, supply chain issues, and inflation.”

A motion to halt implementation of the original proposal and to appeal the decision was filed on Wednesday, July 20, 2022.  NFIB will continue to keep its members apprised of new developments.

Related Content: Small Business News | Michigan

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