Victory for Small Business at Court of Appeals: Legislative changes made to Paid Sick Leave and Minimum Wage in 2018 Declared Constitutional

January 26, 2023

Victory for Small Business at Court of Appeals: Legislative changes made to Paid Sick Leave and Minimum Wage in 2018 Declared Constitutional

On Thursday, January 26, 2023, the Michigan Court of Appeals ruled 3-0 that changes made by the Legislature during the end of 2018 to previously adopted citizen referendums regarding mandated paid sick leave and the minimum wage were constitutional, reversing a Court of Claims decision from July 19, 2022. This means that the status quo remains when it comes to the current minimum wage, including the tipped wage, and paid sick leave requirements. (See below for more details.) The plaintiffs in the case are expected to appeal the decision to the Michigan Supreme Court. BACKGROUND: 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 referendums, 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. NFIB STATEMENT: “This is an important victory for small business. Reversal of the 2018 legislative changes made to the paid sick leave and minimum wage referendum language would have been devasting for small businesses in Michigan, let alone the overall economic climate. We are relieved that the common-sense improvements made to the proposals will stay in place. We also applaud the Court for recognizing the Legislature’s right to make changes according to the constitution, no matter what the issue – neither the judicial nor executive branch should interfere with the power given to the Legislature.”

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For nearly 80 years, NFIB has been the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington,?D.C.,?and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit?www.NFIB.com.

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