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Michigan Supreme Court Ruling to Could Affect Businesses

The Michigan Supreme Court is set to make a significant decision on the state’s minimum wage and earned sick leave laws, with a ruling expected as the session wraps up at the end of the month. The debate began in 2018 when Republicans embraced petition-driven plans to raise the state’s minimum wage to $12 by 2022 and to allow workers to bank paid sick leave. The GOP-majority Legislature opposed the initiatives but adopted them to avoid a likely voter approval. In the lame-duck session, Republicans amended the bills to be more employer-friendly with simple majority votes, bypassing future super-majority requirements.

The September 2018 adopted acts stated the following:

“Improved Work Force Opportunity Act”

  • Raised the minimum wage to $12.00 per hour by 2022
  • Adjusted for inflation each year thereafter
  • Increased tipped wages to match the regular minimum wage by 2024

“Earned Sick Time Act”

  • One hour of paid sick leave for every 30 hours worked up to 72 hours per year
  • Employers with less than ten employees provide up to 40 hours of paid leave and 32 hours of unpaid leave per year.

These acts were then adopted in December 2018 with the following amendments:

“Improved Work Force Opportunity Act”

  • Reduced the minimum wage increases
  • Removed the annual adjustment after 2022 based on the inflation
  • Eliminated the language that gradually increased the minimum wage for tipped employees to match the regular minimum wage by 2024.

“Earned Sick Time Act”

  • Exempted employers with fewer than 50 employees.
  • Required employers to provide employees one hour of paid leave for every 35 hours, instead of one for every 30 hours.
  • Stated that employers needed to provide up to 40 hours of paid leave per year, rather than up to 72 hours per year; and
  • Repealed a section prohibiting retaliation or discrimination against employees for exercising a right protected under the Act.

Over the past six years, there has been a back-and-forth of appeals and legislation regarding these acts and the amendments made in December 2018.

  • December 2018: Petition-initiated proposals adopted to boost the state minimum wage to $12 by 2022 and allow employees to bank paid sick leave. Amendments are made to make the bills more employer-friendly.
  • July 19, 2022: The Court of Claims ruled that the amendments violate the Michigan constitution, stating that the legislature can only adopt, reject, or propose an alternative for new legislation in a single session, making the December 2018 changes null.
  • July 20, 2022: The State of Michigan appeals the Court of Claims’ decision, and the amendments remain in place during the appeal process.
  • July 26, 2023: The Michigan Court of Appeals reverses the Court of Claims’ decision, finding that the legislature can adopt and amend a law within the same session, as such actions are not explicitly prohibited by the state constitution.
  • July 31, 2024: The Michigan Supreme Court is expected to make a final decision on the case as the session ends.

Once the session ends, we will add more information regarding the final court decision.