Breaking News: Michigan Minimum Wage and Paid Sick Leave Update

This October, we reported that the Michigan Legislature had enacted two citizen-initiated proposals that were originally scheduled to appear on the ballot in November: (1) a gradual increase for Michigan’s minimum wage; and (2) new requirements for paid sick leave offered by employers with ten or more employees. We noted that both bills were being criticized by the Michigan Chamber of Commerce, and that the Michigan Legislature’s action in passing them was part of a procedural strategy to take the proposals out of the hands of voters, allowing for later amendments to lessen their effect on employers.    

The Michigan Legislature has followed through with passing amendments, and Governor Snyder has signed them into law. The amended laws are scheduled to take effect end of March/beginning of April.

Minimum Wage Law

  • Instead of raising the minimum wage to $10 in 2019, to $12 in 2022, and then imposing inflationary increases thereafter, the new law will impose reduced increases beginning with a jump to $9.45 per hour at the end of March 2019, and capping out at $12.05 per hour by January 1, 2030.
  • The “tipped” minimum wage will remain at 38% of the regular minimum wage rate.

 Sick Leave Law

  • The new law exempts businesses with fewer than 50 employees.
  • Instead of covering all employees (as was the case under the original proposal), the law will exempt private sector employees covered by a collective bargaining agreement, temporary workers and certain part-time, variable hour and seasonal employees, out-of-state employees, flight deck, cabin crew and railroad workers, and those employees who are overtime “exempt.”
  • Employees will accrue one hour of paid sick leave for every 35 hours worked, for up to 40 hours per year of sick leave. (However, employers can limit accrual to one hour per week.)

The weeks leading up to the new calendar year are a good time for employers to consider amending their paid time off policies to not only ensure they are in line with the new paid sick leave law, but to also take advantage of optional policies that might lessen the impact of this legislation. If you have questions about where to start, let the attorneys at Wright Beamer offer guidance tailored to you and your business.