Michigan ruling leaves employers uncertain about minimum wage, tipping and paid sick leave

On July 19, a Michigan Court of Claims state judge ruled that the state legislature violated Michigan’s Constitution in 2018 when, in a lame session, it overhauled revisions to the law. on Michigan Minimum Wage and Tipping and recently created Paid and Safe Sickness. time law only months after passing into law two proposed ballot measures covering these topics.

The judge struck down the version of the laws in the lame session of the legislature, which had been in effect since March 29, 2019, and ordered that the standards originally proposed and adopted be considered law. If the decision stands – because it is not appealed or, if appealed, it is affirmed by a state appellate court and/or the state Supreme Court – it will have a significant impact on compensation and paid vacation practices in Michigan.

Ohto decision says

Regarding the Legislature’s passing and amending strategy, the judge held that the Michigan Constitution does not allow the Legislature to pass a bill and the same legislative session to amend or amend it. repeal substantially. Otherwise, “it would mean that whenever a simple majority of the legislature opposes the content of an initiative, it could, by legislative sleight of hand, prevent the initiative from becoming law without ever allowing the people to vote on it.”

Instead, according to the judge, “the Legislative Assembly’s only options for responding to a bill proposed by the voters are to pass the law, reject it and send it to the voters, or propose an alternative law to be placed on the ballot paper at the next general assembly the election, in which case the initiative and the legislative alternative appear on the ballot paper and, if both are accepted, the one which obtains the most voice becomes law.

If the legislature passes a proposed initiative, as it did here, the judge ruled that changes to this law in the same legislative session can only occur if there is a referendum in which voters decide whether to accept or reject the action of the legislature. If there is no referendum, amendments can only be made after the deadline for requesting a referendum has expired: 90 days after the end of the legislative session during which the law was adopted.

This did not happen in this case. Instead, the legislature took what the judge called a “fourth option” that does not exist under the Michigan Constitution – an action the judge ruled illegal.

As the judge observed, the changes in question made by the legislature “substantially altered the original laws proposed by the voters.”

Regarding salary and hourly changes, the amendments:

  • reduced the minimum wage increase from $12 per hour to $10.10 per hour,
  • removed the annual adjustment after 2022 for inflation, and
  • eliminated language specific to tipped employees.

In addition, the revised Paid Leave Act:

  • exempt employers with less than 50 employees,
  • lowered the minimum number of hours that can be used in a year to 40 from 72 hours, and
  • repealed a section prohibiting employers from taking personal reprisals against employees.

According to the judge, “the process effectively thwarted the intent of the people and denied them the opportunity to vote on whether they preferred the voter-initiated proposal or the changes suggested by the Legislative Assembly.”

Next steps

Undoubtedly, employers have questions about what the ruling means. Did the minimum wage increase overnight from $9.87 to $12.00 an hour? Is a company’s paid sick leave policy no longer compliant? For now, it’s a bit fuzzy.

We’re waiting to see if the court might stay its decision while Michigan decides whether to appeal to the Court of Appeals or directly to the Michigan Supreme Court, which was previously asked to issue an advisory opinion regarding the actions of the legislature but, after receiving information, held on December 18, 2019 that it lacked jurisdiction to do so.

Michael Chichester Jr. is an attorney with Littler in Detroit. Sebastian Chilco is an attorney with Littler in San Francisco. © 2022. All rights reserved. Reprinted with permission.

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