The Southwest Michigan Regional Chamber is sounding the alarm to its members and business owners in general about an on-going court battle over Michigan’s minimum wage and sick leave regulations. SMRC CEO Arthur Havlicek issued this update on the situation, suggesting that members reach out to state lawmakers:
The Michigan Court of Claims ruled late yesterday that the Michigan Legislature’s 2018 “adopt and amend” strategy employed to find a workable compromise to two ballot initiatives increasing the minimum wage and enacting a paid sick leave law was unconstitutional. The Legislature is expected to appeal the decision in the Michigan Court of Appeals and request a stay.
Unless a stay is granted and the decision is ultimately reversed by a higher court, the ruling states the law would immediately revert back to the 2018 ballot language.
Here’s what that means:
Under the 2018 legislative plan (current law), employers with fewer than 50 employees are not subject to mandatory paid sick leave requirements and employers with more than 50 employees have to provide a minimum of 1 hour of sick leave for every 35 hours worked, up to a minimum of 40 hours each year.
If this lower court ruling stands, the mandatory paid sick leave benefit will increase to 1 hour given for every 30 hours worked up to a minimum benefit level of 72 hours each year with the provision applying to all employers of all sizes, including small businesses with fewer than 50 employees.
The original law would have also 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 per hour to $12 per 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.This means restaurant workers, like other workers, would earn at least $12 per hour, up from the current industry guarantee of $3.75 per hour.
Simply put, these changes – regardless of how quickly they are implemented – could potentially wreak havoc on the thousands of Michigan employers who are already struggling to survive amidst a historic labor shortage, cripplingly high inflation, and persistent supply chain problems.
Thankfully, we fully expect the ruling will be appealed and do not believe employers have to immediately comply with the terms of the initiatives unless or until the Michigan Department of Labor and Economic Opportunity (LEO) indicates it will begin enforcement.
You can reach Havlicek to discuss the issue’s effect on your business:
Arthur Havlicek | President & CEO
Southwest Michigan Regional Chamber
(e) ahavlicek@smrchamber.com
(o) 269.932.4042
