In 2018, the Michigan Legislature enacted citizens-initiated laws regarding the minimum wage, the credit that can be used with certain tipped employees to satisfy the minimum wage (known as the tip credit), and paid sick leave for employees. Shortly after enacting the citizens-initiated laws, the Legislature amended them and scaled back their provisions. (See our prior guidance here and here). By adopting the citizens-initiated laws, the Legislature was able to amend the laws with a simple majority. If the Legislature had allowed the citizens-initiative to proceed to the 2018 general election ballot, any future amendment would have required a three-fourths vote of the Legislature. On July 19, 2022, the Michigan Court of Claims held that this adopt-and-amend procedure was unconstitutional. Unless this decision is stayed pending an appeal, the ruling will reinstate the initial, unamended laws, broadening paid sick leave available to employees, raising Michigan’s minimum wage to $12.00 per hour, and phasing out the tip credit. If the decision stands, employers will need to revise their paid sick leave policies and potentially change their pay practices.
More specifically, the Michigan Court of Claims held that the 2018 amendments to the Paid Medical Leave Act and the Improved Workforce Opportunity Wage Act unconstitutional, returning the laws to their original form. The resulting changes, and how they affect many employers, include the following:
Paid Sick Leave
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