Employers in Michigan should remain vigilant with respect to recent, dramatic changes to the state’s wage and hour laws, which include raising the minimum wage to $12.00 an hour, phasing out the tipped employee wage classification, and creating new sick leave obligations for employers.
On July 19, 2022, the Michigan Court of Claims ruled that the Michigan legislature’s amendment of two popular ballot initiatives was unconstitutional. The initiatives are the Improved Workforce Opportunity Wage Act (IWOWA) (the minimum wage law) and the Paid Medical Leave Act (PMLA) (formerly the Earned Sick Time Act). The case, Mothering Justice v. Nessel, is stayed until February 20, 2023. On August 5, 2022, the Michigan Attorney General filed a Joint Motion for Expedited Appeal. The Michigan Court of Appeals—and potentially the Michigan Supreme Court—will soon decide whether the IWOWA and the PMLA must be enacted as originally submitted by the voters to the Michigan legislature or as the legislature later amended them.
As originally written, the IWOWA increased the state’s minimum wage by $0.65 to $0.70 annually, which was set to hit $12.00/hour by January 1, 2022, increasing at the rate of inflation thereafter. It also gradually eliminated the state’s tipped employee classification, requiring payment of 60% of the minimum hourly wage to tipped employees by January 1, 2022; 80% by January 1, 2023; and 100% by January 1, 2024. However, when the Michigan...
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