On January 26, 2023, the Michigan Court of Appeals reversed the Michigan Court of Claims and held the “adopt-and-amend” strategy the Michigan Legislature used in 2019 to enact minimum wage and paid sick time laws was not unconstitutional. According to the Michigan Court of Appeals, the Michigan Legislature may amend a voter-initiated law just as it may amend any other law. As a result, for the time being, employers may comply with the MPMLA and do not need to start complying with the ESTA effective February 20, 2023, unless a further appeal is filed, and the Michigan Supreme Court reverses the Michigan Court of Appeals or the Michigan Legislature passes new laws similar to the voter-initiated laws.
Author: Angela N. Johnson
Update: Michigan Court Stays Decision to Reinstitute Higher Minimum Wage and More Generous Paid Sick Time Laws
Recently, we issued an alert explaining that, on July 19, 2022, the Michigan Court of Claims ruled that the “adopt-and-amend” strategy the Michigan Legislature used in 2019 to enact more business-friendly minimum wage and paid sick time laws was unconstitutional. The court also reinstituted the prior versions of these laws which meant Michigan employers were immediately subject to the more generous Earned Sick Time Act and the higher $12 per hour minimum wage for most employees.
However, on July 29, 2022, the same court issued a stay of its ruling through February 19, 2023 to allow employers and the relevant state agencies time to comply with and enforce the original, reinstituted laws. Accordingly, as of the writing of this alert, employers have until February 19, 2023 to comply with the Earned Sick Time Act (which requires more paid sick time than the now-stricken Michigan Paid Medical Leave Act) and provide at least a $12 per hour minimum wage for non-tipped employees, unless an appellate court or the Michigan Legislature acts before February 19.
Michigan Court Reinstitutes Higher Minimum Wage and More Generous Paid Sick Time Laws, Effective Immediately
On July 19, 2022, the Michigan Court of Claims ruled that the “adopt-and-amend” strategy the Michigan Legislature used in 2019 to enact minimum wage and paid sick time laws was unconstitutional. Those laws were regarded as more favorable to businesses, but they amended and substantially differed from the voter-initiated laws the Legislature adopted earlier in the same legislative session. For example, the amended laws reduced the increase of the minimum wage from $12 to $10.10 per hour, lowered the required amount of paid sick time from 72 to 40 hours, exempted employers with fewer than 50 employees, and exempted certain employees, such as executive, administrative, professional and outside sales employees. Part-time employees who worked an average of fewer than 25 hours per week were also exempted from the paid sick leave law. The laws are known as the Earned Sick Time Act (ESTA), which the Legislature amended and renamed the Michigan Paid Medical Leave Act (MPMLA), and the Improved Workforce Opportunity Wage Act (IWOWA), which was amended under the same name.
According to the court, the Michigan Legislature has only three options in response to a proposed law initiated by voters: (a) adopt the initiative as presented, (b) reject the petition, or (c) propose an alternative law. The Michigan constitution does not permit the tactic used by the Legislature to amend the voter-initiated laws which, in the court’s review, “effectively thwarted the intent of the People.” As a result, the laws that have governed Michigan employers since 2019 have been “voided,” and the original voter-initiated laws are effective immediately.
The U.S. Department of Labor Announces Final Rule to Increase Minimum Wage for Certain Federal Contractors
On November 22, 2021, the U.S. Department of Labor (DOL) finalized a rule to increase the hourly minimum wage for employees of certain federal contractors beginning January 30, 2022. The final rule implements Executive Order 14026, which President Joe Biden signed earlier this year.
The final rule requires certain federal contractors to pay workers on government contracts at least $15 per hour beginning January 30, 2022. After 2022, the minimum wage will be adjusted annually for inflation at a rate set by the Secretary of Labor.
DOL Extends FLSA Final Joint Employment Rule Effective Date
The federal Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees at least minimum wage plus overtime compensation. If an employee is unpaid or underpaid — due to a calculation error or an employee’s unreported time worked, including remote work arrangements during the pandemic — the employee may recover back pay, liquidated damages, attorneys’ fees and litigation costs. If two or more employers have a relationship with an employee — for example, if an employee works for a staffing agency and is assigned to work at the agency’s customer or an employee performs work for two with common ownership or management — the law may deem the employers to be joint employers with joint and several liability, depending on the facts. If one joint employer fails to comply with the FLSA, both joint employers may be held liable. Different laws use different tests for joint employment.
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EEOC Issues New COVID-19 Guidance Addressing Vaccinations in the Workplace
Today, after much anticipation and just in time for the Memorial Day holiday, the Equal Employment Opportunity Commission released updated guidance on COVID-19 vaccination issues raised under federal equal employment laws. We outline five things you need to know about the new guidance.
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