Michigan’s New Minimum Wage and Sick Leave Laws

02 January 2019 Labor & Employment Law Perspectives Blog
Author(s): Felicia S. O'Connor

On December 13, 2018, Michigan’s governor signed into law two bills affecting employers in Michigan: a minimum wage law and a paid sick leave law. Versions of the laws were originally adopted in September 2018, when the Michigan legislature took advantage of a state process allowing it to adopt proposals that would otherwise be on the ballot in an election.

The original proposals would have brought the minimum wage to $12 an hour by 2020, and would have required Michigan employers to provide employees with paid sick leave at an accrual rate of one hour for every 30 hours worked, with a maximum of 72 hours per year.

After adoption of the proposals, however, the legislature amended their terms. The minimum wage law, as enacted, brings the minimum wage to $12 per hour by 2030 rather than 2020. The new schedule brings the minimum wage to $9.45 in 2019, $9.65 in 2020, and increases the minimum wage by around 23-26 cents per year until 2030. Additionally, employees who receive tips must receive 38 percent of the regular minimum wage.

Under the new paid sick leave law, which only applies to employers employing 50 or more people, employees accrue one hour of paid sick leave for every 35 hours worked. On this accrual system, employees are permitted to carry over up to 40 hours of paid sick leave.

However, employers are not required to allow employees to use more than 40 hours of paid sick leave per year, and can limit employees’ accrual to a maximum of 40 hours per year. As an alternative to the accrual system, the law also permits employers to provide all 40 hours to an employee at the beginning of the year. If an employer front loads the paid sick time in this manner, it is not required to carry over any unused sick time. For employees who begin work in the middle of a benefit year, employers can pro-rate the amount of paid sick leave provided in the employee’s initial year.

Under both the accrual and front load options of the law, paid sick leave can be used for: (1) the employee’s own health condition; (2) the health condition of a family member; (3) time off due to domestic violence or sexual assault, including for medical or counseling services, relocation, or legal services or proceedings; or (4) the closure of the employee’s workplace due to a public health emergency. The new law defines a family member as a child, parent, spouse, grandchild, grandparent, or sibling. Employees requesting leave under the law must still comply with the employer’s customary notice, procedural and documentation requirements.

As is common with other paid sick leave laws, if an employer already has a paid time off benefit for its employees, one which provides at least 40 hours of paid leave per year, the paid time off can cover the paid sick time requirement under Michigan’s new law.

Even employers that do not have employees in Michigan should take note of this law because it follows the national trend of state-level paid sick leave laws. More and more states are implementing this type of law and a wise employer will keep an eye on similar bills in the legislatures of the states in which it operates.

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