Court Ruling on Michigan’s Paid Sick Leave and Minimum Wage Laws Could Impact Your Business

Article Updated January 26, 2023

Today, the Michigan Court of Appeals overturned a July 2022 Court of Claims ruling finding that the Michigan Legislature lacked the constitutional authority to adopt and subsequently amend (“adopt-and-amend”) two 2018 ballot initiatives.

One of the ballot initiatives would have increased the minimum wage to $12 per hour in 2023 and increased tipped wages to the full minimum wage, and the other would have required employers of all sizes to provide up to 72 hours of paid sick leave to all employees annually.

The current $10.10 per hour minimum wage remains in effect, as does the current paid medical leave law.

Please read more in the Michigan Chamber of Commerce’s Special Update.

Article Updated August 2, 2022

The Michigan Court of Claims issued a ruling on July 19, 2022, immediately reinstituting 2018 ballot proposals that:

1. required employers of all sizes to provide up to 72 hours of paid sick leave to all employees annually; and
2. raised the minimum wage to $12 per hour.

The Court of Claims judge who ruled the “adopt and amend” strategy was unconstitutional agreed to stay that ruling until February 19, 2023. This means that, for now, the current $9.87 per hour minimum wage remains in effect, as well as the current paid medical leave law. However, the plaintiffs in the case are expected to appeal the ruling on the stay as early as this week in the Michigan Court of Appeals.

Please read more in the Michigan Chamber of Commerce’s recent article.

We will continue to alert you of significant developments.

Original Article Posted July 21, 2022

The Michigan Court of Claims ruled this week that the Michigan Legislature’s 2018 “adopt and amend” strategy employed to find a 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 a higher court reverses the decision, the law would immediately revert to the 2018 ballot language. This means Michigan’s paid medical leave law will require virtually every size and type of business, and class of employee, to receive 72 hours per year of paid sick leave, and the state’s minimum wage will increase to $12 an hour (and a large increase for tipped employees).

Please read the Michigan Chamber’s article that compares the current provisions for paid sick leave and minimum wage with the 2018 ballot proposal language (what’s now pending).

Many questions remain

Undoubtedly, employers have questions about what the decision means. Right now, it’s unclear whether a stay will be issued, whether the decision will be appealed, and whether employers must comply with the original ballot initiative language. The Michigan Legislature may respond to the ruling with new legislation.