Legal Updates
I hope you all had a wonderful holiday season and New Year. I wanted to make sure you are updated on two important employment law developments. If you have 50 or more employees, PLEASE be sure to read the second section!

Minimum Wage
As noted in my prior Legal Update, the Michigan Legislature in Fall 2018 passed a bill that would have raised minimum wage to $10 per hour in 2019 ($12/hour by 2022) and excluded tip credits from that wage. This proposal, known as One Fair Wage, was slated to go to voters, but the legislature passed the law and then (as expected) scaled the law back in Lame Duck. The new law sets a minimum wage schedule through 2030 (starting at $9.45 for 2019 and ending at $12.05 in 2030) and provides that no increase will occur if unemployment is 8.5% or greater in a given year. Tip credits are still permitted. While this is the current law, legal challenges are expected regarding both Minimum Wage and Sick Time (see below). So stay tuned.

Paid Sick Time
If you have 50 or more employees (or are close to having that many employees), PLEASE read on.
 
As expected (and reported in my prior update), the legislature in Michigan Lame Duck 2018 revised the paid sick leave law it passed earlier in the Fall (which was slated to go on the Nov. 2018 ballot).

The Paid Medical Leave Act (2018 Public Act 369) was passed by the legislature and signed by Governor Snyder on December 14, 2018. It will take effect on March 21, 2019. Unlike the prior version, it only applies to employers with 50 or more employees. The points you need to know are set forth below. 
  
·       How employees are counted : The new law is silent on how to count employees to determine if an employer has reached the 50-employee threshold. For example, it is unclear if employers count all part-time employees (or add them up to a full-time equivalent). It’s also unclear if overtime-exempt employees or temporary employees should be counted since they are not covered by the law. In other words, are the excluded employees (see next bullet point) counted for purposes of determining if an employer has 50 employees? The current law does not answer that question. For now, employers should consider being over-inclusive while the regulators work this out.

 ·    Employees NOT Covered :  The following employees do not need to be provided with paid sick leave under the new law: (1) employees who are exempt from overtime under the Fair Labor Standards Act; (2) employees who worked less than 25 hours per week on average the prior calendar year; (3) employees employed 25 weeks or fewer in a calendar year for a job scheduled 25 weeks or fewer; (4) employees covered by a non-public entity collective bargaining agreement (i.e. private sector union employees); (5) variable hour employees (at time of hire the employer cannot determine if the employee will be working an average of 30 hours per week); (6) employees whose primary work location is outside of Michigan; (7) employees under 20 years old and part of a training program pursuant to Michigan’s wage laws; (8) employees employed via a temporary help firm; (9) certain railroad and airline employees; and (10) employees of the US Government or another state’s government.

·     Purpose.   Sick Time can be used for care of an employee’s or his/her family member’s mental or physical illness, injury, health condition, medical diagnosis, care, treatment or preventative medical care. It also covers time off for legal needs associated with domestic violence, public health emergencies resulting in closure of the employee’s place of employment, or care of a child whose school or daycare closed for such an emergency. “Family member” includes step-children, foster children, legal guardians and any individual who is or was “in loco parentis” to a child; individuals to whom an employee is legally married; grandparents or grandchildren; and siblings.
 
·      Amount of Time:  Eligible Employees must be provided up to 40 hours of paid sick time each year of employment.  An employer can do this one of two ways: 
 
(1)  Provide employees 40 hours of paid sick leave at the start of your time-off year (usually a calendar year but sometimes anniversary year). This time does not have to carry forward (but is awarded ou tright to the employee at the start of the benefit year) and can be pro-rated for employees who start mid-year.
 
(2)  Employees accrue 1 hour of time for every 35 hours worked.    This is the biggest area my clients are having to adjust (they already have a paid time off policy that covers sick leave but, especially for new employees, that amount does not equal 1 hour for every 35 hours worked). This accrued time can be capped at accrual of 1 hour per week and 40 hours annually.  The accrued time must be permitted to carry over to the following year (but again, time used can be capped at 40 hours annually).   
 
·    Coordination with Other Paid Leave.  If you provide your employees 40 hours of paid leave (ie vacation time or PTO), then the law presumes you are in compliance (but as noted, make sure if you use an accrual system that employees are accruing at least 1 hour for every 35 hours worked). Your written policy should clearly note sick leave is included.
 
·      Amount of Pay.   Employees must be paid the higher of his/her straight hourly rate (excluding any premiums, overtime rates or gratuities) or minimum wage.
 
·   Increments Sick Time Can be Used . Sick time must be permitted in 1-hour increments. The law provides that an employer can have a different increment policy, so long as it is in writing in a handbook or other benefits document. Many PTO policies require 2 or 4-hour increments (which the law allows so long as in writing in your Handbook).

·    Documentation . You can still require documentation of the need to be absent (but must give the employee 3 days to provide it).
 
·   No Cash Out.  Paid Sick Time is not required to be “cashed out” at either year-end or upon employment termination.

·     Waiting Period.  While an employer must award new employees sick time, the employer can have a 90-day waiting period prior to the employee being eligible to use the paid sick time.

·    Posting.   All covered employers must post a notice advising employees of their rights under this new law. Michigan’s Department of Licensing and Regulatory Affairs will have a free notice available.

As always, I'm here to help. Email or call me if I can be of assistance.

Elizabeth