Michigan Supreme Court Issues Ruling on

Paid Leave and Minimum Wage

Saginaw Chamber Announces Out of the Frying Pan Legislative Luncheon to discuss what happened and what comes next

What happened: By a vote of 4-3, the Michigan Supreme Court overturned a unanimous bipartisan ruling from the Court of Appeals in Mothering Justice v Attorney General. The case challenged the Michigan Legislature’s handling of two ballot proposals going back to 2018: one to increase the minimum wage and the other to enact a one-size-fits-all paid sick leave law.

Because that process, now referred to as “adopt-and-amend,” has been found to be unconstitutional by the Michigan Supreme Court, the two 2018 ballot initiatives, which were never voted on by the people, will become law.

The Court said:

• The Earned Sick Time Act will take effect Feb. 21, 2025.

• The Improved Workforce Opportunity Wage Act (revised minimum wage provisions) will take effect Feb. 21, 2025.

• Note about the schedule increase: While the state has yet to release the step increases (it’s expected within two weeks), the Court’s opinion says this: “We are cognizant, after all, that nearly six years have passed since the Legislature adopted the Wage Act and that the $10.00 starting point that the Wage Act envisioned for 2019 is not the same as $10.00 in 2024. In keeping with the statute’s plan to begin accounting for inflation by 2022, we hold that the state treasurer must use this opinion’s publication date to calculate the inflation-adjusted rates for the minimum hourly wage prescriptions provided in the [Act.] Thereafter, in accordance with the Wage Act’s original design, the state treasurer shall calculate the inflation-adjusted minimum wage as described in [the Act]. Because the minimum wage increases will go into effect in 2025, we will treat the years 2019 to 2022 as the years 2025 to 2028 (plus the necessary inflation adjustment) to reflect the statute’s graduated implementation. The inflation-adjusted minimum wage will commence correspondingly in 2029 (originally 2023) as set forth in [the Act.]” 

What’s next: While the Michigan Chamber fundamentally disagrees with the Court’s ruling and its constitutional interpretation, this decision cannot be appealed.

The Michigan Chamber is moving to implement a two-pronged strategy:

• Compliance – the Michigan Chamber is putting together a series of events and compliance tools to break down businesses’ compliance obligations, including a FAQ and chart comparing the difference between current law and the law the Court put into effect with this ruling. Further information on how to access those tools will be coming soon.
• Legislation – With the power of their members and the business community behind them, the Michigan Chamber believes they can be successful in softening the impact of the Supreme Court ruling via legislative changes. Be on the lookout for additional information about how you can engage and help lawmakers understand how this ruling negatively impacts your business and workers.

The bottom line: The consequences of this decision will be felt by job providers and workers alike, and employers need to take stock of what’s required, regardless of industry or employee count. 

Source: Michigan Chamber of Commerce, July 31, 2024

About Saginaw County Chamber of Commerce

Since 1863, the Saginaw County Chamber of Commerce has been a leading advocate and champion for business by facilitating important connections, advocating business friendly legislation, and supporting leadership and community issues that make Saginaw County a great place to live, work, learn and play. The Chamber and its Members share a single purpose to elevate the community through business. www.SaginawChamber.org

About Michigan Chamber of Commerce

The Michigan Chamber of Commerce is a statewide business organization representing approximately 5,000 employers, trade associations and local chambers of commerce. The Michigan Chamber represents businesses of every size and type in all 83 counties across the state and employing more than 1 million Michiganders. The Chamber was established in 1959 to be an advocate for Michigan’s job providers in the legislative, political and legal process. www.MiChamber.com