Amendments to Michigan Earned Sick Time Act and Michigan Minimum Wage Laws

By: Zeth Hearld

On December 14, 2018, outgoing Michigan Governor Rick Snyder signed senate bill 1171 and 1175, which amended the Michigan Earned Sick Time Act and the Improved Workforce Opportunity Act. In September 2018, the Republican controlled Michigan legislature had adopted these proposed ballot measures, which allowed the legislature time to make alterations to the measures that would have otherwise been voted on in the November elections.

The amendments signed by former Governor Snyder drastically altered the Michigan Earned Sick Time Act as well as proposed increases to the Michigan minimum wage. Below is a brief description of the more significant changes that employers must be aware of in 2019.

Michigan Paid Medical Leave Act

The Michigan Earned Sick Time Act (“ESTA”) is now known as the Paid Medical Leave Act (“PMLA”). Previously, the ESTA applied to all employers, and applied to nearly every type of employee. Under the PMLA, the scope of coverage has been reduced, and only applies to employers that employ at least 50 employees. In addition, the PMLA does not apply to certain salary exempt positions, nor does it apply to employees that are covered by a current collective bargaining agreement.

Notably, the ESTA required employers to provide at least 72 hours of paid leave per benefit year, whereas the PMLA now requires employers to provide only 40 hours of paid leave per benefit year. Under the ESTA, employees accrued one hour of paid leave for every 30 hours worked. Employees were also permitted to rollover unused leave year to year, although the ESTA was silent on how much time could be rolled over or how much leave an employee could accrue beyond 72 hours. Now, employees accrue one hour of paid leave for every 35 hours worked, and can only carry over up to 40 hours of leave year to year.

Moreover, the PMLA states that employers that “frontload” at least 40 hours paid medical leave at the beginning of the benefit year do not need to allow employees to rollover any paid medical leave to the next benefit year. It is important to note that the PMLA contains a rebuttable presumption that an employer is in compliance with the act if the employer provides at least 40 hours of paid leave to eligible employees each benefit year. The PMLA requires employees to comply with the employer’s normal notice and documentation requirements for requesting leave.

Employers will be required to display a poster in a conspicuous place notifying employees of their rights under the PMLA. However, the Michigan Department of Regulatory Affairs will be creating a poster with the necessary information. Another important change is the statute of limitations for employees to report a violation. Under the ESTA, employees had three years to report a violation. Under the PMLA, the statute of limitations has been shortened to six months. Employees may report suspected employer violations to the Michigan Dept. of Regulatory Affairs.

Improved Workforce Opportunity Wage Act

Senate Bill 1171 amended the minimum wage tracks established by the Improved Workforce Opportunity Act. Under the amended Act, minimum wage is set to increase to $9.45, and to increase to $12.00 per hour by 2030. In addition, minimum wage for tipped employees will only increase to $4.00 per hour by 2030.

Impact on Employers

Both the Michigan Paid Medical Leave Act and the minimum wage increase take effect on March 29, 2019. As such, employers have a few months to prepare for the upcoming changes, and in regards to the Michigan Paid Medical Leave Act, determine how they will comply with the Act’s requirements.

Amendments to Michigan Earned Sick Time Act and Michigan Minimum Wage Laws

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