More States add Paid Family Leave to their requirements.

Michigan’s Litigation Concluded

On July 31, 2024, the Michigan Supreme Court reversed the Court of Appeals and held that the legislature could not adopt and then amend, in the same legislative session, ballot initiatives raising the state’s minimum wage and expanding paid sick leave.  The Court stated that employers who followed the legislature’s amended measures may not be held liable for having reasonably relied upon assurances that the amended versions of the ballot initiatives were good law. The Court found that “‘injustice might result’ if courts punished employers for following the law as provided on the state’s official websites.”

As a result, effective Feb. 21, 2025, the state’s minimum wage rate will increase from $10.33 per hour to a rate that likely will exceed $12.00 per hour, with some forecasting a minimum wage as high as $12.50 per hour. The Supreme Court declined to apply the wage increase retroactively. Employers will not be responsible for payment of back wages that would have been due employees had the legislature not amended the statute.

The Supreme Court chose to implement a gradual phase-in of the minimum wage increases, in keeping with the structure of the original Wage Act. The increases will conform to a schedule of annual adjustments, but the original minimum wage rates will be adjusted for inflation, as calculated by the state treasurer each year, with rates for the following year announced each November. The Court said this approach “revives the constitutional status quo while accounting for the passage of time.”

Beginning Feb. 21, 2029, the state treasurer will calculate the inflation-adjusted minimum wage as set forth in the original ballot initiative and the tip credit will no longer exist.

In addition, on Feb. 21, 2025, nearly all Michigan employers must comply with the ESTA (“Earned Sick Time Act”) and offer 72 hours of sick leave annually, with varying paid leave requirements based on employer size. Employees alleging a violation of the ESTA will be able to bring a civil action for appropriate relief, including but not limited to, payment for used earned sick time, rehiring or reinstatement to the employee’s previous job, payment of back wages, and an equal additional amount as liquidated damages, together with reasonable attorney’s fees as the court allows.

Michigan employers will be required to offer employees 72 hours of sick leave annually. For employers with 10 employees, 72 hours must be paid by the employer. For small employers with fewer than 10 employees, 40 hours of the 72 must be paid.

Michigan Supreme Court Invalidates Legislative Amendments to Minimum Wage, Paid Sick Leave Measures - Jackson Lewis

Paid Family and Medical Leave (PFML) by State (investopedia.com)

Commentary by: Raylea Stelmach

Edited by: Kim Moss

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