Lawmakers returning to Lansing for the start of a new legislative session Wednesday immediately focused on making changes to the state’s pending minimum wage and paid sick time policies before they go into effect next month.
While the proposals put forward by Republicans in the Michigan House and Democrats in the Michigan Senate lay out different visions for how to address minimum wage and paid sick time policies — both set for significant changes Feb. 21 due to a Michigan Supreme Court ruling issued last year — Wednesday marks a noteworthy step in the debate, as both chambers are showing an appetite to take up legislation on the policies.
Under the pending policies, minimum wage in Michigan is currently set to rise from $10.56 to $12.48 on Feb. 21, increasing each year before eventually reaching $14.97 by 2028. The tipped minimum wage — the lower hourly rate paid to workers expected to make the bulk of their earnings in tips, like restaurant servers and bartenders — is set to gradually rise each year until it fully matches regular minimum wage and is eliminated altogether in 2030.
Michigan’s paid sick time laws are also currently set to expand. Employees in Michigan will earn one hour of paid sick time for every 30 hours worked starting Feb. 21. Businesses with 10 or more employees will have to allow workers to use up to 72 hours of paid sick leave per year if accrued with sick time being eligible for carryover. Businesses with fewer than 10 employees will have to allow workers to use up to 40 hours of paid sick leave per year if accrued, and up to 32 hours of unpaid sick leave. Employers could choose to allow higher limits.
A continuing battle over wages
In the last legislative session, which ended in December, House Republicans backed a vote on maintaining the existing tipped minimum wage, including walking off the House floor during the lame duck period in an effort to force Democratic leadership to vote on minimum wage bills, although no such vote took place before session ended.
The legislation proposed by House Republicans this week would preserve the tipped minimum wage at 38% of the regular minimum wage. It would also establish an hourly minimum wage of $12 beginning Feb. 21, lower than the currently planned $12.48. Under the House GOP proposal, minimum wage would gradually increase until it reaches $15 in 2029, versus the planned $14.97 in 2028.
Rep. Jay DeBoyer, R-Clay Township, said in a statement that the caucus has heard from small business owners concerned about having to close and lay off employees due to increased wage demands, under a higher minimum wage scale.
“There is urgency to deliver a solution that respects every side of this equation, and that’s why these are the first bills introduced this year,” DeBoyer said. DeBoyer and Rep. John Roth, R-Interlochen, are the sponsors of bills addressing minimum wage and paid sick time, according to a House Republican news release.
In the Senate chamber, Sen. Kevin Hertel, D-St. Clair Shores, has put forward legislation that would increase the tipped minimum wage gradually each year until it reaches 60% of the standard minimum wage by 2035, and then it would be capped at that rate. Hertel’s proposal, Senate Bill 8, also would see Michigan reach a $15 minimum wage by 2027, a year sooner than what’s currently slated to take place. On social media, Hertel said maintaining the tipped minimum wage would be beneficial to service industry workers and small businesses in Michigan.
Now back to sick time
Along with the state’s minimum wage laws, paid sick time policies are also set to change next month.
Sen. Sam Singh, D-East Lansing, introduced Senate Bill 15, which would require businesses with more than 25 employees, versus 10, to allow workers to accrue up to 72 hours of paid sick time, as a minimum. Businesses with fewer than 25 employees would be classified as small businesses and would have to allow workers to accrue up to 40 hours of paid sick time and another 32 hours of unpaid sick time.
Singh’s bill would also allow businesses to frontload sick time at the start of each year, rather than requiring employees to accrue it.
If an employer pays out unused sick time at the end of the year, employees would be allowed to carry over up to 144 accrued hours. If the employer doesn’t pay out remaining sick time, employees would be able to carry over up to 288 hours.
For employers with mandated staffing ratios, sometimes found in health care facilities, their human resources policy on providing notice to use sick leave time would take precedent when it comes to taking paid leave.
Singh did not return a message seeking comment on Thursday.
The House Republican proposal on sick time would require employers with more than 50 employees to allow workers to accrue one hour of paid leave for every 30 hours worked, up to at least 72 hours. The bill also states workers would have to comply with company standards for requesting paid sick leave time.
Part-time employees, defined as workers who are employed for less than 25 weeks or less than 25 hours a week on average, would not be eligible for the paid leave policies under the bill.
Employers, under the House GOP plan, would be allowed to frontload 72 hours of paid leave time at the start of the year, or a prorated amount for a worker hired during the year. Employers who frontload paid leave time would not have to track accrued hours or allow paid leave to carry over year to year.
In order to become law, the proposals will have to be negotiated between the House and Senate before it goes to Gov. Gretchen Whitmer’s office for consideration.
How we got here
The pending changes, slated to take effect Feb. 21, are due to a years-long court battle over a pair of voter-initiated petitions from 2018.
In July, the Michigan Supreme Court ruled the Legislature acted unconstitutionally in 2018 when it adopted petition language seeking to boost minimum wage and expand paid sick leave requirements for employers but amended the language to delay the minimum wage increase and exempt most businesses from having to comply with the paid sick leave requirements.
The court’s ruling, however, wiped out the 2018 changes and established a date of Feb. 21, 2025, for the intended changes to take effect.
In a news release, DeBoyer and Roth said the court order placed unrealistic requirements on businesses when it comes to employee wages and paid sick leave policies.
Supporters of server tips applaud during the Save MI Tips rally on Wednesday, Sept. 18, 2024, at the Capitol in Lansing.
Groups react to bill introductions
Restaurant and businesses advocacy groups have called on lawmakers for months to address the changes. Some service industry workers fear their actual wages would go down if they were put on a standard minimum wage, having said they don’t believe patrons would be as likely to tip them if they knew workers were making the regular minimum wage. Under the pending changes, patrons would still be allowed to tip staff at restaurants and bars.
John Sellek, a spokesperson for Save MI Tips, one of the principal groups calling on lawmakers to preserve the tipped minimum wage, called the proposals’ introductions encouraging but said lawmakers need to reach a compromise fast.
“… We are literally days away from a court-ordered economic disaster for thousands of working moms, students and more,” Sellek said in a statement issued Wednesday.
But some backers of the original petition efforts want lawmakers to at least see how the changes play out before they pass legislative changes. Christopher White, director of the Restaurant Opportunities Center of Michigan, said Thursday cost of living is increasing and workers need to earn pay to compensate for that.
“We oppose any efforts that would cut the increase in wages because it contradicts the rise in cost of living,” White said.
Restaurant Opportunities Center was among the groups which sued the Legislature for amending the petition language in 2018, along with Mothering Justice, MI Time to Care and Michigan One Fair Wage.
Contact Arpan Lobo: alobo@freepress.com
This article originally appeared on Detroit Free Press: Varying proposals raised for Michigan’s minimum wage, paid sick time