On July 31, 2024, the Michigan Supreme Court issued an important ruling impacting the minimum wage and mandatory paid sick leave across the state of Michigan.
The Michigan Constitution provides that the majority of the power to make laws is with the Legislature. However, the people of the State have the right to invoke the initiative. The initiative is a power reserved to the people to propose laws, to enact, and reject laws. The initiative can be invoked by collecting enough signatures to show popular support among Michigan voters. If they obtain the requisite amount, the initiative is invoked, and the proposed law moves on through the lawmaking process. Upon receipt of the initiatives, the Legislature can choose to either put the proposed initiative on the ballot for the voters to decide, or simply adopt them in the Legislature.
In September 2018, instead of sending the measures to the ballot, the Michigan Legislature voted into law two initiative petitions that would raise Michigan’s minimum wage, allowing for compensatory time in lieu of overtime, and providing paid sick leave. They did not amend the petitions before adopting them. However, after the November 2018 election, the same, now lame duck, Legislature voted to amend the laws. The alterations were so dramatic that they had the effect of changing and almost eliminating the changes the voters had sought through the initiative process. The Supreme Court held that the Legislature’s decision to adopt the initiatives and then amend them later on in the same session was a violation of the constitutionally guaranteed right to propose and enact laws through the initiative process. As Justice Elizabeth Welch wrote in her majority opinion, “[a]llowing the Legislature to bypass the voters and repeal the very same law it just passed in the same legislative session thwarts the voters’ ability to participate in the lawmaking process.”
The Court ruled that the original proposals relating to minimum wage and paid leave should go into effect on February 21, 2025. Michigan currently has a minimum wage of $10.33 per hour, and this will have the effect of increasing it by at least $2 per hour. There will also be an adjustment to reflect the current rate of inflation, to be calculated by the state treasurer. Over the next three years, the minimum wage will continue to increase, and thereafter will be indexed to inflation. In addition, the tipped minimum wage will gradually shift to 100% of the regular minimum wage over the next five years after 2025.
The sick leave initiative will require businesses that have fewer than 10 employees to accrue at least 40 hours of paid sick leave. They will accrue at least one hour of paid leave for every 30 hours worked. Larger businesses will be required to allow their workers to accrue up to 72 hours of paid leave.
If you have questions about how this Supreme Court decision may affect your business or you as an employee, an attorney at Demorest Law Firm may be able to help.
