Michigan Supreme Court Revives Sick Time and Minimum Wage Laws

The Michigan Supreme Court recently held that the Michigan Paid Medical Leave Act (PMLA) and the amended Michigan Improved Workforce Opportunity Wage Act (Wage Act) are unconstitutional and void. Mothering Justice v Attorney General, No. 165325 (July 31, 2024). The Court determined that the Earned Sick Time Act (ESTA) and a previous version of the Wage Act will go into effect on February 21, 2025. The revived Acts have significant implications.

Background

In 2018, voters petitioned to enact the ESTA and the original Improved Workforce Opportunity Wage Act. The Legislature adopted both laws as presented by voters, but then significantly amended them before their effective date. Those amended acts became the PMLA and the Wage Act.

The Supreme Court ruled it was unconstitutional for the Legislature to adopt voter-initiated laws and amend them in the same legislative session. The Court ordered the ESTA and the Wage Act (as originally approved by voters) into law. The Court added that because the Legislature was responsible for the “constitutional mischief,” employers cannot be held liable for complying with the now-unconstitutional PMLA and Wage Act (as amended by the Legislature).

ESTA and PMLA

While the ESTA’s provisions (ordered into law by the Supreme Court) and the now-unconstitutional PMLA are similar, they also have material differences. A summary of the differences is provided in the attached chart.

Wage Act

The primary difference between the two versions of the Wage Act is minimum wage rates. Based on the Court’s recent decision, minimum wage will increase as follows:

• February 21, 2025: $10.00 plus the State Treasurer’s inflation adjustment
• February 21, 2026: $10.65 plus the State Treasurer’s inflation adjustment
• February 21, 2027: $11.35 plus the State Treasurer’s inflation adjustment
• February 21, 2028: $12.00 plus the State Treasurer’s inflation adjustment
• February 21, 2029 and each February 21 thereafter: wage calculated by the State Treasurer using a statutory inflation formula

The State Treasurer is required to publish by November 1 each year minimum wage rates adjusted for inflation that will become effective on the following February 21. The minimum wage will not increase if Michigan’s unemployment rate is 8.5% or higher for the immediately preceding year.

Next Steps

School officials should familiarize themselves with the ESTA and Wage Act requirements in anticipation of their February 21, 2025 effective date. Collective bargaining agreements and individual employment contracts that contain PMLA provisions or recite minimum wage requirements may be impacted moving forward. Accordingly, school officials should review current contracts to determine if revisions are necessary or beneficial based on the Court’s decision. Thrun Law Firm will update Thrun Policy Service Policy 4305 to reflect the new legal standards.