Consequences of “Adopt and Amend” decision

In July, the Michigan Supreme Court ruled on a legislative maneuver from 2018 called “Adopt and Amend”, and the results of the decision will soon create drastic changes to Michigan’s minimum wage and paid sick leave requirements.

Starting February 21^st, 2025, all businesses in Michigan will be required to offer their employees 72 hours of sick leave per year and will be required to follow a litany of complex and burdensome requirements for administering the new benefit. As written, these requirements will go so far as to restrict a business’ ability to maintain and enforce punctuality and attendance and will even expose employers to litigation where they are presumed guilty unless they can definitively prove otherwise.

Additionally, the decision will create a new minimum wage schedule that will gradually increase the rate until it reaches $15.00/hr in 2029. This schedule also phases out the tipped wage credit over that same period, even though the tip credit is overwhelmingly popular among tipped wage workers.

SBAM is advocating for commonsense changes to the Earned Sick Time Act, and to preserve the tip credit. These efforts have resulted in the introduction of two bills, HB 6056 (Shannon) and HB 6057 (Filler), but both bills require substantial amendments before they are considered for passage.

To learn more about these new requirements and about SBAM’s advocacy efforts in this space, please visit our dedicated resource page.

Unemployment Benefit Expansion – HB 5827 (Whitsett); SB 40 (Wojno)

Throughout the legislative term, there has been a sustained effort in Lansing to increase unemployment insurance benefits. House Bill 5827 (Whitsett) , which passed the House earlier this year, would increase maximum benefit weeks from 20 to 26 weeks of eligibility, and future amendments to the bill could increase the maximum benefit amount as well. Similarly, Senate Bill 40 contains a similar benefit week expansion, and the Chair of the Senate Labor Committee has made it publicly known that he wishes to see the bill move.

Advocates also seek to increase the maximum benefit amount from $362 per week to as high as $602 per week with an automatic annual increase. These proposed changes would only further exacerbate ongoing talent shortages in a time when Michigan’s workforce participation rate is relatively low and employers struggle to fill essential positions. SBAM is also concerned that the Unemployment Insurance Agency (UIA) has not yet fully addressed systemic fraud issues within the UI system and has not restored the 100% employer funded UIA trust fund to pre-pandemic levels. Business owners trust the UIA to be good stewards of their funds, and efforts to increase benefit amount and duration will make that job impossible. SBAM will vehemently oppose any benefit amount  increase until concerns are resolved.

Workers’ Compensation Overhaul – Senate Bill 1079, 1080

Michigan’s no-fault workers’ compensation system shields employers from employee lawsuits in exchange for their prompt payment of wage loss and medical benefits for anyone injured at work – regardless of who was at fault. Michigan’s law is used as a model across the country, yet there is a desire from some to abandon our system at the expense of employers. Senate Bills 1079 and 1080 would effectively gut Michigan’s worker’s compensation system and would lead to drastically increased premiums for employers. These bills would substantially alter and expand the definition of disability, eliminate many current work search requirements, and would even apply changes retroactively all the way back to 1985. In a time when Michigan’s small businesses face economic headwinds and an avalanche of new mandates from Lansing, such extreme changes to a fully operational system would be tremendously damaging.

Local Preemption Repeal – House Bill 4237 (Andrews); House Bill 5533 (Neeley); Senate Bill 171 (McCann)

Michigan law requires that all rules pertaining to labor regulations be set at the state level, which sets a consistent regulatory framework across all 83 counties and in all municipalities. Bills currently under consideration in the House and Senate would allow Michigan’s 1,800+ local units of government to enact their own regulations governing minimum wage, sick leave, and other labor requirements. For small business owners, who seldom have the time or resources to closely track the ever-changing whims of local officials, this bill would destabilize and complicate the environment in which they do business. Additionally, for owners operating multiple locations in different municipalities, this bill would require them to remain complaint with a complex patchwork of different, sometimes overlapping, regulations.

Consumer Protection Act Expansion – Senate Bill 1021, 1022 (Singh)

The Michigan Consumer Protection Act (MCPA) does not apply to transactions or conduct that are already regulated by a regulatory board or license. This exemption protects a wide range of businesses from class actions and other lawsuits. These highly regulated industries already include safeguards to protect consumers against deceptive conduct and remedies for consumers who have been harmed by deceptive practices. Our current law protects businesses in dozens of industries, with a list spanning from hospitals and veterinarians to barbershops and mechanics. Senate Bill 1022 would broaden the MCPA to also include these businesses and would subject them to future lawsuits under the Act. Because remedies already exist for consumers who feel they have been wronged by a regulated business, this bill does little to further protect consumers and creates a substantial obstacle for small businesses who cannot afford to defend against newly authorized consumer lawsuits.

Plumber and Electrician Apprentice to Journeyman Ratios – Senate Bill 740 (Camilleri); Senate Bill 895 (Cherry)

Senate Bill 895 would change the current ratio for apprentice to journey/master electricians on a jobsite from 3:1 to 1:1. While a similar Bill, SB 740, which introduces a new 2:1 ratio for plumbers, has already passed the House and the Senate, SB 895 continues to work through the legislative process. Advocates for these bills insist that these mandates will improve jobsite safety, but they have failed to present evidence that safety issues can be attributed to the current ratios, or that implementing stricter requirements will improve safety in any way. Meanwhile, there is more than sufficient evidence to indicate these mandates will create another bottleneck that restricts the much-needed growth in the skilled trades workforce. These talent shortages not only hurt the small businesses who are looking to fill vacancies, but also drives up prices on regular repairs, remodels, and new constructions.

Price Controls During Declared Emergencies – SB 954 (Moss); 955 (Moss); 956 (Cavanagh)

Senate Bills 954, 955, and 956 propose new price control requirements on businesses during declared emergencies. These bills would apply to hotel and lodging, retailers, and energy providers, respectively, and a 10% increase in prices during a declared emergency would constitute a violation. SBAM shares the sentiment that bad actors should not excessively increase prices in times of struggle, but the 10% increase threshold defined in this act is overly broad and would inhibit the ability of small businesses to respond to regular supply and demand fluctuations during emergencies. Michigan already has a “price gouging” law on the books to target prices found to be “grossly in excess” of comparable property or goods. These excessive new price controls would lead to product shortages, reduced quality of goods, and would disincentive businesses from increasing needed supply during an emergency.

Mandatory Automatic IRA – House Bill 5461 (McFall)

Note: Michigan’s FY 25 budget includes funding to support implementation of this program, contingent on the bill’s passage. It seems that the eventual passage of this bill is likely, but SBAM Advocacy staff is working with relevant partners to try to eliminate mandates from HB 5461 before passage.

House Bill 5461 would implement a new mandate for all employers in Michigan who do not currently offer retirement benefits to their employees. The bill would require employers to facilitate a new state-administered IRA program for qualifying employees. While SBAM acknowledges the importance of retirement savings, our position is that mandates are harmful and costly for small businesses and are not effective solutions. This program provides no additional value or benefit to employees beyond what is already available to them in the private sector and creates a new burden for employers. To the extent that the state wishes to be involved in this space, they should work to provide quality options for small business owners rather than force them to comply with and administer this program.

Mandatory Paid Leave Benefit – Senate Bills 332, 333 (Geiss); House Bills 4574, 4575 (Scott)

While legislators have mostly tabled discussions on paid leave for now, it wasn’t long ago when the Governor and legislative leaders were listing the issue as a top priority. SBAM continues to monitor a particular legislative proposal that would create a new multi-billion-dollar program requiring all employers to facilitate up to 15 weeks of intermittent paid medical leave per year. The program would be funded through a payroll tax, similar to the current unemployment system. This program would not only raise taxes on employers and employees but also move business decisions away from HR departments and business owners, and into the hands of the state government. 

Data Privacy Mandates Senate Bill 659 (Bayer)

Lawmakers have discussed various data privacy requirements throughout this legislative term, but none have gathered significant momentum. Recently, caucus leaders and even the Governor have named data privacy as an issue that could be resolved during lame duck, so it’s important that any wide-ranging policy be fair to small business and not overly burdensome. SBAM has tracked Senate Bill 659 throughout the term, and through the committee process, some of the more harmful aspects of the bill have been removed. Still, in its current form, the bill provides sweeping new power to the Attorney General and creates a divergent enforcement policy from what’s practiced on the federal level. Given the importance of e-commerce and the growing role of the internet in how we conduct business, it is vital that Michigan does not make itself an outlier from other states by adopting overly restrictive data privacy laws.