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Michigan Law: No new local living wage or benefit laws for employers to contend with

July 17, 2015

By Michael J. Burns, courtesy of SBAM Approved Partner ASE

The State of Michigan has passed a law prohibiting municipalities from passing local wage and hour and benefit requirements. In doing so Michigan has joined several other states in pre-empting local benefits and wage ordinances. They include Arizona, Indiana, Oklahoma, Florida, Kansas, Montana, Missouri and Alabama.

Municipalities around the country have been setting their own minimum wage/benefit rules since the 1990s. Some large cities that have enacted such laws include Los Angeles, San Francisco, Oakland and San Diego in California, Seattle, Santa Fe (New Mexico), Chicago, and Louisville, Kentucky. New York City and Washington D.C. currently have proposals on the table to do the same thing.

California’s experience is instructive of the kind of pattern that Michigan’s law and other state laws are designed to head off. According to the National Employment Law Project (NELP), a minimum wage advocacy group, not only the four major cities named above have such laws; but several other mid-size and smaller California cities (San Jose, Mountain View, Sunnyvale, Berkeley, Richmond, Emeryville, and Davis) have also enacted or are considering enacting such laws.

The genesis of Michigan’s law was that several municipalities became concerned that the state and federal minimum wage rates were too low and the state and federal political leaders were never going to raise them. So they began passing new, higher minimum wages directed at employers doing business with the city and later aimed at employers and employees that did business in the city. The idea of higher minimum wages caught on and began to spread. Currently there are six entities in Michigan that have passed living wage ordinances – Ann Arbor, Detroit, Ferndale, Warren, Ypsilanti and Ypsilanti Twp. Under the new law these ordinances are grandfathered in, i.e., their ordinances will stay in place. However there will be no new such ordinances.

Effective July 14, 2015 in addition to prohibiting local minimum wage rates, the law prohibits local governments from doing the following:

  • Regulating information an employer must request, require or exclude on an employment application form (except that it would not prohibit criminal background check requirements in connection with receipt of a license or permit from the local governmental body)
  • Regulating work stoppage or strike activities of employers and employees or the means by which employees may organize
  • Requiring an employer to provide an employee with paid or unpaid leave time
  • Regulating hours and scheduling that an employer would be required to provide to employees (this would not impact local governments from limiting the hours that a business may operate, however)
  • Requiring an employer or its employees to participate in any educational apprenticeship or apprenticeship training program that is not required by state or federal law.
  • Requiring an employer to provide to an employee any specific fringe benefit or any other benefit for which the employer would incur an expense
  • Regulating or creating administrative or judicial remedies for wage, hour or benefit disputes.

This new law would not prohibit a local government from negotiating other non-wage and benefit terms and conditions under either voluntary agreement with the contractor or in connections with receipt of a grant, tax, abatement or tax credit.

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