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Update on Minimum Wage and Paid Sick Leave

June 21, 2023

The Michigan Supreme Court has decided to hear an appeal to the case challenging the 2018 compromise legislation that moderated the impact of proposals to increase the state minimum wage and apply minimum paid sick leave requirements to small businesses.

Here’s what is at stake:

If the Supreme Court affirms the Appellate Court decision, status quo for paid sick leave requirements and minimum wage remains. This is the outcome SBAM and the Small Business for a Better Michigan is advocating for in court.

If the Michigan Supreme Court overturns the Appellate Court, it would essentially repeal the 2018 compromise legislation. That would have several immediate impacts.

  • The general minimum wage would be immediately increased to $13.03 from the current $10.10.
  • The tipped minimum wage would immediately increase to $11.73 from the current rate of $3.84. In subsequent years it would be further increased to match the general minimum wage of $13.03 (adjusted annually by inflation).
  • The mandatory paid sick leave requirement in current law applies only to businesses with 50 or more employees. The court is considering nullifying that law, meaning employers with fewer than 50 employees would no longer be exempt and have to provide 1 hour of paid sick leave for every 30 hours worked with a minimum of 72 hours per year. For businesses with fewer than 10 employees, the mandatory benefit would carry a minimum of 40 hours of paid sick leave per year. Paid sick leave mandates for businesses with more than 50 employees would not be impacted by this court decision. 

The heart of this decision is not whether or not an increased minimum wage or mandatory sick leave benefits is a good idea. The question is if the legislature can amend laws approved and passed through the constitutional citizen initiated law process. It’s a process question with massive policy ramifications for many small businesses.

Where do we go from here?

SBAM and a broader coalition will actively participate in the legal process of supporting the 2018 compromise and the process used to implement it. As a practical matter, that means we support the Court of Appeals decision being challenged at the Michigan Supreme Court.

Here’s the schedule as we understand it today.

  1. The clock starts ticking today, June 21st as the Michigan Supreme Court granted leave for appeal.
  2. The appellant (the party challenging the current law) has 56 days to file their appeal. So in other words, they have until August 16th at the latest.
  3. The Appellees (the party defending current law) will have up to 35 days to respond. So the appeal and the response to the appeal could come as late as September 20th.
  4. The court has invited amici to file supplemental briefs supporting both sides. This means that SBAM and the broader business community has an open door to participate in the process, and we will.

So in other words, nothing changes immediately. We would expect final resolution on this long saga late in the year. Stay tuned.

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