On December 14, 2018, Governor Rick Snyder signed bills significantly amending Michigan’s Earned Sick Time Act and Michigan’s Minimum Wage Law.  The bills will become effective on March 28 or March 31, 2019, depending on when the current legislative session ends.  To allow enough time to incorporate any necessary changes, employers in Michigan should review their employee compensation and paid time off policies now to ensure compliance with these new requirements.

Minimum Wage Increases

Under the new law, Michigan’s minimum wage will rise from $9.25 to $12.05 per hour by 2030. The minimum wage for tipped restaurant workers will rise to $4.58 by 2030.

Effective January 1, 2019, the new minimum wage will be $9.45 per hour for non-tipped workers.  The minimum wage for tipped workers remains set at 38% of the regular minimum wage.

Paid Sick Time

The new law significantly changes the Earned Sick Time Act.  Highlights of the amended Earned Sick Time Act are as follows:

• Employers with 50 or more employees are required to provide 40 hours of paid sick time annually.  The law contains exceptions for a number of employees, including exempt employees and employees covered by a CBA.
• Employers are permitted to put in place a 90-day waiting period before employees can begin using their paid sick time.
• Employers can prevent employees from carrying over their unused paid sick time if they grant all 40 hours at the beginning of the benefit year, as opposed to using the accrual method set forth in the bill.
• Employees using paid sick leave are required to comply with the employer’s usual and customary call-in procedures, except that employees must be given at least three days to provide medical documentation supporting their absences if the employer requires such documentation.
• Paid sick leave can be taken in one-hour increments, unless the employer has a different increment policy in its handbook.
• There is no private cause of action.  An individual employee cannot sue their employer for a violation of the law. 
• If an employer already provides at least 40 hours of paid time off annually, there is a rebuttal presumption that the employer is in compliance with the law.  This includes paid vacation days, personal days, and paid time off.