Michigan: Statewide Paid Sick, Minimum Wage Increases on the Horizon
All Employers with MI Employees
April 1, 2019
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On September 5, 2018, the Michigan Legislature adopted the Earned Sick Time Act (ESTA) and the Improved Workforce Opportunity Wage Act (IWOWA). These bills introduce statewide paid sick and safe time as well as annual minimum increases, following closely in the footsteps of other states with paid sick and safe time (“PSST”) laws, though with some differences in policy.
Earned Sick Time Act
Key provisions of the ESTA include the following:
- Effective Date: Approximately April 1, 2019 (subject to change if the Michigan Legislature adjourns earlier)
- Covered Employees: All employees of an eligible employer.
- Employers: All private employers of one or more individuals, with different compliance requirements for small employers with 9 or fewer employees.
- Exemptions: Employees covered by a valid collective bargaining agreement until the CBA expires.
- Usage: Employees may use PSST as it is accrued. Employees hired after April 1, 2019 may be required to complete 90 days of employment before using PSST. Further, Employees who work for an employer with a headcount of nine or fewer may use up to 40 hours of PSST per year, with the remaining 32 hours available as unpaid time off. Employees who work for an employer with a headcount of 10 or greater may use up to 72 hours of PSST per year.
- Leave Amounts:
- Accrual Rate: One hour per 30 hours worked.
- Cap: No annual or overall cap currently indicated.
- Carryover: All accrued leave carries over from year to year.
- Recordkeeping and Notice Requirements:
- General Notice: Employers must provide a written notice of an employee’s rights under the act, including information about how leave will be provided, how the employer calculates the “year” period, and prohibition of retaliatory actions. This notice needs to be provided by April 1, 2019 or at time of hire, whichever is later.
- Workplace Posting: Employers must display a workplace poster in a conspicuous location in English, Spanish, and any language that is the primary language spoken by at least 10% of the workforce, if the department has provided the poster in that language.
- Recordkeeping: Employers must retain records documenting hours worked and accrued/used leave for a period of three years.
- Employee Notice: Employees may request PSST as needed. Employees should provide notice of usage of PSST seven days in advance, or as soon as practicable. Employers can request reasonable documentation that PSST was used for an applicable purpose after three consecutive days of absence, and employers are responsible for payment of any out-of-pocket costs associated with obtaining the medical documentation supporting use of PSST.
The Improved Workforce Opportunity Wage Act
IWOWA implements an annual minimum wage increase as follows:
|IWOWA Effective Date (likely April 1, 2019)||$10.00|
|January 1, 2020||$10.65|
|January 1, 2021||$11.35|
|January 1, 2022||$12.00|
|January 1, 2023+||Variable depending on rate of inflation as calculated by state treasurer beginning October 2022 and annually thereafter|
In addition to increasing minimum wage, the IWOWA also phases out lower minimum wage for workers who receive gratuities and prohibits voluntary tip pooling. Instead, the minimum hourly wage paid to workers who receive gratuities will be gradually increased until it matches the Michigan minimum wage by January 1, 2024.
- Prepare for implementation of the new PSL requirements, including having employee handbooks, policies, and payroll practices updated.
- Have managers trained on PSL use and notice requirements.
- Review payroll procedures and labor budgeting for increased minimum wage.
- Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.
© 2018 ManagEase
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