On Wednesday, July 17, 2019, at 9:30 a.m., Varnum snagged one of the few remaining seats in the Michigan Supreme Court gallery to hear oral arguments related to the constitutionality of the Michigan Legislature’s “adopt and amend” maneuver last fall. As you may remember, in 2018 the Michigan Legislature adopted and amended two ballot initiatives related to minimum wage increases and paid sick leave in the same session, rather than let the initiatives go to the voters. These new laws, particularly the Paid Medical Leave Act, have created confusion and consternation for employers. Following is a summary of what has occurred since the adoption and amendment of those initiatives, the issues raised for the Michigan Supreme Court’s consideration at the July 17 hearing, and possible outcomes and advice for employers in the wake of these recent events.
Timeline of Events
- September 2018: The Michigan Legislature adopts the two ballot initiatives governing paid leave and the minimum wage so that these initiatives do not appear on the November 2018 ballot.
- December 2018: The Michigan Legislature passes a revised version of the paid sick leave law reducing the amount of available paid leave and reducing the number of employees eligible to receive the benefit as well as the number of employers required to provide paid sick leave. The Legislature also passes a revised version of the minimum wage law that reduces the amount of current and future increases in the minimum wage. The Paid Medical Leave Act (PMLA) and new minimum wage law are signed into law by Governor Snyder.
- February 2019: Newly-elected Attorney General Nessel announces that the Attorney General’s office will consider issuing an opinion on the constitutionality of the Legislature’s “adopt and amend” tactic. Soon afterwards, the Michigan GOP files a request for an advisory opinion from the Michigan Supreme Court, and Attorney General’s office announces it will not issue an opinion while the issue is pending in the courts.
- July 2019: The Michigan Supreme Court holds a hearing regarding the constitutionality of the “adopt and amend” strategy that resulted in the PMLA and minimum wage laws currently in effect.
Recapping the Hearing
Throughout the July 17 hearing, the Michigan Supreme Court sought to answer the following questions:
- Does the court have the authority to issue an advisory opinion after the effective date of the two acts?
- If so, should the court grant the Legislature’s request to issue an advisory opinion on the constitutionality of the Legislature’s actions?
- Were the amendments to the two acts enacted in compliance with the Michigan Constitution?
The parties arguing in support of the Legislature’s actions identified the following remedies for persons unhappy with the new laws: (1) seek a new ballot initiative; (2) vote the current legislative representatives out of office, (3) amend the Michigan Constitution; or (4) file a lawsuit in the Michigan Court of Claims. Those parties who felt that the Legislature’s actions were unconstitutional argued that the appropriate remedy would be to have the PMLA and the new minimum wage laws revert back to the original ballot language that was much more employee-friendly, or put the original ballot proposals to a vote by the people.
At the conclusion of the hearing, the Michigan Supreme Court did not announce whether it would issue an advisory opinion on these constitutional issues. If the court cannot arrive at a consensus on the proper course of action, it may decline to issue an advisory opinion on these issues altogether, which may lead to a protracted court battle.
What Comes Next: Possible Outcomes and Practical Advice for Employers
Putting aside the various legal theories, it is vital for employers to understand that the PMLA and new minimum wage laws are the current law of Michigan and employers must continue to comply with both laws until notified otherwise. The Michigan Supreme Court has three possible options:
- Option 1: The Michigan Supreme Court issues an advisory opinion finding that the Michigan Legislature acted unconstitutionally in passing the PMLA and the new minimum wage law:
- Impact: Litigation likely seeking a declaration that the amendments are unconstitutional.
- Option 2: The Michigan Supreme Court issues an advisory opinion finding that “adopt and amend” is constitutional:
- Impact: There would be no immediate impact. Litigation may be filed to challenge the Supreme Court’s determination.
- Option 3: The Michigan Supreme Court declines to issue any advisory opinion at all:
- Impact: Litigation likely to challenge the constitutionality of “adopt and amend”, or the Attorney General’s office could issue an opinion on the same subject.
Bottom line? Stay the course for now. At this point, nothing has changed and an advisory opinion regarding the “adopt and amend” tactic will not immediately change the laws currently in effect.
Here are three key steps employers should take while waiting for the Michigan Supreme Court to render a decision:
- Review your current employee handbook and policies to ensure they are compliant with the current Paid Medical Leave Act and minimum wage law.
- Review the original ballot initiatives language so you are familiar with them in the event that they are somehow resurrected in the future.
- Make sure you have clearly communicated your paid leave policies to your employees and have posted the various notices required by the current PMLA and minimum wage law.
Varnum’s labor and employment team is available to assist should you have any questions about the PMLA, the current minimum wage law, and/or steps employers can take to ensure compliance in the future. Please contact one of Varnum’s attorneys if we can be of help in navigating these issues.