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New Laws That Will Take Effect in 2019: Paid Medical Leave Act and Minimum Wage

December 20, 2018

On December 13, 2018, Governor Rick Snyder signed into law the Paid Medical Leave Act (PMLA) and Public Act 368 of 2018 amending the Improved Workforce Opportunity Wage Act, both of which will go into effect on March 29, 2019. These Acts, which had been adopted by the Senate on November 28, 2018, substantially and significantly change the two ballot initiatives regarding paid sick leave and the minimum wage that had been adopted by the Michigan legislature in September 2018.

The Paid Medical Leave Act

The PMLA, formerly known as the “Earned Sick Time Act,” requires employers to pay eligible employees for earned medical leave time, which may be used for personal or family health needs. The following are some highlights of the new law:

  • Employers are subject to PMLA only if they employ 50 or more individuals.
  • Not all employees are eligible to accrue paid medical leave under the new Act. The PMLA contains twelve categories of ineligible workers, including seasonal, temporary, and variable hour workers; part-time employees who worked on average less than 25 hours per week in the preceding calendar year; federal workers; workers whose primary work location is out-of-state; and bona fide executive, administrative, professional and outside sales employees who are exempt from the overtime requirements of the Fair Labor Standards Act.
  • Eligible employees must accrue one hour of paid medical leave for every 35 hours worked, but not more than one hour of paid medical leave in a calendar week.
  • Employers may limit an eligible employee’s accrual of paid medical leave to not less than 40 hours per benefit year.
  • Alternatively, an employer may provide at least 40 hours of paid medical leave to an eligible employee at the beginning of a benefit year.
  • Employers may limit the accrual and use of paid medical leave to 40 hours in a benefit year.
  • Employers are not required to allow an eligible employee to carry over more than 40 hours of unused accrued paid medical leave from one benefit year to another benefit year.
  • Employers are in compliance with this Act if they provide at least 40 hours of paid leave to an eligible employee each benefit year.
  • Employees are required to follow their employer’s usual practice or procedure for requesting leave; however, employers must give employees three (3) days to acquire the proper documentation for medical leave.
  • Paid medical leave will begin accruing on the effective date of the Act; however, employers may require new employees to wait 90 days after the commencement of employment to use accrued time.
  • If an employer violates the Act, an eligible employee may file a claim with Licensing and Regulatory Affairs (“LARA”) within six months.
  • Employers will be required to display a poster at their place of business that includes information on the amount of paid medical leave required to be provided to an eligible employee under the Act, the terms under which paid medical leave may be used and the eligible employee’s right to file a complaint with the department for any violation of this Act. Posters will be provided by LARA at no cost to the employer.

New Minimum Wage Requirements

 The Senate also adopted significant changes to the “Improved Workforce Opportunity Wage Act” which addresses increases to Michigan’s minimum wage. Under the recently signed law, minimum wage will start at $9.45 per hour on March 29, 2019. In following years, effective each January 1, the minimum wage will be as follows:

  • $9.65 in 2020
  • $9.87 in 2021
  • $10.10 in 2022
  • $10.33 in 2023
  • $10.56 in 2024
  • $10.80 in 2025
  • $11.04 in 2026
  • $11.29 in 2027
  • $11.54 in 2028
  • $11.79 in 2029
  • $12.05 in 2030

The yearly increases will not take effect if the state unemployment rate is 8.5 percent or greater for the calendar year preceding the calendar year of the prescribed increase. 

In addition, the new Act strips key components of the ballot initiative that would have abolished the tipped minimum wage in Michigan. Under the new law, the minimum wage for tipped workers will be 38 percent of the regular minimum hourly wage rate.

Michigan’s Mixed Reaction

The legislature’s actions were met with both support by those who believe the changes are necessary to protect businesses and opposition by groups in favor of the ballot initiatives’ original language. Although no lawsuits have been filed, it is anticipated that there will be litigation challenging the Michigan legislature’s ability to adopt and amend legislation in the same session. In addition, on December 3, Michigan One Fair Wage, the citizen-led group that initiated the paid sick time law, announced it would resubmit ballot language to restore the original law, which would go in front of voters in 2020 if approved.

Please contact one of Varnum’s Labor and Employment attorneys if you have any questions about this issue or require assistance in updating your employment policies.

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