This article appeared in the March 2020 issue of MiMfg Magazine. Read the full issue and find past issues online.
Over the last two years, MMA and member companies have worked to mitigate efforts to saddle Michigan with the nation’s most extreme, anti-competitive paid sick leave law. Thanks to strategic industry advocacy in the fall of 2018, the Legislature adopted vital changes to a voter-initiated ballot proposal funded entirely by out-of-state dark money interests. After removing the most damaging provisions, then-Governor Rick Snyder signed the new Paid Medical Leave Act (PMLA) into law, effective 3/29/19.
One year later, the Act’s constitutionality remains in question and a new ballot proposal threatens to propose onerous and costly mandates. Here’s a brief update on what you need to know:
Understand the Essentials of PMLA Compliance
- Covered Employer: Companies employing 50 or more
- Eligible Employee: An individual for whom the Covered Employer withholds for federal income tax purposes and who is not specifically exempted from the Act
- Leave Benefit: Covered employers must provide 40 hours of Paid Medical Leave to eligible employees within a benefit year.
- Waiting Period: An employer may require new hires to wait 90 days to use Paid Medical Leave.
- Method of Provision: Employers can provide required Paid Medical Leave either through Accrual (one hour for every 35 hours) or Frontload (all 40 hours at the beginning of a Benefit Year).
- Time Increments: Paid Medical Leave must be used in one-hour increments unless the employer has a different policy in writing.
- Violations: Eligible employees have 6 months to file a complaint with the Michigan Wage & Hour Division. If a violation is found, employer will have to pay Paid Medical Leave improperly withheld and an administrative fine of up to $1,000.
- Rebuttable Presumption: A covered employer that provides 40 hours of paid leave of any type to Eligible Employees is presumed to be in compliance with the Act.
The proponents of the original initiative, MI Time to Care, publicly argued that the Legislature did not have the constitutional authority to amend the adopted initiative within the same legislative session. Soon after the PMLA was signed, Attorney General Dana Nessel was asked to opine on its constitutionality. The Legislature, confident in its actions, filed a request to the Michigan Supreme Court (MSC) to eliminate any uncertainty, effectively barring the Attorney General from issuing an opinion while the court deliberated. Following oral arguments in the summer of 2019, the MSC decided on 12/18/19 to not issue an advisory opinion on the constitutionality of the Act’s passage.
As a result, Michigan’s PMLA remains the current law of the land. Manufacturers should continue to do everything they can to properly comply with the Act while remaining engaged with MMA to stay up-to-date on developments which may impact employer policies.
“While certain Michigan employers must now provide paid sick leave to some employees, Michigan’s Paid Medical Leave Act is something that aligns with federal law, allows for flexibility, respects the employer/employee relationship and keeps Michigan employers competitive,” said Delaney McKinley, MMA senior director of government affairs and membership. “Unfortunately, while December’s court ruling was more favorable to manufacturers than some of the alternatives, the debate isn’t over.”
Potential Next Steps
It is possible that Attorney General Nessel could opine that the PMLA is unconstitutional which, while only being binding on state government, would create significant disruption for Michigan employers and likely result in a long, arduous and costly court battle.
The proponents of the original initiative have already filed a new petition with Michigan’s Bureau of Elections but it remains to be seen if this out-of-state effort will commit the resources necessary to move forward on their ballot effort in November.
“Taking a step backward on paid sick leave and reverting back to the original 2018 ballot language would all but guarantee Michigan the status of most uncompetitive in the nation,” said McKinley. “Our state’s largest job creating sector would be overrun with administrative nightmares in timekeeping and recordkeeping and would be subject to countless frivolous lawsuits, bureaucratic investigations and unfair penalties.”
Make sure your company is compliant and in the know on any potential changes. To stay informed on this and related issues concerned members should:
- Join the MMA Employment & Workforce Policy Committee to provide input and access the most current information on employment policy
- Subscribe to MMA’s MFG Voice e-newsletter for weekly updates to employer issues
- Watch the webinar produced last year as the Act went into effect for practical insights to help your company comply with the PMLA. Miller Canfield’s Kurt Sherwood and MMA’s Delaney McKinley cover the scope of the PMLA and your obligations as an employer (available exclusively to members in the Online Learning Center)
- Contact MMA’s Delaney McKinley with any questions at firstname.lastname@example.org or 517-487-8530.