This article appeared in the July 2018 issue of MiMfg Magazine. Read the full issue and find past issues online.

Manufacturers are among Michigan’s leading providers of employee benefits, yet a proposed mandated paid leave ballot initiative scheduled for November’s General Election could stop Michigan’s economic momentum in its tracks.

The Michigan Paid Sick Leave Initiative, financed by out-of-state interests, would appear on the 11/6/18 ballot as an indirect initiated state statute. It would mandate all employers (except the federal government) provide employees with 72 hours of paid sick time — employees of small manufacturers (fewer than 10 employees) would be required to provide 40 hours of paid and 32 hours of unpaid leave. This employer mandate would be the most onerous and restrictive paid leave proposal in the country. Even California’s law doesn’t go this far.

This threat demands the attention of all manufacturers. Here are seven top reasons to oppose this potentially devastating Mandated Paid Leave initiative:

1. Michigan Becomes Uncompetitive
   The proposed Mandated Paid Leave initiative represents the most restrictive, most stringent, most anti-competitive sick leave policy in the country, forcing employers to pay for a new benefits package and threaten the operational integrity for all Michigan businesses. If Michigan mandates higher employment costs than other states and other global markets, Michigan companies will become uncompetitive to sell their products.
2. Widespread Impact
   Manufacturers are not the only employers subject to the impact of this proposal — other businesses, state and local government, schools, hospitals, non-profit charities, labor unions and others will be harmed. Additionally, ALL small businesses other than the self-employed and the federal government would be affected; driving up costs and threatening the very livelihoods of thousands of Michigan workers.
3. The Cost of Litigation
   Employers will face a new private civil cause of action mechanism, increasing the cost of employee litigation and state agency penalties. The high cost of litigation and the threat of added court costs would damage Michigan’s much improved business climate. Constraints to Workplace Flexibility A common practice among small businesses is asking employees to secure replacement workers for time they need to take off. The Mandated Paid Leave proposal would make that flexibility a violation of the law, subject to penalties and a civil cause of action. This prohibition would significantly hinder the employer-employee relationship and expose manufacturers to new liability risk.
4. Burdensome Bureaucratic Red Tape
   Another government mandate would result in a new level of bureaucratic red tape and additional administrative costs on manufacturers, making operating in Michigan more difficult. Even the smallest of small manufacturers would be hit with costly new recordkeeping requirements as claims can be made “…at any time within three years after the violation or the date when the employee knew of the violation, whichever is later…”
5. Confusing Definitions
   Because the burden of proof falls on the employer, the broadened definitions of “family member” to include any individual “related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” This level of vagary makes it virtually impossible to dispute a paid leave claim. Most of these disputes will only be settled by litigation at great expense to an employer.
6. Guilty Until Proven Innocent
   The low threshold for claiming paid time off under this proposal hurts business of all sizes and particularly small businesses that lack the resources to engage in long-term paper chases. This is a direct assault on small manufacturers that lack a dedicated HR department to respond to unfounded allegations by an insubordinate employee attempting to take advantage of the proposal’s generous provisions. The employer is effectively “guilty until proven innocent” and must expend time and resources to prove otherwise.

Any law passed on a statewide ballot cannot be changed by the Legislature without a three-fourths supermajority. If manufacturers are unsuccessful in halting this government mandate it will become law and will be nearly impossible to overturn even after business growth and job creation falter. MMA is actively opposed to this proposal.

About the Author

Mike Johnston serves as MMA’s vice president of government affairs. He may be reached at johnston@mimfg.org or 517-487-8554.

*Paid for with regulated funds by the Michigan Manufacturers Association 620 South Capitol Avenue, Lansing, MI 48933 Authorized by Small Business for a Better Michigan