Paid Sick Leave Bills Introduced
Legislative Democrats introduced legislation that would mandate employers to provide paid sick leave and could lead to added costs and administrative burdens for your business.
Senate Bill 212 (Senator Jim Ananich, D-Flint) and House Bill 4307 (Representative Stephanie Chang, D-Detroit) would require employers to allow employees to accrue 1 hour of paid sick leave for each 30 hours worked, up to a 40 hour maximum for employers with 10 or fewer employees and up to a 72 hour maximum for all other employers.
While we recognize that many MMA members offer paid leave programs, the devil is in the details for this proposal. The bills include a host of concerning provisions, including a private right of action, a rebuttable presumption of violation against employers, requirements regarding personnel policies, record retention mandates and more.
SB 212 has been referred to the Senate Commerce Committee and HB 4307 has been referred to the House Commerce and Trade Committee. MMA remains in contact with the chairs of these committees and will keep you updated with developments.
Are Your Safety Procedures Violating the New Rules?
All MMA members should be aware that the new MIOSHA Recording and Reporting of Occupational Injuries and Illnesses rule that became effective on January 1 also has some additional implications that may require some review of your company's procedures. The new rule requires employers to inform their workers of the right to report work-related injuries and illnesses and clarifies that an employer must have a reasonable procedure for reporting work-related injuries that does not deter or discourage employees from reporting. The federal interpretation of a "reasonable procedure" for reporting work-related injuries has tremendous implications for employers.
In October, OSHA issued an interpretation of the requirement for employers to have a reasonable procedure for reporting work-related injuries. They later posted additional information about how the rule would be applied. According to these OSHA guidance documents, employers' internal policies must be designed so as not to discourage employees from reporting injuries and illnesses.
OSHA identified 3 areas which would discourage employees from reporting, thus violating the requirement for a reasonable procedure:
- Discipline: While employers may discipline employees for violating safety rules, they cannot discipline employees for reporting a work-related injury or illness. A violation will be determined by looking at how the discipline policy is applied to all employees as compared to those that report a work-related injury or illness.
- Drug and Alcohol Testing: The interpretation states that employers must have an "objectively reasonable basis" for drug testing employees who report work-related injuries or illnesses. A violation will be determined by looking at whether the employer had a "reasonable basis for believing that drug use by the reporting employee could have contributed to the injury or illness." It goes on to note that "the general principle here is that drug testing may not be used by the employer as a form of discipline against employees who report an injury or illness, but may be used as a tool to evaluate the root causes of workplace injury and illness in appropriate circumstances."
- Incentives: The interpretation indicates that, while employers may have safety incentive programs, they may not take adverse action against employees because they report work-related injuries or illnesses. Our contacts at MIOSHA have directed us that this difference can be satisfied by basing incentives on "leading data", such as number of safety meetings held or compliance with safety rules, rather than "trailing data", such as reportings or injury incidents.
Enforcement of these provisions had been delayed because of a suit filed in the US District Court in Texas. However, the judge refused to extend the stay so MIOSHA field staff is now applying the guidance provided by OSHA in their inspections.
Nationwide Injunction on DOL Overtime Rule
MMA received the following information from our partner, the National Association of Manufacturers, regarding a recent change to the Department of Labor's Overtime Rule:
Last night, U.S. District Court Judge Mazzant issued a nationwide injunction preventing the implementation of the Department of Labor’s Overtime Rule previously set to take effect on December 1. The Court found that the Department of Labor had likely exceeded its statutory authority in setting a salary threshold higher than necessary to exempt “any employee employed in a bona fide executive, administrative, or professional capacity.” Because the current salary threshold increase was unlawful under the plain meaning of the statute, the Department of Labor “also lacks the authority to implement the automatic updating mechanism.”
While the Department of Labor is likely to appeal the decision, the timing is such that the fate of the overtime rule is now in the hands of the 115th Congress and the incoming Trump Administration. Until this rule is officially withdrawn by the Department of Labor or no appeal of the case is sought, it could come back again with an unfavorable ruling on appeal. The NAM will continue to advocate with policymakers in Congress and on the transition team about the excessive costs of $24 billion over the next 10 years to implement this rule.
The NAM issued a press release on the decision which can be found here.
The full text of the District Court’s decision can be found here.
Michigan’s Pure Premium Rate is Best in the Midwest
Michigan manufacturers continue to see gains in competitiveness resulting from MMA-driven reforms passed in 2011 as the Michigan Workers’ Compensation Agency (WCA) announced the state’s workers’ compensation pure premium rate will drop another 9.3 percent in 2016. Michigan is the only state in the Midwest to have seen such a steady cost-saving trend in workers’ compensation costs and the state’s 39 percent decrease since 2011 places Michigan among the top five states in the nation.
The pure premium rate is a key factor in determining a job provider’s overall expenses for workers’ compensation and its cumulative reduction since 2011 will result in an estimated $390 million in savings for Michigan employers.
The MMA commended Governor Rick Snyder and the bold steps taken to improve the competitiveness of Michigan’s business climate.
“This is great news for Michigan and more evidence that Michigan’s reinvention is successful in helping Michigan companies thrive in a globally competitive environment,” said Chuck Hadden, MMA president and CEO. “I continue to hear from my counterparts around the nation and they are envious of Michigan’s efforts to reduce costs for job providers. Manufacturers can reinvest this cost savings in their workforce, in new equipment and in facilities right here in Michigan.”
While Michigan continues to see great progress in its pure premium rate, the national average has increased by 7.1 percent since 2011.
“The cost-savings we’re seeing today is directly related to two things: strong safety-focused cultures in today’s advanced manufacturing sector and the sweeping reforms to the workers’ compensation system driven by MMA and signed by Governor Snyder in 2011,” said Hadden. “We’re protecting workers, strengthening our employers and making Michigan a more competitive state.”
Contact Delaney McKinley, MMA director of human resource policy and membership development, at 517-487-8530 or email@example.com, with questions.
U.S. DOL Overtime Rule Threatens Manufacturing Careers with New Threshold
Beginning 12/1/16, workers whose yearly income is at or below $47,476 will be legally entitled to additional compensation for any time worked above 40 hours a week, more than doubling the previous level of $23,660. The U.S. Department of Labor proposed the rule, which some national business groups are calling a “career killer,” last year and released the final ruling on Tuesday, 5/17/16.
“Manufacturers take pride in offering entry level jobs that turn into management jobs, but what the administration paints as a pay raise for millions of workers could limit those options for many who strive to be part of management,” said Rosario Palmieri, vice president of labor, legal and regulatory policy for the National Association of Manufacturers. “Time and resources that could be spent on creating jobs and opportunity will now be used in efforts to comply with this rule.”
As currently constructed, the DOL’s final rule would make the following changes to current regulations:
- Increase the salary level under which overtime would be required from $455/week to $913/week or equal to the 40th percentile of full-time salaried workers in the lowest-wage Census region (currently the South)
- Increase the Total Annual Compensation Level for highly compensated employees from $100,000 annually to $134,004
- Begin automatic adjusting periods every three years
- Allow for 10% of the standard salary level determination to come from non-discretionary bonuses, incentive payments and commissions
MMA urges all members to go to www.protectingopportunity.org for more on the impact of this final overtime rule on manufacturers and businesses in Michigan and across the country.