Michigan business leaders are pushing state lawmakers to act on five main points they hope will make the upcoming changes to Michigan’s minimum wage and paid sick time laws more palatable for companies.
At a town hall meeting that gathered Tuesday at the Grand Rapids Area Chamber of Commerce offices, business leaders who are seeking changes to new Earned Sick Time Act and minimum wage laws discussed changes they hope legislators make before their limited session days this year expire and the laws take effect in February.
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Those changes include protecting businesses that are already meeting or exceeding mandated paid sick time, exempting small businesses with fewer than 50 employees and certain types of non-full-time employees, changing how paid sick time is allotted to workers, and requiring employees to give advance notice of their absence.
Lastly, business leaders want changes that allow employers to frontload 72 hours of sick leave at the start of the year to give them more control over how sick time is parceled out.
In addition to five key points that they are looking to change, leaders from the Michigan Chamber of Commerce, the Small Business Association of Michigan, the Michigan Manufacturers Association also hope to gain clarity on gray legal areas in the laws.
The upcoming changes, which are set to take effect early next year, include an increase to the hourly minimum wage, which is set to rise from $10.33 to $14.97 by 2028, while the lower tipped wage for servers and bartenders is set to be phased out by 2030.
As well, paid medical leave requirements will be expanded, which business leaders worry will hit small businesses harder than their larger counterparts.
Wendy Block, senior vice president of business advocacy at the Michigan Chamber of Commerce, noted that the paid sick time law has no exemptions, meaning that any business with one or more employees is required to comply.
As well, all employees — regardless of whether they’re full- or part-time, seasonal, temporary or even potentially independent status — are included under the new law, which requires businesses with more than 10 employees to offer an accrual of one hour of paid sick leave for every 30 hours worked, up to 72 hours yearly.
“Another huge problem with the act is how it deals with advanced notice,” Block said. “(According to the act), if an employee’s need for leave is foreseeable, you can require up to seven days advance notice. It does not require any additional notice beyond that seven days.”
However, if the time off is unforeseeable, employees would only be required to give notice as soon as is practicable.
“Now, what does that mean? We don’t know; that term is undefined,” Block said.
This is one of many gray areas that Block said make the upcoming legal changes “as clear as mud” for business owners.
“This law, especially the Earned Sick Time Act, is drafted very sloppily,” she said. “It doesn’t make a lot of sense in a lot of cases.”
As well, provisions accounting for employees taking advantage of sick time laws and whether independent contractors are included in the legal definition of an employee are some of the gray areas that are posing challenges for businesses who will need to comply with the new law.
For business owners, the lack of clarity is a source of frustration as time runs out for them to adjust.
Walid Jamal, president of JHG Restaurant Management LLC that operates four West Michigan IHOP restaurants, said he’s been in meetings with IHOP’s corporate office, the company’s franchise association and IHOP’s legal department to discuss the coming changes to sick time and wage laws.
“Every single one of them had a different interpretation, and not a single one of them gave me an actual solution of how to operate my restaurants within the scope of this act,” he said. “It’s going to be extremely difficult.”
Five changes
While seeking legal clarity, business leaders have put forth a list of five concerns they want state legislators to address.
First on that list is protecting businesses that are already meeting or exceeding the mandated 72 hours of paid sick time.
“If you are already a model employer under this act and provide 72 hours or more to your employees, we do not believe that you should have to change a thing,” said David Worthams, director of employment policy at the Michigan Manufacturers Association. “We think you should just have an outright exception.”
Secondly, business leaders have asked for an exemption for small businesses with 50 or fewer employees, and to exempt certain employees, such as part-time, seasonal employees and independent contractors.
Third on the list is a change in how the time is allotted to employees, and how much advance notice is required.
Currently, the law allows for employees to take their time off in as small an increment as employers track their payroll. Meaning, employers that track their payroll in time increments as small as one, five or fifteen minutes will be required to allot it to employees in increments of the same size.
“(We’d like) to require time to be used in half an hour or half-day increments,” Worthams said. “At the very least, it should be one-hour increments.”
Michigan business leaders also want to see some protection for employers in how notice is handled, and have asked that employees be required to give advance notice of their absence, if possible.
They also want to see changes to wording that provides legal protection for employees who feel their employer has violated the law, putting responsibility on the employer to prove otherwise, and to allow employers to frontload 72 hours of sick leave at the start of the year, giving them more control over how sick time is parceled out.
“As we walk through these five things, we come out about this in a very bipartisan manner,” Worthams said. “There are a lot of folks on both sides who go, ‘Yeah, that makes sense.’”
As for the prospects that legislators will act on the changes, Worthams said that he is “hopeful.”
“I’ve actually been kind of impressed with the conversations that we have, particularly with leadership in the House of Representatives on both sides of that,” he said.
So far, Worthams estimated he and his constituents championing this issue have spoken with half of the members of the Legislature to discuss the effect that the law will have if it goes into effect unchanged.
Kelli Saunders, vice president of policy and engagement for the Small Business Association of Michigan, said that the association has had “overwhelming” feedback from members across the state that they need the Michigan Legislature to work toward a bipartisan fix.
Currently, the Legislature has about nine session days left before the end of the year, and members’ focus has turned primarily toward the upcoming election.
“We’re not here to be confrontational,” Saunders said. “We’re here to work together in order to get this done. Time is not on our side.”
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