Staying compliant with the myriad of employment laws is challenging but essential for all businesses. The Michigan legislature made some end-of-the-year changes to a couple employment laws that employers should be aware of.
This article will ensure you’re in-the-know on a recent change to the minimum wage law and a new paid sick leave law.
MI Minimum Wage
The minimum wage in Michigan was scheduled to increase from $9.25 to $10 per hour on January 1, 2019, and then on to $12 over the next 3 years. However, that pace is scheduled to slow down a bit, as a result of a bill passed by legislators and signed by Governor Snyder last week.
Now it’ll be 11 years before we hit the $12 mark. The new MI minimum wage increase chart is as follows:
|Date of Change||Hourly Rate|
|End of March, 2019||$9.45|
|January 1, 2020||$9.65|
|January 1, 2021||$9.87|
|January 1, 2022||$10.10|
|January 1, 2023||$10.33|
|January 1, 2024||$10.56|
|January 1, 2025||$10.80|
|January 1, 2026||$11.04|
|January 1, 2027||$11.29|
|January 1, 2028||$11.54|
|January 1, 2029||$11.79|
|January 1, 2030||$12.05|
When available, the MI minimum wage poster can be printed out from Department of Licensing and Regulatory Affairs (LARA) website.
If you have employees who are making less than the new minimum $9.45 mark, be sure to budget for and then move them to that minimum by the end of March. If you already pay above this, no changes are necessary to comply. However, now is a great time to look at whether your wages are competitive in the marketplace if you haven’t done that in the last couple years.
The labor market is tight, so keeping pace with other employers is critical for retaining good employees and enticing new people to join your team.
The minimum wage law change is straight-forward. Now let’s turn to the issue of paid sick leave, which requires more analysis to make sure your company or organization is compliant.
Paid Sick Leave aka Michigan Paid Medical Leave Act
Although this post can’t cover all the details of the new law, it’ll give you the basics: when, who, and what.
When do we need to do it?
The new Paid Medical Leave Act will be in effect on March 29, 2019.
Who is impacted?
In general, it covers public and private employers with 50 or more employees, excluding the U.S. government, another state, or a political subdivision of another state.
Eligible employees are those individuals engaged in service to an employer and for whom an employer is required to withhold federal taxes. Some employees are specifically ineligible according to the Act. Those individuals include but are not limited to:
- Exempt employees as defined by the FLSA
- Private sector employees covered by a collective bargaining agreement
- Employees whose primary work location is in another state
- Temporary employees who work less than 25 weeks in a calendar year
- Employees who work less than 25 hours per week on average
What has to be provided?
Now that we understand who this applies to, let’s look at what benefits the Act dictates. There are two ways employers can meet their obligations under this law:
- Eligible employees accrue 1 hour of paid medical leave for every 35 hours worked. This can be capped at 1 hour per week and 40 hours per year. There is no obligation to allow employees to carry over more than 40 hours of unused accrued paid medical leave into the next year. Employers can limit the number of hours used per year to 40.
- Eligible employees are given at least 40 hours of paid medical leave at the beginning of the benefit year. The employer can prorate for a partial benefit year for employees who are hired within the year. There is no requirement for employers to allow carry-over of unused time into another benefit year.
Although there can be no waiting period for a new hire to begin accruing time, employers can impose a 90-day waiting period for the time to be used. Some instances of absence when the paid medical leave time can be used by an employee include an employee’s or a covered family member’s mental or physical illness/injury, medical treatment, preventative care and for absences caused by domestic violence or sexual assault of the eligible employee and/or a covered family member, and when an employee’s workplace or child’s school or place of care has been closed due to a public health emergency.
Employees can be required to follow the employer’s normal notice and documentation requirements when requesting leave, but the employer must provide the employee with at least 3 days to produce the documentation.
An employer will be presumed to be in compliance with the Act if it provides at least 40 hours of paid leave to an eligible employee each year. This leave can be in the form of paid vacation days, paid personal days, and paid time off.
Covered employers must post the Paid Medical Leave Act poster. It will be supplied by LARA at no cost.
If you are a covered employer, review your paid leave policies carefully to determine if your current policies cover the individuals required by the law and are at least as generous as what the law dictates.
Remember, the above information only includes highlights of the Act. If you’d like support in ensuring you understand and meet all your obligations, please give us a call today to schedule a time to talk.
What Do You Do?
How does your organization approach the preparation for compliance with new employment laws? You can leave your answer in a comment below.
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