On September 5, 2018, Michigan’s Republican majority legislature adopted a ballot proposal on paid sick leave. With that step, legislators removed the proposal from the November general election ballot and retained the ability to amend the law with a simple majority vote (instead of the three-fourths vote required to amend a ballot initiative if it were passed by voters in November). The Michigan Legislature has signaled its intent to amend the law before the March 2019 effective date.
The mandatory paid sick leave proposal gives employees one hour of paid sick leave for every 30 hours worked. All employees (full-time or part-time), temporary workers and independent contractors would be entitled to use 72 hours in a year.
However, the impact of this legislation on employers is far broader than providing 72 hours paid hours of sick leave per year to employees. As written, the proposal places severe compliance burdens on employers, including those with paid leave policies currently in place, including:
NO EXEMPTIONS. There are no exemptions for employers with existing paid leave policies or small employers. Leave is available to exempt employees, temps, and independent contractors. All employers will need to adjust their policies.
USE OF TIME. Leave time can be used in the smallest increment that the employer’s payroll system uses to account for absences (as little as six-minute increments).
NO NOTIFICATION. The Act requires seven days’ notice for use of time or, if not possible, “as soon as practicable.” This will provide employees 72 hours of no-notice leave time.
WEAK DOCUMENTATION. An employer can only require documentation after three consecutive leave days. Employers can only request document that sick time is necessary, meaning employers will receive generic and meaningless statements from health care professionals – nothing more.
EMPLOYER PAYS. Employers are responsible for any payment of the employee’s out-of-pocket costs associated with providing documentation.
LITIGATION NIGHTMARE. The Act assumes the employee’s side for unfavorable personnel actions, putting employers in a position of having to defend their decisions in court.
FINES & FEES. Remedies available to employees include reinstatement, attorney fees and all back pay and benefits (doubled as liquidated damages).
CARRY-OVER OF TIME. The Act requires employers to carry-over leave time from year to year, although it doesn’t require the employer to payout for unused time or allow the employee to use more than 72 hours annually.
The combined effect of all these provisions is that employees will have 72 hours per year of paid time off that they can use intermittently without any practical restriction.
The Michigan Chamber is actively lobbying lawmakers to amend the proposal prior to the March 2019 effective date to make it workable for employers and employees. As adopted, this Act is the most punitive and aggressive proposal to be pursued in any state to date, especially as it relates to the small employer definition, accrual rates and lack of carve-outs.
No other midwestern state has adopted a paid sick leave mandate. If enacted, this law will make Michigan an outlier in the Midwest and jeopardize our state’s competitiveness. As written, this Act would have a significant impact on Michigan employers’ payroll costs and hiring and benefit decisions.