Global Compliance Desk – Michigan
Changes in compliance are continuous and occurring around the globe. At Replicon, our goal is to make sure you’re never a step behind. Recently, there have been some key developments affecting labour & employment compliance in Michigan. Read on as we cover some of the notable changes in detail.
On September 6, 2018, the Michigan State Legislature voted in favor of adopting the minimum wage and paid sick leave proposals. As result, these issues will no longer appear on the November ballot.
The minimum wage proposal passed will increase the state’s minimum wage from $9.25 to $10 beginning January 1, 2019, and ultimately to $12 per hour, per the timeline below:
- Beginning January 1, 2019: $ 10.00
- Beginning January 1, 2020: $ 10.65
- Beginning January 1, 2021: $ 11.35
- Beginning January 1, 2022: $ 12.00
The current version of the proposal defining tipped employees’ reduced minimum wage rate will be phased out gradually. Tipped employees, like wait staff and bartenders, are currently paid $3.52 per hour. If the tips earned do not increase their hourly rate to or beyond the current minimum wage of $9.25, then employers are supposed to make up the difference. The percentage of the general minimum wage that a tipped employee must be paid will increase each year until there is no difference between the tipped and general minimum wage:
- Beginning January 1, 2019: 48%
- Beginning January 1, 2020: 60%
- Beginning January 1, 2021: 70%
- Beginning January 1, 2022: 80%
- Beginning January 1, 2023: 90%
- Beginning January 1, 2024: 100%
Employees in Michigan will be entitled to receive one hour of paid sick leave for every 30 hours worked. The current proposal entitles all employees – full-time, part-time, temporary workers, and independent contractors – to use 72 hours in a year.
As of now, Michigan has no requirements for paid sick leave on the record. The new law would allow Michigan workers to accrue paid sick leave for themselves or to care for family members, including situations of domestic violence and sexual assault.
The rules for small businesses, defined as less than 10 employees working during a given week (including part-time, full-time, and temporary workers), would be slightly different. While these employees would still accrue a minimum of one hour of paid sick leave for every 30 hours worked, they would be entitled to use 40 hours a year instead, unless the employer selects a higher limit. If the employee uses more than 40 hours, the employee would be entitled to use an additional 32 hours of unpaid earned sick time. Employees would use their paid leave prior to using unpaid leave.
Barring any changes, the new laws will go into effect in March 2019.