Rep. Julie Alexander Response to Minimum Wage Increase

Update: 7/26/22

The Jackson Chamber works in partnership with local, state, and federal representatives to keep our Members updated on public policies and stances that affect their businesses. Due to the recent rulings on the Minimum Wage Increase, we asked Representative Julie Alexander to explain the expected appeals process and resources to express concerns. Her response is below.

July 26, 2022

Dear Neighbor,

Thank you for contacting me regarding the state Court of Claims’ recent decision to declare two Michigan laws regarding minimum wage and paid sick leave unconstitutional. I understand many job providers in our community have questions about what this ruling means, and I will continue to closely monitor this issue as the situation unfolds.

In 2018, the state Legislature approved two plans on minimum wage and sick leave that protected Michigan jobs, state workers and their families, and our struggling economy. The issues were brought to light after out-of-state special interests helped bankroll two poorly written petition drives in our state. The Court of Claims recently ruled the Legislature acted unconstitutionally in passing these bills.

First and foremost, it’s important to note the controversial decision is not yet effective. Most civil judgments are automatically postponed for 21 days to give parties time to appeal. The decision was issued on July 19, so Aug. 9 is the first possible but highly unlikely enforcement date. If and when the enforcement date arrives, Michigan law would revert back to language in the original petition drives.

But there is a very good chance the postponement gets extended well past 21 days. An independent team within the Attorney General’s office — whom we support — has already filed a motion asking the court to postpone the ruling throughout the entire appeals process, which could take several years. In case the court denies the team’s motion, the team has also filed a notice of appeal, allowing it to make the same motion quickly in the Court of Appeals if needed.

Even though the laws in question were enacted in 2018, the current Legislature has been actively engaged with this case from the beginning. We intend to participate as much as possible at the Court of Appeals level, as well as at the state Supreme Court.  In the meantime, I can assure you we will continue to engage with impacted job providers to ensure your concerns and positions are heard.

Thank you again for contacting my office. I always encourage your feedback on important issues, as that helps me be an effective representative for our community at the state Capitol.

Sincerely,

State Representative Julie Alexander

64th District

Update on Minimum Wage Increase

Update: 7/21/22

Below is an update regarding the minimum wage, tip wage, and sick time changes happening at the State Level.

Craig Hatch, President & CEO of the Jackson Chamber, also posted an update on Facebook this morning. You can watch that HERE.

Tuesday night, Court of Claims Judge Douglas Shapiro ruled that the adopt-and-amend strategy that was utilized during the 2018 legislative session for the Minimum Wage and Paid Sick Leave ballot proposals was unconstitutional and that the laws that were adopted before being amended are now in effect. As a reminder, the legislature amended each of the two proposals, making them more tenable for the businesses required to implement them.
 
What does this mean?
While it is unclear at this time what the requirements are for implementation based on this ruling, a 21-day moratorium on the ruling exists, preventing its implementation until August at the very earliest. A summary of the two ballot proposals from 2018 that may be implemented as originally adopted by the legislature are as follows:

  • Minimum wage would be set at $12 per hour; the tipped minimum wage would be set at $9.60 (80% of full minimum wage). In 2023 the minimum wage would be adjusted based upon inflation and the tipped minimum wage would increase to 90% of the full wage and then match it in 2024 and thereafter.
  • Virtually every employer in the state, regardless of size, would be required to provide 1 hour of paid sick leave for every 30 hours worked (capped at 72 hours for employers with more than 10 employees and capped at 40 hours for employers with less than 10 employees).

What is next?
The state’s assistant attorney general leading the constitutionality argument filed a Motion for Stay on Wednesday afternoon, which would delay implementation of the ruling until all appeals have been exhausted if it is granted. The MRLA, through a quote from Justin Winslow picked up in the Detroit News, was referenced specifically in the motion to demonstrate the chaos and fallout that would ensue if the ruling were to be immediately impacted. If the stay is granted, it would essentially hold in abeyance implementation of the 2018 ballot proposal language detailed above until all legal appeals have been exhausted.

Source: Michigan Restaurant & Lodging Association Newsletter, published 7/21/22

Immediately Increasing Michigan’s Minimum Wage

Update: 7/20/22

The MLC has sent out an important update to Michigan’s minimum wage, tip wage and establishing earned sick time. In an effort to update our Membership, we want to make sure you are aware of this change.

See the press release from the Michigan Legislative Consultants (MLC) below. We are speaking with our Public Policy & Advocacy Committee about what the Chamber’s role is on this matter.

Court Rules to Reinstate 2018 Citizens’ Initiated Law – Immediately Increasing Michigan’s Minimum Wage, Tip Wage and Establishing Earned Sick Time 

Late today, the Michigan Court of Claims ruled that the legislature’s 2018 “adopt and amend” strategy was unconstitutional and therefore, the state’s current minimum wage, tip wage, and paid medical leave laws are void and will be replaced with the 2018 citizens’ initiative ballot language. While an appeal of today’s decision is expected, the court’s decision was lauded by Attorney General Dana Nessel and many groups that lead the 2018 citizens’ initiative ballot drive. 

Background:
In 2018, after collecting enough signatures, two citizens’ initiatives were headed for the ballot when the legislature voted to approve of both in order to keep them off the ballot, where they would have likely been supported by voters. Soon after, the Michigan Legislature introduced two bills to amend and greatly reduce the impact of the citizens’ initiative which would have significantly raised the state’s minimum wage, required the tip wage by 100% of the minimum wage by 2024, and established an earned sick leave statute.

Based on today’s Court of Claims decision, the following is an overview of what will be instituted immediately:

Minimum and Tip Wage:
The first citizens’ initiative raised the minimum wage incrementally to $12/hour by January 1, 2022.  Beginning January 1, 2023, and on January 1 of each following year, the wage is adjusted by the rate of inflation with no cap. 

The tip wage was also increased incrementally – beginning January 1, 2022, it is 80% of the minimum wage; January 1, 2023, it will be 90% of the minimum wage; and starting on January 1, 2024, it will be 100% of the minimum wage.

Under the law that was voided by the court today, the minimum wage of $12.05/hour wouldn’t have been reached until 2030 and the tip wage was set at 38% of the state’s minimum wage.

Paid Sick Time:
The second citizens’ initiative expands the state’s earned sick time laws. It created the Earned Sick Time Act, providing workers with one hour of sick leave for every 30 hours worked, capped at 72 hours per year. 

While the outcome of the decision and the next steps to challenge the decision are currently unknown, MLC will provide additional updates as we learn more. 

Source: Michigan Legislative Consultants Insider Intelligence, published 7/19/22

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