In a nutshell

• The Michigan legislature adopted a citizen-initiated petition providing for paid sick time in September 2018 and, in a controversial “adopt and amend” strategy, enacted a separate law thus watering down the provisions in the original law.
• A recent Court of Claims ruling has found this strategy unconstitutional and reinstated the law as originally enacted. If a stay or appeal is not granted, employers will have to begin providing more paid sick time benefits to more types of employees in a few short weeks.
• Increased paid sick time will affect public health and the economy. The COVID-19 pandemic has highlighted the need for sick time. At the same time, for businesses this will increase operating and administrative costs.

In 2018 Michigan became the 11th state to enact a paid sick time law. Michigan’s law began as a citizen-initiative petition, enacted by the legislature per the state Constitution. However, the Republican-led legislature, employing a controversial “adopt and amend” strategy, enacted a separate law that amended the citizen-initiated law modifying key provisions included in the original law. A recent state Court of Claims opinion has held that this strategy is unconstitutional. 

So, what does that mean for businesses and workers in Michigan?

“Adopt and amend” briefly explained

Four years ago petition signatures were collected with the hope of putting the Earned Sick Time Act law on the ballot for statewide voters to consider at the November 2018 general election. Instead, the Republican-controlled legislature, when presented with the petition, adopted it in September 2018. However, before the initiated law took effect, the legislature passed a separate law, by a simple majority vote in both chambers, to modify a number of the key provisions of the original law. If the initiated law had made it to the ballot and been adopted by voters, it would have required a supermajority vote of the legislature to amend. 

This tactic became known as “adopt and amend” and allowed the legislature to effectively amend the original citizen-initiated law during the same legislative session, despite a constitutional provision against doing so. In effect, the strategy allowed the legislature to circumvent Article II, Section 9 of the Michigan Constitution, which states “any law proposed by initiative petition shall be either enacted or rejected by the legislature without change or amendment” (emphasis added). Another citizen-initiated petition, which was originally enacted to raise the minimum wage to $12 an hour by 2022 and raise the hourly wage for tipped workers, was given the same treatment. 

This “adopt and amend” strategy was controversial at the time and a major legislative issue during the 2018 lame-duck session – that post-election time during which many legislators are voting in their last days as elected officials. The Republican legislative strategy appeared to be in conflict with a 1964 opinion by then-Attorney General Frank Kelley. It held that adopting and amending an initiative in the same session would violate the “spirit and letter” of the Constitution. However, prior to engaging in the strategy, Republican legislative leaders received a new, contradicting opinion on the matter from then-Attorney General Bill Schuette holding “adopt and amend” as constitutional. 

Now, the Michigan Court of Claims has weighed in, siding with the Attorney General Frank Kelley’s 1964 opinion stating that 

Were the Court to adopt the state’s argument, it would mean that anytime a simple majority of the Legislature opposed the content of an initiative, it could, by legislative sleight-of-hand, prevent the initiative from ever becoming law without ever allowing the People to vote on it…While the Legislature has the power to pass, amend, and repeal statutes, that power does not authorize it to do so in a manner that destroys the People’s right to initiative defined in the Constitution.

Paid sick time as enacted

Under the initiated law, Michigan will provide up to 72 hours of paid sick time (40 hours paid and 32 hours unpaid for small businesses with fewer than 10 employees) for all employees, other than those who work for the federal government. The law was written to cover all types of employees – part-time, per diem, and temporary. This is not the case in other states with paid sick time laws. 

The enacted law allows paid sick time to be used for many purposes – employees’ and family members’ health care needs, services required due to domestic violence or sexual assault, some types of school meetings, and closures due to public health emergencies. It also defines family members quite broadly.

Paid sick time as amended

The amended law greatly watered down the provisions. It allows employees to accrue one hour of sick time for every 35 hours worked up to 40 hours total. It exempts employers with fewer than 50 employees and provides additional exemptions (e.g., individuals exempt from overtime requirements, etc.). It also does not include domestic partners as family members and disallows school meetings as an allowable use of paid sick time.

The amended law brings Michigan’s more in line with other states in both hours granted and exemptions. About half of the states with paid sick time laws allow benefits for domestic partners.   

The current status of paid sick time law

Notwithstanding an appeal of the claims court ruling, it reinstates the paid sick time initiative as originally enacted, requiring Michigan to provide more paid sick leave for more types of workers (additionally, it reinstates the minimum wage initiative requiring an increase to $12 an hour, above the current $9.87). 

The positive impact of paid sick time on public health cannot be ignored. Some health-related organizations (e.g., the American Medical Association and the American Public Health Association) have adopted policies to support or recognize the benefits of increased access to paid sick time and have posited that lack of access can result in the spread of infectious diseases; delayed health screenings, diagnoses, and treatment; and adverse consequences to public health in general.  

The COVID-19 pandemic illustrated the benefits of paid sick time. Efforts to contain spread of the virus encouraged those that tested positive, regardless of their symptoms, to quarantine. Those caring for symptomatic loved ones also needed to miss work. For many workers, taking the time to follow this guidance or provide care jeopardized their employment. 

On the other hand, this ruling comes as many in the service industry are still recovering from impacts of the COVID-19 pandemic combined with widespread labor shortages and high inflation. However, it is important to note that there is debate over the impact of paid sick time laws on business costs and productivity. Advocates claim that paid sick time laws provide cost savings that arise from greater workforce and income stability, increased productivity, disease and illness prevention, and lower health care costs. 

Detractors claim that paid sick time laws create a high economic burden on business and the economy and that the government should not get involved in voluntary agreements between employees and employers. They argue that the free market is the best and most effective way to extend the benefit of paid sick time to more employees while keeping the costs and impacts at a minimum.

Paid sick time laws also create regulations to be complied with and may create some new compliance challenges or legal issues for small employers, including recordkeeping responsibilities related to paid sick time and litigation related to non-compliance challenges.

High levels of benefits in Michigan

If the court ruling stands, Michigan businesses will be required to offer workers a high level of sick time benefits. A quick comparison of Michigan’s original law with similar statutes in other states shows that it provides broad, generous benefits to workers.

Most other state laws cap levels of paid sick time at 24 to 40 hours, much lower than Michigan’s 72 hours. Every other state with a similar law exempts more types of employees than the Michigan law does. While some states (Arizona, New Jersey, Oregon, Rhode Island, Vermont and Washington) allow for broad uses of paid sick time similar to the Michigan law; others (California, Connecticut, Maryland, and Massachusetts) place more limits on its use. Similarly, some state laws define family members broadly as Michigan’s does; others define family members more narrowly. Michigan’s law as amended by the legislature was more inline with what other states provide in their paid sick time laws.

It remains to be seen what will happen in the court system. If the current ruling stands, the paid sick time law as originally enacted will take effect on August 9, 2022. A stay has been filed and, if granted, will pause the current ruling until it can be reviewed by another court. This issue could end up before the Michigan Supreme Court for a ruling on the constitutionality of “adopt and amend.” However, it is not clear at this point if a stay or any other appeal will be granted.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the Citizens Research Council of Michigan is properly cited.