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Significant challenges could be ahead for businesses of all sizes in Michigan with the new minimum wage act and earned sick time requirements. It appears that these laws need revision to make them more practical. The effective date is February 21, 2025, and could head to administrative challenges as employees could misuse the system without adequate consequences. Let's just focus on two of the issues: Time Off Requirements:?Employers should be allowed to apply similar rules to the Paid Medical Leave Act, such as providing a fixed amount of time off (frontloading) without requiring time to be carried over. However, the new law is complicated and may force employers to create a separate bank of sick leave unless their existing policy meets strict technical standards. Even if employers frontload time off, the law does not prevent time from accruing. Additionally, while the law does not require payment for unused time off when an employee leaves, if the sick time is combined with paid time off (PTO), this could create a financial strain?and an?administrative nightmare for organizations?even if the ESTA time is tracked and not paid out.? ? Abuse of Sick Time:?The law only allows employers to request documentation after three consecutive days of sick leave, which could lead to employees taking unjustified time off (“ghost time”). Employers should have more flexibility to discipline employees who misuse sick leave without the fear of legal consequences. Employees may claim sick time to avoid attendance penalties, and the law should allow employers to require documentation for any sick leave, not just after three days, if their attendance policy requires it. ?? If your organization believes that the legislature should take action to prevent these laws from going into effect as written, please contact your representative.

??* Legal Update *?? Yesterday, the Michigan Supreme Court came out with its long-awaited Mothering Justice decision, holding that the Legislature’s adopt and amend strategy from 2019 was unconstitutional. The Legislature had used this strategy to pare back a voter-initiative paid sick leave statute and changes to the minimum wage and tip credit. As a result, the original, voter initiative sick leave (the Earned Sick Time Act) will go into effect on February 21, 2025. In general, the key differences from the current Michigan paid sick leave law (the Paid Medical Leave Act) are: ??ESTA applies to all employers (regardless of size) and all employees (including temps and independent contractors), whereas PMLA only applied to companies with 50 or more employees. ??Employees may use greater amounts of leave (72 under ESTA, versus 40 under PMLA). ??Employees also accrue it at a faster rate (1 hour earned per 30 hours worked under ESTA, versus 1 hour earned per 35 hours worked under PMLA). ??Employees may use leave in smaller increments (rather than 1-hour increments under PMLA). ??Employers may request documentation to substantiate need for earned sick leave only if absence is for 4 or more consecutive days, and employees must provide it “in a timely manner.” ??Posters will need to be updated, and the employer must provide notice of rights to new hires and current employees, including their right to file claims based on retaliation/discrimination. ??There is a rebuttable presumption of a violation if the employer takes an adverse personnel action within 90 days of the employee engaging in whistleblowing activity alleging violations of ESTA or informing others about their rights under ESTA. ??The upshot is that you’ll need to amend your handbook to address this decision and ESTA before February 21, 2025. You may want to consider waiting to act, however, as the Legislature and Governor may work together to amend the ESTA before the implementation date. ??Another result of the decision is that the MI minimum wage will be increasing, and the tip credit will be phased out. The schedule and amounts for those increases/phase out, subject to adjustment for inflation, are: ??February 21, 2026 – The minimum hourly wage will be $10.65, and the tip credit will be 60% of the minimum wage. ??February 21, 2027 – The minimum hourly wage will be $11.35, and the tip credit will be 70% of the minimum wage. ??February 21, 2028 - The minimum hourly wage will be $12.00, and the tip credit will be 80% of the minimum wage. ??February 21, 2029 – The minimum hourly wage will be calculated by the state treasurer, and the tip credit will no longer exist. Please contact Employment Attorney, James Reid with any questions.

The Michigan Supreme Court approved paid sick leave and announced minimum wage increases yesterday, affirming the will of the state's voters. The ruling ensures employees a minimum of 72 hours (nine days) of earned paid sick time to address personal or family-related short-term illnesses, effective Feb. 21, 2025. The judgment will also set Michigan’s minimum wage at $10 with gradual increases over the next four years. Additionally, the minimum wage for tipped employees will gradually rise to match the general minimum wage and adjustments for inflation will be made by the state's treasurer. The new law, titled the Earned Sick Time Act (ESTA), will supersede Michigan’s current paid sick leave law, the Paid Medical Leave Act (PMLA). The key differences, according to James Reid, legislative director, MISHRM, include: ?ESTA applies to all employers (regardless of size) and all employees (including temps and independent contractors), whereas PMLA only applied to companies with 50 or more employees. ?Employees may use greater amounts of leave (72 under ESTA, versus 40 under PMLA). ?Employees also accrue it at a faster rate (one hour earned per 30 hours worked under ESTA, versus one hour earned per 35 hours worked under PMLA). ?Employees may use leave in smaller increments (rather than one-hour increments under PMLA). ?Employers may request documentation to substantiate the need for earned sick leave only if the absence is for four or more consecutive days, and employees must provide it “in a timely manner.” ?Posters will need to be updated, and the employer must provide notice of rights to new hires and current employees, including their right to file claims based on retaliation/discrimination. ?There is a rebuttable presumption of a violation if the employer takes an adverse personnel action within 90 days of the employee engaging in whistleblowing activity alleging violations of ESTA or informing others about their rights under ESTA. The Michigan minimum wage will adhere to the following schedule: ?Feb. 21, 2026 – The minimum hourly wage will be $10.65, and the tip credit will be 60% of the minimum wage. ?Feb. 21, 2027 – The minimum hourly wage will be $11.35, and the tip credit will be 70% of the minimum wage. ?Feb. 21, 2028 - The minimum hourly wage will be $12, and the tip credit will be 80% of the minimum wage. ?Feb. 21, 2029 – The minimum hourly wage will be calculated by the state treasurer, and the tip credit will no longer exist. For more information, visit www.ontheclock.com. #MichiganSupremeCourt #PaidSickLeave #MinimumWage #ESTA #PMLA #MichiganLegislation

PAID LEAVE FOR ALL WORKERS ACT UPDATE: The Illinois Department of Labor ("IDOL") recently sent to the Joint Committee on Administrative Rules ("JCAR") the proposed FINAL RULES governing the PLFAWA (see link below). JCAR is meeting to review the proposed FINAL RULES on February 6, 2024. One BIG change in the proposed FINAL RULES, from the proposed Rules issued by the IDOL on 11/3/23, is the cumulative amount of unused paid leave hours employees an carry over into the next 12-month period. The initial proposed Rules permitted employees to carry over up to 80 hours of unused paid leave into the next 12-month period; the proposed FINAL RULES have reduced that amount to 40 hours. What has not changed is an employer's right to restrict employees' use of paid leave to no more than 40 hours in a 12-month period, even if, for example, an employee carries over into the next 12-month period the full 40 hours of unused paid leave. Employers should take the time to review and make any changes that may now be required under the proposed FINAL Rules to paid leave policies drafted and put in effect as of 1/1/24, as it is anticipated that JCAR will adopt the proposed FINAL Rules in their current form. https://lnkd.in/gmPPt_V3

UPDATE: Chicago Paid Leave and Paid Sick and Safe Leave Ordinance. Employers, last Friday, June 14, 2024, the City “revised” its Paid Leave and Paid Sick and Safe Leave Ordinance Public Notice that is to be posted in a conspicuous location at the place of employment, and provided to all covered employees with their first paycheck after 7/1/24.?The revision corrected an error, which is beneficial for medium size employers (51-100 covered employees), with respect to payout of accrued but unused paid leave upon separation of employment.? ? The initial Notice that was previously issued in early June 2024, provided that from 7/1/24 through 12/31/24, medium size employers are required to payout upon separation of employment up to 16 hours of accrued but unused paid leave; then from 1/1/25 and beyond, payout up to 56 hours of accrued but unused paid leave hours upon separation of employment. ? The revised Notice issued last week Friday, provides that from 7/1/24 through 6/30/25, medium size employers are required to payout upon separation of employment up to 16 hours of accrued but unused paid leave; then from 7/1/25 and beyond, payout up to 56 hours of accrued but unused paid leave hours upon separation of employment.?? Below is the link to the "updated" Notice, so make sure you're posting and providing covered employees with the correct version https://lnkd.in/gZniP-5H ?

Need to get the lowdown on statutory sick pay and what it means for your business? In this blog, we cover: ?? An overview of statutory sick pay ?? How statutory sick pay works ?? How many days of statutory sick pay employees get And plenty more – check out the article ?? https://1sa.ge/Kj3Q50QQ8ir #Payroll #SmallBusiness #StatutorySickPay

Illinois Law Alerts: Cook County and Chicago Midyear Updates JUNE 14, 2024 Several new and updated laws take effect in Cook County and Chicago on July 1, 2024. Keep reading for more details.? LOCAL MINIMUM WAGE INCREASES ? Chicago For employers with four or more employees, the minimum hourly wage will increase to $16.20. The minimum hourly base wage for tipped employees will increase to $11.02—this is the first rate increase that’s part of the gradual phase out of the tip credit, which will be eliminated in 2028. ? Cook County The minimum hourly wage will increase to $14.05. The minimum hourly base wage for tipped employees will remain at $8.40. ? ? CHICAGO FAIR WORKWEEK THRESHOLD INCREASE The threshold for coverage under the Fair Workweek Ordinance will increase to $61,149.35 per year (if salaried) or $31.85 per hour (if paid hourly). ? ? CHICAGO PAID LEAVE AND PAID SICK AND SAFE LEAVE? Under the city’s new Paid Leave and Paid Sick and Safe Leave Ordinance, which applies to employers of all sizes, employees will be entitled to accrue two separate types of leave: Paid Leave (PL) that can be used for any reason and Paid Sick and Safe Leave (PSL) that can be used for the reasons allowed by Chicago’s previous paid sick leave law. Below are some highlights. ? Accrual Both types of leave begin to accrue on July 1, 2024 (or upon hire, if after that) at a rate of one hour for every 35 hours worked in Chicago.?An employee who works 35 hours will have earned one hour of PL and one hour of PSL. Employers can cap annual accrual at 40 hours for each type of leave. ? Carryover Employees can carry over?up to 16 hours of PL from one benefit year to the next unless their employer frontloads PL, in which case no PL needs to carry over. Employees can carry over up to 80 hours of PSL from one benefit year to the next, regardless of whether the employer frontloads. ? Use Employers can’t cap use of either type of leave (except up to the amount that an employee has accrued). Employers can deny PL requests if the denial is based on a rationale covered by their written policy—they must also provide employees with a written explanation for the denial. Employers can impose a 30-day waiting period on use of PSL and a 90-day waiting period on use of PL from the time an employee begins to accrue. ?

Employers with St. Paul, Minnesota employees: The St. Paul Department of Human Rights and Equal Economic Opportunity (which enforces the St. Paul Earned Sick and Safe Time Ordinance (the “Ordinance”)) recently released a guidance addressing various nuances of the Ordinance, including: - whether time spent traveling by employees counts as time worked for purposes of accruing earned sick and safe time (“ESST”) - proper procedures for frontloading ESST - what requirements must be met for an existing PTO policy to satisfy the Ordinance’s requirements; and - the circumstances under which an employer can ask for documentation to verify an employee’s request to use ESST Businesses with employees in St. Paul should review the guidance carefully to make sure their paid sick/safe leave and/or PTO policies comply with the guidance, as well as Minnesota’s statewide paid sick leave law. ? A link to the guidance can be found here: https://lnkd.in/eeRtqaTJ #sicktime #ordinance #stpaul #DGPERKS

?? Minimum Wage Increases & Paid Sick Leave: A Turning Point for Employee Compensation? Voters in traditionally conservative states, Alaska and Missouri, recently approved significant changes in minimum wage and paid sick leave laws. By 2027, minimum wages in both states will reach $15 per hour, with adjustments for inflation. These measures also require employers to provide paid sick leave—an essential benefit that many workers still lack. What does this mean for your organization? These changes reflect a broader shift toward improved worker rights and benefits, encouraging businesses across the country to reassess how they attract and retain talent. While the new laws directly impact Alaska and Missouri, they signal a trend that could affect organizations everywhere. ?? Are your pay structures and benefits competitive in this evolving landscape??? ?? Is your organization prepared to meet new standards and retain top talent? A proactive salary and benefits review can help ensure you’re staying ahead, balancing compliance, employee well-being, and financial sustainability. Now is a great time to consider a salary study or compensation analysis tailored to your organization’s unique needs. Reach out today to learn how a comprehensive review can help your business adapt and thrive in a changing labor market. ?? https://lnkd.in/gajuF4MJ #HR #TalentAcquisition #Wage #TalentForward

In #HR and #Employment news: Michigan expands paid sick leave and begins annual minimum wage increases. Workers who make inconsistent tips or are underemployed will be set up to have a more consistent income in the following years. The changes to sick leave practices requires employers to pay for the costs to acquire a doctor's note —?a hardship for those working paycheck-to-paycheck. Check out this article from Barnes & Thornburg LLP here to learn more: https://lnkd.in/gMbjWKaU I have limited availability for #FractionalHR consulting and HR project-based work. If you're in Michigan and need some help figuring out new compensation philosophies or payroll budgets, please feel free to get in touch here: https://lnkd.in/guwTgJik