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A Michigan judge rules current state wages and sick time laws are void opening the door to $12 an hour

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Posted at 5:36 PM, Jul 20, 2022
and last updated 2022-07-21 13:52:24-04

JACKSON, Mich. — The Michigan Court of Claims has ruled that the 2018 “Adopt and Amend” strategy was unconstitutional.

This means the state’s current minimum wage, tipped wage and paid medical leave laws are void and will be replaced with the 2018 citizen’s initiative ballot language.

It happened Tuesday in the Michigan Court of Claims where Judge Douglas Shapiro found the revised laws passed in December 2018 by the Legislature were invalid. Shapiro also ruled the state Legislature cannot appeal the decision.

In 2018, the Legislature adopted proposals to raise the minimum wage and paid sick leave that was designed to adjust due to inflation. The initiatives would have appeared on the November 2018 ballot but were adopted by the Legislature and subsequently watered down – adopted and amended. The legislation allowed the minimum wage to increase to $12.05 an hour by 2030.

Governor Rick Snyder signed the bill in December 2018.

The initiatives, funded by national nonprofit One Fair Wage, would have raised Michigan’s minimum wage to $12 an hour by Jan. 1, 2022, the tip wage by 100 percent of the minimum wage by 2024 and established paid sick time.

Because of the ruling Tuesday, the minimum wage will be raised to $12 an hour and every January the minimum wage will be adjusted to the rate of inflation with no cap.

Local businesses have been left a little dazed and confused, according to the Jackson Chamber of Commerce.

“This was kind of out of nowhere for a lot of our business owners,” Chamber President and CEO Craig Hatch said. “We were able to inform them this morning when we got the information and there are a lot of questions and a lot of concerns. There are concerns about what the difference is between living wage and base wage and what it should be and where we should be. Obviously, this has been debated for a long time and for this to come out of left field without enough information for the businesses to know, they have a lot of questions.”

Hatch said the Chamber of Commerce is against the timing of this ruling.

“An increase from where we’re at now to where they’re talking, that’s a huge increase,” he said. “Every time you look at something like this and, with inflation that’s happening right now in the world and in the United States, this is probably the worst time for this to happen because this is one more piece that’s going to affect inflation. If you just look at the restaurant business and the cost they have going up with supplies already, and now you’re going to increase by over 200 percent their employee costs.”

Michigan’s minimum wage is $9.87 an hour. Right now, the tipped wage is set at 38 percent of the minimum wage, or $3.75 an hour. This ruling would jump the hourly tip wage in 2023 to 90 percent of the minimum wage or $8.88 an hour. The initiative would make it 100 percent of the minimum wage by 2024.

The second citizens’ initiative expands Michigan’s earned sick time laws. Called the Earned Sick Time Act it will provide workers with one hour of sick leave for every 30 hours worked, capped at 72 hours per year.

Michigan AFL-CIO President Ron Bieber said the actions taken by the 2018 Legislature and then Attorney General Bill Schuette were shameful.

“They showed complete disregard for our state’s Constitution with the sole purpose of taking rights away from working people,” he said. “With this decision, the people’s will expressed in these citizens’ initiatives is now restored and goes into full effect as it should have back in 2018.”

According to the Michigan Retailers Association, they expect the attorney general’s office to file a stay, or a pause, on the decision even though Dana Nessel issued a statement of support over this decision.

“The initiated law process is intended as a tool for the people,” Nessel said. “As Judge Shapiro noted in his opinion, the Constitution grants the Legislature three options to address a law: enact, reject or propose an alternative law. It does not permit the Legislature to adopt a proposed law and in the same session substantially amend or repeal it. The actions taken by the Legislature in 2018 denied the will of the people and distorted the purpose of Michigan’s citizen’s initiative process. This is a victory for Michiganders and for democracy.”

The governor’s office is still reviewing the decision and what the next steps should be. It is important to note there is no immediate enforcement or implementation of the original ballot proposal laws.

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