Last September, the Southwest Michigan Regional Chamber, as part of the Small Business for a Better Michigan coalition, filed an amicus brief with the Michigan Court of Appeals (COA) urging them to reverse a lower court decision that found the 2018 enactment of Michigan’s paid sick leave and minimum wage laws unconstitutional. Today, we are pleased to announce the COA upheld our argument and ruled unanimously in our favor.
The decision in question was the Michigan Court of Claims (COC) July ruling on Mothering Justice v Attorney General, which found the Michigan Legislature’s 2018 “adopt and amend” strategy to address two ballot initiatives was unconstitutional. This ruling voided the Legislature’s amended version of Michigan’s paid sick leave and minimum wage laws, which have been in effect since March 29, 2019, and ordered that the language contained within the original ballot proposals be enacted instead.
Recognizing the significant impact this would have on Michigan’s business climate, the Southwest Michigan Regional Chamber, along with several other business associations in the state, filed an Amicus Brief arguing the Legislature’s actions were supported by the plain language of the Michigan Constitution and asked for a reversal of the lower court’s decision.
In the 3-0 decision issued Thursday, Jan. 26, the COA unanimously overturned the lower court’s ruling, agreeing that, “…the trial court’s conclusions are not supported by either [sic] the text or intent of [the constitution]…”
Now that the lower court’s decision was reversed and given immediate effect, Michigan businesses will not be forced to make significant changes to their paid time off (PTO) policies or wage schedules come Feb. 19, 2023.
This effectively means Michigan’s minimum wage, which is already indexed to inflation, will not increase further and that Michigan’s tipped wage system will remain intact. It also means businesses with fewer than 50 employees will remain exempt from the minimum paid sick leave requirements and that minimum paid sick leave requirements will not be increased, nor extended to contractors as the overturned court decision would have required.
The Michigan Restaurant and Lodging Association estimates roughly 50,000 hospitality jobs were (temporarily) saved because of this COA decision. Imagine the impact on that industry, and the rest of our economy, had our argument not been upheld?
While businesses across the state are understandably breathing a sigh of relief, this fight is not yet over. We fully expect this decision to be appealed to the Supreme Court and will closely monitor the status of that appeal as well as any action by the current Legislature to effectively alter today’s decision without first gathering input from the business community.
At the end of the day, input from the business community is truly what we are fighting for. Our chamber actively supports and encourages our region’s employers to offer competitive pay and benefits as a means to both retain and recruit talent to our area. We simply believe these decisions should be made by that employer (based on their industry, size, etc.) with limited government interference.
Now, there will always be those who believe businesses will not offer wage and/or benefit increases unless the government forces them to. To them I say the free market and recent federal data says otherwise:
“Between 2019-21, per capita personal income in Berrien climbed from $49,735 to $59,656, a 9.9 percent increase. This was the largest percentage change statewide and puts the county at 10th out of Michigan’s 83 counties for per capita personal income – or personal income divided by population. Berrien climbed three places since 2019, overtaking counties like Ottawa, Keweenaw and Kalamazoo for per capita personal income.” (Jan. 25, 2023, “Report: Berrien County’s average income saw greatest rate increase in state” – The Herald Palladium)
This did not happen because higher compensation floors were foisted upon us from the state level, but because the free market called for it and our region’s businesses answered. While there’s undoubtedly more work to do, organizations like ours are committed to protecting and strengthening Michigan’s business climate so that both employers and employees can prosper.
As you’ve seen with this Amicus Brief, that’s a commitment we intend to keep.