Michigan employers: If you haven’t updated your employment handbooks in the last year, now is the time! Not only do we have new paid leave requirements that go into effect in February of 2025, now is also a good time to review your employee classifications and consider equal employment opportunity training in advance of the change in presidential administrations.
- Michigan’s Paid Medical Leave Act.
The United States has no federal paid medical leave program, but Michigan does have one, and it is undergoing a major overhaul at the beginning of next year. On July 31, 2024, the Michigan Supreme Court ruled in Mothering Justice v. Attorney General that the Michigan legislature’s 2018 amendment to the Michigan Paid Medical Leave Act was unconstitutional. So, the 2018 amendment that employers have been operating under is invalid. Unless the legislature works quickly on a different solution before February 21, 2025, all non-governmental Michigan employers must, by that date, comply with expanded paid medical leave requirements.
Among other changes are the following:
- The current law requires employers with 50 or more employees to provide paid sick leave; the new law (again, effective February 21, 2025) requires all employers with one or more employees to provide paid leave. The only employees who are not eligible are those employed by the federal government.
- The current law requires one hour of paid sick leave for every 35 hours worked, up to 40 hours per year. The new law will require one hour of paid sick leave for every 30 hours worked, up to 72 hours a year (except for small businesses with 10 or fewer employees, which are capped at 40 hours per year).
- The current law permits employees to take paid medical leave for obtaining medical care for themselves or a family member, including physical and mental illness and injury, workplace/daycare closures due to a public health emergency, and absence due to domestic violence and sexual assault situations. The new law also will include absences for meetings at a child’s school or place of care related to a child’s health or disability, or the effects of domestic violence or sexual assault on the child.
- “Family member” will be expanded to include domestic partners, as well as “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
- The current law allows employees to carry up to 40 hours of paid sick leave per year, and the new law places no limit on the amount of sick leave that can be carried over from year to year.
There are many other changes, including documentation requirements, increments of use, and recordkeeping. Importantly, the new law creates a private cause of action for employees against employers that they believe are in violation, and the state may levy hefty fines for violations.
There is still time to revisit leave and PTO policies to account for these changes, including re-evaluating combined paid time off policies. Call us if your business could use a handbook refresh.
- Employee Classifications.
Last week, a judge in Texas vacated and set aside all components of a new final rule issued by the United States Department of Labor in April, which among other things increased the salary basis requirement for employees who fall under the so-called “white collar exemption” from United States wage/hour laws. Under the Fair Labor Standards Act, employers must pay employees overtime if the employee works more than 40 hours in a week, unless the employee performs executive, administrative, or professional duties and are paid a certain threshold salary (salary basis). Since 2019, the salary basis requirement has been $35,568 per year. The new rule bumped it up to $43,888 per year beginning on July 1, 2024, and then increased it again to $58,656 annually, effective January 1, 2025.
Many employers scrambled to increase salaries and budget for the upcoming increase set to go live in January, but those plans may now change, as the opinion issued by the Texas judge last week determined that the Department of Labor lacked the authority to issue the new rule, invalidating it nationwide.
Employers who increased salaries on July 1, 2024 to comply with the new rule are free under the law to reduce salaries prospectively, and are also free to walk back salary increase announcements. However, these moves can create business and morale problems and must be messaged carefully from both a business and a legal standpoint. This is a good time to audit your employee classifications to make sure that they are in line with all wage/hour requirements, and that they don’t violate other laws regarding, for instance, independent contractor status. Call us if you require assistance navigating these issues.
- Equal Employment Opportunity Policies.
The change to a Donald Trump presidential administration will no doubt impact the treatment federal agencies give to a wide variety of workplace issues. The Equal Employment Opportunity Commission (EEOC) has been active under the Biden administration, including an uptick in litigation and enforcement against employers. While we can expect a drop in that type of activity, the EEOC does still have a role to play, including in education and training.
At GMH, we frequently assist clients with training for a variety of employment law issues, including avoiding harassment claims, Americans With Disabilities Act compliance, workplace inclusivity, and as ordered by the EEOC. If your business has not had recent training in these or other areas, give us a call – we’d be glad to discuss whether education might reduce your company’s risk of employment claims.
 |
Elizabeth “Liza” A. Favaro
Board of Directors |