Published in Economic Development
Michigan Capitol Building, Lansing, Mich. Michigan Capitol Building, Lansing, Mich. COURTESY PHOTO

Lame Duck Outlook: Biz groups closely watching paid sick leave, minimum wage bills

BY Sunday, November 25, 2018 09:45pm

Bills to scale back new state laws mandating paid sick leave and increasing the minimum wage are top of mind for local and statewide business groups in this year’s legislative lame duck session.

While it’s always difficult to predict lame-duck outcomes, Republicans — who control both branches of the Legislature and the executive office for just five more weeks — are looking to scale back the laws set to take effect early next year.

Earlier this year, the Board of State Canvassers approved both issues to appear on the November ballot after advocates gathered the required number of signatures. The Legislature then approved the bills with the intention of amending them. If approved by voter initiative, the proposals would have required a three-fourths majority to make changes — a steep climb even with Republicans in control.

State and local business groups call the adopted bills extreme and burdensome for employers, and urged the Legislature to pass them so they could be more easily amended.

“We usually don’t save our asks for lame duck,” said Wendy Block, vice president of business advocacy for the Michigan Chamber of Commerce. “We recognize Michigan will probably have a mandatory paid sick leave law on the books after lame duck. We just want to make sure this doesn’t negatively impact the employees it’s intended to help.”

Others say the ballot proposals removed debate among lawmakers.

“When a law is introduced, it has a hearing, a debate, and the process improves as it ultimately becomes a law,” said Rob Fowler, president and CEO of the Small Business Association of Michigan. “We were not on a path for that to happen.”

Supporters of the two efforts counter that lawmakers are thwarting the will of voters by making changes after a successful election for Democrats. They also criticize Republicans for being vague about how exactly they want to scale back the bills.

“They won’t tell anybody what they want to do,” said David Waymire, spokesperson for MI Time to Care, the group pushing the paid sick leave proposal. “Do they want to gut the whole thing? Then there’s going to be a war. Do they want to change a reporting requirement or two? Well, let’s have the discussion.”

The paid sick leave bill gives employees an hour of paid sick leave for every 30 hours worked. Fowler says the proposal should follow federal definitions of employers and employees under the Family Medical Leave Act. Business groups also have raised concerns about feasibly administering the plan, including the way paid sick time is banked.

Republican State Sen. Mike Shirkey, who is set to become the next Senate Majority Leader, introduced a bill this month that eliminates a rebuttable presumption if an employer “takes adverse personnel action” against an employee for allegedly violating the state’s earned sick time law. The bill also shortens from three years to six months the length of time an employer records earned sick time. 

Outgoing Senate Majority Leader Arlan Meekhof, R-West Olive, also has said amendments could involve notices employees are required to give for time off.

According to Waymire, the paid sick leave proposal will help the state attract talent and is a “commonsense benefit” found in 11 other states.

“The idea that this is damaging to the state’s economy is completely incorrect,” he said. “All around the state and country, employers are finding they need to retain good talent. There is nothing better to do that than decent benefits. There’s nothing more decent than if your child is sick and home from school, you don’t have to face losing your paycheck or job over it.”

Minimum wage fight?

Meanwhile, the minimum wage law scales it up from $9.25 an hour to $10 an hour on Jan. 1 and up to $12 an hour by 2022. By 2024, tipped employees’ $3.52 hourly wage increases to the full minimum wage.

Andy Johnston, vice president of government and corporate affairs with the Grand Rapids Area Chamber of Commerce, says the proposal “puts Michigan at one of the highest minimum wages in the country.”

He and other groups raised concerns about the effects the law could have on the restaurant industry’s tipped workers.

“We are certainly sympathetic to our members who have tipped employees,” Fowler said. “If you’re a restaurant owner and have to pay everyone $12 an hour plus tips, the cost of food and drinks go way up. At some price, customers no longer come to your restaurant.”

A bill introduced this month by Sen. Dave Hildenbrand, R-Lowell, would amend the Improved Workforce Opportunity Wage Act by lowering the wage of tipped workers.

However, potential amendments are likely to be met with a court challenge. Attorney Mark Brewer, the former head of the Michigan Democratic Party who represented both ballot campaigns, has said it’s unconstitutional for the Legislature to enact a proposal and amend it in the same session.

Block said a “strict interpretation” of the state constitution allows lawmakers to make changes this year.

“We think lawmakers shouldn’t be afraid of this,” she said. “All anyone needs to do is read the constitution.”

Environmental cleanup, other issues

Less certainty surrounds Gov. Snyder’s proposal to create new fees on water and increase fees for landfill dumping to pay for environmental site cleanup and address the state’s PFAS problem. Block said the Michigan Chamber supports Snyder’s plan “in concept.”

“There might still need to be some negotiations with lawmakers to get the votes and have it done before the end of the year,” she said. “We support these cleanup efforts and the intent of how these dollars will be used.”

Meekhof has reportedly said it’s unlikely the Legislature will take up Snyder’s proposal, but he didn’t rule out the possibility.

The Grand Rapids Chamber is “very concerned” about the way the proposals are structured, particularly for water infrastructure, according to Johnston. 

“On tipping fees, we’re definitely open to conversations to find a landing ground that works,” he said.

The Grand Rapids Chamber also hopes the Legislature takes up occupational licensing reform and adopts an A-F grading system for schools during lame duck.

“We need to do a better job of improving education outcomes,” he said. “One way of doing that is a transparent, accountable measuring system.”

Working with the Whitmer administration

Business groups also are outlining priorities to work on with Gov.-elect Gretchen Whitmer, including a new road-funding plan.

“I’d say we agree we need to fix the damn roads,” Fowler said, echoing Whitmer’s campaign messaging.

As well, SBAM is focused on containing health insurance costs for employers, talent attraction and retention, implementing the recreational marijuana law and state procurement policies.

“How the state’s goods and services are purchased does not have a preference for small businesses in Michigan,” he said. “I think it could be low-hanging fruit for the next administration, and it may not even take legislation.”

Johnston hopes to “continue the discussion” around expanding the Elliott Larsen Civil Rights Act to include sexual orientation and gender identity “so we’re sending the right message.”

He also agreed that “talent is a must. We need to continue to address the failing of our educational outcomes.”

With a new dynamic coming with a Republican-led Legislature and a Democratic Governor in office, Fowler hopes the two sides can find agreement.

“Given the new makeup of the House and Senate controlled by Republicans and Democrats at statewide offices, it may be a place we can get some things done,” he said. 

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