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 urging them to reverse a lower court decision that found the 2018 enactment of Michigan’s paid sick leave and minimum wage laws unconstitutional. This week, the Chamber and their coalition partners are celebrating a unanimous ruling that upheld the argument and overturned the previous decision.
The decision in question was a July Court Of Claims ruling (Mothering Justice v Attorney General) that found the Michigan Legislature’s 2018 “adopt and amend” strategy to address two previous ballot initiatives increasing the minimum wage and enacting a paid sick leave law was unconstitutional. In his ruling, the Court of Claims judge voided the Legislature’s amended version of the 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.
“We took this extraordinary step because of how much there was at stake in this case,” said Chamber President and CEO, Arthur Havlicek. “As the “Voice for Business” in the region, we felt it was necessary to defend the welfare of our state’s business community as well as the integrity of the legislative process.”
In the 3-0 decision, the Michigan Court of Appeals unanimously overturned the lower court’s ruling, saying, in part, “[b]ecause the trial court’s conclusions are not supported by either the text or intent of [the constitution], we reverse the Court of Claims’ order.”
“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 policies (PTO) and procedures and wage schedules come Feb. 19, 2023,” said Havlicek. “Unless the Michigan Supreme Court subsequently decides to reverse the Court of Appeal’s decision or the Legislature takes action, these laws will remain unchanged.”
Havlicek said this effectively means that the state’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 remain exempt from the minimum paid sick leave requirements and that paid sick leave requirements would not be increased and extended to contractors as the overturned court decision would have required.
“We support and encourage our members to offer competitive pay and benefits as a means to both retain and recruit talent to our area,” said Havlicek. “With a recent study finding Berrien County’s per capita personal income has grown faster than any other county in the state, we remain convinced these decisions can and should be made free of adverse government interference.”
Havlicek noted that while he fully expects the decision to be appealed to the Supreme Court, it remains unclear whether or not the court will take it up. He said his Chamber will closely monitor the status of that appeal as well as any action by the current Legislature to alter today’s decision without first gathering input from the business community.
