Department of Labor Publishes Final Regulation: “Joint Employment”

By:  Claudia D. Orr, Plunkett Cooney

This month, the US Department of Labor (“DOL”) issued the final rule revising its regulations that interpret joint employer status under the Fair Labor Standards Act (“FLSA”). There are two primary scenarios for determining joint employer status under the FLSA. Only the first was affected by the final rule.

In its January 12th announcement, the DOL explained the affected first scenario stating: “The final rule provides updated guidance for determining joint employer status when an employee performs work for his or her employer that simultaneously benefits another individual or entity, including guidance on the identification of certain factors that are not relevant when determining joint employer status.” (Emphasis added)

There is a growing variety and number of business models and labor arrangements that have made joint employment far more common than in the past and the DOL considers joint employment issues in literally hundreds of investigations each year.  So, why is this big deal? Because if the DOL finds a joint employer relationship, then all of the hours worked by the employee for either of the joint employers are hours worked for purposes of determining overtime pay each week. In addition, the DOL may hold each of the joint employers liable for any violations.

The new regulations, which were published on January 16, 2020 in the Federal Register, apply a balancing test that examines whether the potential joint employer:

  • hires or fires the employee;
  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • determines the employee’s rate and method of payment; and
  • maintains the employee’s employment records.

Significantly, the potential employer must actually exercise control over the worker. Simply having the ability is relevant, but it is not determinative without some actual exercise of control.

The DOL notes that factors such as whether there is a franchise agreement, or contracts in place obligating compliance with health/safety or quality standards do not make a joint employer relationship more, or less, likely. Nor is the provision of a sample handbook or other employment forms, participating in an apprenticeship program or providing association health care or retirement plans particularly relevant to the analysis.

In fact, “whether the employee is economically dependent on the potential joint employer, including factors traditionally used to establish whether a particular worker is a bona fide independent contractor (e.g., the worker’s opportunity for profit or loss, their investment in equipment and materials, etc.), are not relevant to determine joint employer liability.”

In its Jan 2020 Fact Sheet, the DOL indicated that the test for the “second scenario” remained largely unaffected by the final rule, explaining as follows:

If the employers are acting independently of each other and are disassociated with respect to the employment of the employee, each employer may disregard all work performed by the employee for the other employer in determining its liability under the FLSA.

The DOL cautioned, however, that if the employers are “sufficiently associated with respect to the employment of the employee” they will be determined to be joint employers which will require them to aggregate all of the hours the employee works for both of the employers for purposes of overtime compliance:

The employers will generally be sufficiently associated if there is an arrangement between them to share the employee’s services, the employer is acting directly or indirectly in the interest of the other employer in relation to the employee, or they share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.

In my experience, most employers are oblivious to the concept of joint employer relationships or that hours worked for either company may need to be stacked for purposes of overtime pay calculations.

The final rule, which becomes effective March 16, 2020, provides several examples of how the DOL analyzes joint employer relationships in various situations. Finally, remember, this is the test applied only under the FLSA.  There are different tests under the National Labor Relations Act, civil rights laws and for pensions and welfare benefits under the Employee Retirement Security Act, to name a few.  If you have any questions about the wage laws or any other employment related issues, always consult an experienced employment attorney, such as the author.

 This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association. She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. January 2020.

ASE releases 2020 Starting Salaries for Co-op Students and Recent College Graduates Survey

 

Media Contact: Heather Nezich, Manager, Communications, ASE, 248.223.8040, hnezich@aseonline.org  

(77%) of Michigan employers say their company has hired, or plans to hire, a recent college graduate in 2020.

Livonia, Mich. —January 28, 2020 — ASE, Michigan’s largest employer association, released the 2020 Starting Salaries for Co-op Students and Recent College Graduates Survey today. The annual survey provides a comprehensive look at the current state of wages and benefits provided to co-op students and recent college graduates.  The survey also presents employers a snapshot of the recruitment and retention trends associated with these new entrants to the workforce.

Mary E. Corrado, ASE President and CEO, stated, “The number of employers hiring or planning to hire new college grads has reached its highest level since 2016.  However, while this job outlook looks promising for new college graduates, some challenges may exist.  Our data is suggesting that employers may be slowing the pace of their hiring or that we have reached a plateau.  New grads will need to work harder to distinguish themselves and compete for what might be few opportunities.  Our data suggests that prior work experience and internships play a significant role in employer decision making.  Students should consider internships as a steppingstone to their career.”

121 companies responded to the 2020 Starting Salaries for Co-op Students and Recent College Graduates Survey.  The majority (76%) of the respondents have under 500 employees.  Just over 80% of respondents are located in the metro Detroit region with 58.7% of those classified as automotive suppliers.

2020 Starting Salaries for Co-op Students and Recent College Graduates Survey Highlights:

  • Nearly four out of five (77%) respondents say their company has hired, or plans to hire, a recent college graduate in 2020, three percentage points higher than what was reported in 2019.
    • However, the data suggests that the pace or amount of hiring may be slowing.  Just 19% of companies plan on increasing their hiring efforts, an 11% decrease from last year.
    • When asked why their hiring of college graduates has changed there was a 14% increase in those citing financial concerns.
  • Statistically, the top five in-state institutions the responding companies actively recruit from are: 1) University of Michigan; 2) Michigan State University; 3) Oakland University; 4) Lawrence Technological University; 5) Wayne State University.
  • Based on reported data, the top three most popular technical Bachelor-degree disciplines hired in the past year were: 1) Mechanical Engineering; 2) Electrical Engineering; 3) Computer Science
  • Based on reported data, the top three most popular non-technical Bachelor-degree disciplines hired in the past year were: 1) Supply Chain Management; 2) Business Administration; 3) Finance tied with HR/Labor Relations
  • The top three knowledge/skill factors organizations consider when making hiring decisions, in order, are: related coursework (i.e., to the work required in the job); computer skills; and internship/work experience.
  • The top three perceived shortcomings of recent college graduates are: 1) career expectations (62%); 2) compensation expectations (54%); 3) adaptation to work environment (52%).
  • Of the seven disciplines named above (Business Administration, Computer Science, Electrical Engineering, Finance, HR/Labor Relations, Mechanical Engineering, Supply Chain Management) the highest average starting salary was $71,581 for Computer Science.  Going down in the average starting salaries is Electrical Engineering ($70,236), Mechanical Engineering ($67,600), Business Administration ($65,597), Supply Chain Management ($63,589), HR/Labor Relations ($59,975), and Finance ($59,142).
  • Pay rates for high school and college co-ops and interns were separated by technical and non-technical roles; the average hourly rate for a college senior in a technical field is $18.38 an hour and $16.75 for a non-technical field; the average hourly rate for a college junior in a technical field is $17.11 an hour and $15.75 for a non-technical field.

This survey is available free of charge to ASE members and for $525 to non-members.  Contact Kevin Marrs at kmarrs@aseonline.org for more information.

 About the American Society of Employers (ASE) – a Centennial Organization

ASE is Michigan’s largest employer association and the premier resource for HR excellence.  ASE is a non-profit, mission-based, membership organization – everything we do is based on the needs of members and to drive the success of their organizations.  ASE strengthens organization’s HR departments by offering member benefits and discounted services that span the entire employee lifecycle including recruitment, engagement, development, and retention while minimizing compliance risk. Learn more about ASE at www.aseonline.org.

Plunkett Cooney’s 2020 Employment Law Seminar — Be My Valentine (or Else!)

 

 

February 7, 2020
Troy Marriott Hotel

Click Here to view Seminar Flyer

TO REGISTER: Please call 248-594-8698 or send an email
message to “rsvp@plunkettcooney.com.”
Reference “PC Employment Law Seminar” in the Subject line and
include your name, company affiliation and telephone number.
___________________________________________________________________________________

This activity is approved by the HR Certification Institute for 3.5 general credits toward
the aPHR®, PHR®, PHRca®, SPHR®, GPHR®, PHRi® and SPHRi® certifications.
Plunkett Cooney is recognized by SHRM to offer 3.5 Professional Development
Credits (PDCs) for the SHRM-CPSM or SHRM-SCPSM.
___________________________________________________________________________________

ASE’s Annual HR Conference will take place March 12 in Novi, MI. Conference geared towards creating a workplace of tomorrow

Media Contact: Heather Nezich, ASE, 248.223.8040, hnezich@aseonline.org

January 23, 2020

Livonia, Mich. — ASE, Michigan’s largest employer association and the premier resource for HR excellence, will hold its 17th Annual HR Conference on March 12 at the Suburban Collection Showplace in Novi, MI. The event attracts more than 400 attendees and is the region’s most anticipated one-day Human Resources conference.

“This year’s conference is all about creating a workplace of tomorrow,” stated ASE President & CEO, Mary E. Corrado. “With technology evolving and virtual work becoming the norm, employers must prepare themselves for the workplace of tomorrow.  This conference reaches all levels of HR from compliance to strategic planning to talent development and management.”

Keynote speakers at this year’s conference feature two workplace culture experts, Kris Boesch and Tracy Butz.

Kris Boesch, CEO and Founder of Choose People, will present “Social Super Glue: How to Create Camaraderie in Your Workplace.” She’ll share the “social super glue” that’s critical to creating an extraordinary workplace culture and she’ll share how to leverage this “glue” to address common culture challenges such as gossip, entitlement and apathy. This results in culture where perseverance through tough times, inspiration to go the extra mile and retention of top talent is the norm, not the exception.

Tracy Butz, Workplace Culture Expert, Best-Selling Author, and Keynote Speaker, will present “HOLY COW!® How to Create an Amazing Workplace that Steers Passion, Performance & Prosperity.” She will share how to inspire change in dysfunctional, under-performing silos to become motivated, accountable, and committed teams. Attendees will learn how to start influencing a transformation of workplace culture and prosper in the marketplace.

 Conference breakout sessions include:

  • 2020 Vision – Employment Law Updates, Trends and Pitfalls
  • How to Embrace and Leverage Virtual Work
  • Leveraging Compensation Strategy and Design to be a Strategic Partner and Drive Results
  • Unwrap Your Map! Using Journey Mapping to Increase New Employee Engagement
  • Mobilizing Civility: Creating a Culture of Respect in the #MeToo Era
  • High Value Succession Planning: 3 Impactful Things You Can Do
  • Courageously Lead and Influence Change
  • Why Training Doesn’t Stick
  • FMLA: How to Manage the Use and Abuse
  • Drama Free Workplace – Avoiding the Self- Defeating Habits of Otherwise Brilliant People®
  • Generating a Culture of Supportive Accountability
  • Ready, Set, Go…Strategies to Activate Your Employer Value Position

New this year is an HR Experts Panel featuring case studies in leadership, engagement, and succession planning.

Early bird registration ends February 14, 2020.  For a complete conference agenda and registration information, please visit the ASE website.

About the American Society of Employers (ASE) – a Centennial Organization

ASE is Michigan’s largest employer association and the premier resource for HR excellence.  ASE is a non-profit, mission-based, membership organization – everything we do is based on the needs of members and to drive the success of their organizations.  ASE strengthens organization’s HR departments by offering member benefits and discounted services that span the entire employee lifecycle including recruitment, engagement, development, and retention while minimizing compliance risk. Learn more about ASE at www.aseonline.org.

Plunkett Cooney names five attorneys as new shareholders

DATE: January 17, 2019

CONTACT: John Cornwell (248) 901-4008

BLOOMFIELD HILLS, MI – January 17, 2020 – Plunkett Cooney, one of the Midwest’s oldest and largest full-service law firms, recently named five attorneys as its newest shareholders.

Abe Barlaskar, Sean M. Carty, Emily M. Coyle, Scott W. Malott and Jeffrey M. Schroder were recently approved by the firm’s Board of Directors as the firm’s newest shareholders. The promotion from associate attorney is based on the recommendations of the firm’s Shareholder Evaluation Committee and is effective January 1, 2020.

Barlaskar is a member of the firm’s Bloomfield Hills office who focuses his litigation practice on defending insurers and personal line carriers, rental car companies, trucking companies, and corporations and municipalities in negligence and general liability matters, No-Fault matters, insurance coverage disputes and extra-contractual claims. He also represents retail clients in litigation matters, including premises liability, food-borne illness cases, as well as other commercial disputes and criminal matters.

Admitted to the State Bar of Michigan and the U.S. District Court for the Eastern District of Michigan, Barlaskar has been named as a Michigan Super Lawyers Rising Star since 2015. He is a 2011 cum laude graduate of Western Michigan University Cooley Law School and a 2005 graduate of the University of Michigan.

Carty is a member of the firm’s Banking, Bankruptcy & Creditors’ Rights Practice Group. He focuses his practice in the areas of commercial loan originations, commercial leasing and real estate transactions. Carty represents various financial institutions in asset-based, real estate and construction loan originations covering a variety of industries. He also represents landlords and tenants in large commercial leasing transactions.

A member of the firm’s Bloomfield Hills office, Carty graduated, cum laude, from the University of Detroit School of Law in 1991. He received his undergraduate degree, with distinction, from the University of Michigan in 1988.

Coyle is a member of the firm’s Bloomfield Hills office who focuses her practice in the areas of loan workouts and foreclosures, commercial real estate, and loan documentation and sales. Coyle’s practice also includes expertise with respect to investigating fraudulent or suspicious claims stemming from motor vehicle accidents.

Coyle graduated summa cum laude from Western Michigan University Cooley Law School in 2010. She received her undergraduate degree from Juniata College in 2003.

Malott is a partner in the firm’s Transportation Law Practice Group who focuses his practice on insurance-related claims involving no-fault law, motor vehicle negligence, premises liability and property liability, including theft and damage.

A member of the firm’s Bloomfield Hills office, Malott has been named a Michigan Rising Star in Civil Litigation Defense by Michigan Super Lawyers. He received his law degree from Western Michigan University Cooley Law School, cum laude, in 2011 where he received several academic awards. Malott received his undergraduate degree from the Haworth College of Business at Western Michigan University in 2004.

Rounding out Plunkett Cooney’s 2020 class of new shareholders is Jeffrey M. Schroder, who is a member of the firm’s Bloomfield Hills office. Schroder serves as co-leader of Plunkett Cooney’s Cannabis Industry Group, and he is a member of the firm’s Healthcare and Governmental Law practice groups.

A former Assistant Michigan Attorney General, Schroder focuses his practice in the areas of cannabis and liquor license applications and compliance, healthcare compliance and audit defense, fraud and embezzlement recovery, municipal law, and zoning/land use. His practice includes all aspects of state and local regulatory compliance, as well as related business issues, including license approvals, transactions, real estate and related litigation.

Admitted to practice in state and federal courts in Michigan, Schroder received his law degree from Wayne State University Law School in 2001 and his undergraduate degree, magna cum laude, from Albion College in 1997.

Established in 1913, Plunkett Cooney is a leading provider of business and litigation services to clients in the private and public sectors. The firm employs approximately 140 attorneys in seven Michigan cities, Chicago, Illinois; Columbus, Ohio; and Indianapolis, Indiana. Plunkett Cooney has achieved the highest rating (AV) awarded by Martindale-Hubbell, a leading, international directory of law firms. The firm was also selected by Crain’s Detroit Business as its inaugural Law Firm of the Year.

For more information about Plunkett Cooney’s newest shareholders, contact the firm’s Director of Marketing and Business Development John Cornwell at (248) 901-4008; jcornwell@plunkettcooney.com.

Merces Consulting Group’s Time Off, Retirement and Fringe Benefits Survey is now available for purchase

 

Date:  January 15, 2020

Contact:  Linda M. Budd, CCP

Merces Consulting Group, Inc. is pleased to announce their Time Off, Retirement and Fringe Benefits Survey is now available for purchase.  The report includes data on topics such as vacation/paid time off and retirement programs, tuition assistance, employee wellness and other benefits collected from over 100 manufacturing, banking and health center participants.  To purchase a copy of the report, contact Linda Budd, Merces’  Survey Administrator at 248.721.9561.

Mifsud joins Plunkett Cooney’s Insurance Coverage Group

DATE: December 30, 2019

CONTACT: John Cornwell (248) 901-4008

 

BLOOMFIELD HILLS, MI – December 30, 2019 – Attorney Linda Mifsud recently joined the Insurance Law Practice Group of Plunkett Cooney, one of the Midwest’s oldest full-service law firms.

A member of Plunkett Cooney’s Bloomfield Hills office, Mifsud represents major property and casualty insurance companies in coverage cases throughout the Midwest. Her coverage work primarily includes drafting research and coverage opinions regarding general liability policy issues and disputes.

A member of the State Bar of Michigan, Mifsud is a 2019 graduate of Wayne State University Law School. While there, she worked as a judicial intern for the Hon. Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan, served as a member of the Wayne Law Moot Court and she served as Editor-in-Chief of Wayne’s Journal of Business Law. Mifsud received her undergraduate degree from the University of Michigan in 2016.

Plunkett Cooney is recognized as one of the nation’s leading law firms for insurance coverage litigation. Several members of the firm’s Insurance Law Practice Group have been awarded the Chartered Property Casualty Underwriter (CPCU) designation. In addition to their litigation expertise, Plunkett Cooney attorneys work with their clients to develop new insurance products and to address emergent theories of legal liability.

Established in 1913, Plunkett Cooney is a leading provider of business and litigation services to clients in the private and public sectors. The firm employs approximately 140 attorneys in seven

Michigan cities, Chicago, Illinois; Columbus, Ohio; and Indianapolis, Indiana. Plunkett Cooney has achieved the highest rating (AV) awarded by Martindale-Hubbell, a leading, international directory of law firms. The firm was also selected by Crain’s Detroit Business as its inaugural Law Firm of the Year.

 For more information about Linda Mifsud joining the firm, contact the firm’s Director of Marketing and Business Development, John Cornwell, at (248) 901-4008; jcornwell@plunkettcooney.com.

Walsh joins Plunkett Cooney’s Commercial Litigation Practice Group

DATE:  January 7, 2020

CONTACT:  John E. Cornwell (248) 901-4008

 

BLOOMFIELD HILLS, Mich. – January 7, 2020 – Senior attorney Sean W. Walsh recently joined the Commercial Litigation Practice Group of Plunkett Cooney, one of the Midwest’s oldest full-service law firms.

A member of the firm’s Bloomfield Hills office, Walsh focuses his litigation practice in the areas of business insolvency, bankruptcy, employment law, intellectual property, real estate law and commercial financing transactions.

“Sean has extensive experience handling business matters and related litigation, and his practice provides further depth to our team,” said Matthew J. Boettcher, Co-Leader of Plunkett Cooney’s Commercial Litigation Practice Group. “In addition to his expertise, he’s dedicated to his clients and works tirelessly to get them the right results.”

Walsh represents business entities, stakeholders, officers and directors, among others, in an array of industries, including healthcare, construction, banking, automotive component part manufacturing and supply, to name a few.

Admitted to practice in state and federal courts in Michigan, Walsh received his law degree from the University of Toledo College of Law in 1993. He received his undergraduate degree in 1989 from Southern Methodist University in Dallas, Texas. He is a member of the State Bar of Michigan and is fluent in Spanish.

Plunkett Cooney’s Commercial Litigation Practice Group represents a range of clients in litigation, arbitration and other forms of alternative dispute resolution concerning matters that arise while conducting business. Practice group members have extensive experience in matters involving contract disputes, class action defense, business torts, real estate disputes, business ownership conflicts, bankruptcy, antitrust claims, corporate compliance issues, tax and finance issues, commercial collections, commercial landlord tenant, civil RICO, ERISA, intellectual property claims and many other areas.

Established in 1913, Plunkett Cooney is a leading provider of business and litigation services to clients in the private and public sectors. The firm employs approximately 140 attorneys in seven Michigan cities, Chicago, Illinois; Columbus, Ohio; and Indianapolis, Indiana. Plunkett Cooney has achieved the highest rating (AV) awarded by Martindale-Hubbell, a leading, international directory of law firms. The firm was also selected by Crain’s Detroit Business as its inaugural Law Firm of the Year.

For more information about Sean Walsh joining the Commercial Litigation Practice Group of Plunkett Cooney, contact the firm’s Director of Marketing and Business Development John Cornwell at (248) 901-4008; jcornwell@plunkettcooney.com.

Non-Discretionary Bonuses Affect Overtime Pay and Other Wage Issues

By:  Claudia D. Orr, Plunkett Cooney

 I was probably 7 years into my practice before I knew that, under the Fair Labor Standards Act, a non-discretionary bonus (one that is simply announced in advance, even if contingent) affects the regular rate of pay of a non-exempt employee and requires recalculation of the overtime for the period the bonus covers. It came to my attention after a young Human Resources Generalist, right out of college, told her employer, an international Fortune 500 company, which then called to ask me.  How I never came across this issue in my first 7 years of practice still amazes me. Incidentally, that young generalist has risen in the ranks over the years and is now an HR big shot with that company!

Well, the Department of Labor (DOL) issued an opinion letter yesterday on this very topic and it occurred to me that there may be employers out there who are unaware of this so I thought it best to inform Detroit SHRM members.

Let me explain the issue. A non-discretionary bonus is not what you think.  It is not one etched in stone that the employer must pay. It is a bonus announced in advance that encourages employees to work harder, be more efficient and perform better. The employer can still retain discretion to pay it or not based on overall financials, for example.

Let’s look at an annual bonus. At year end, once the bonus is paid to the nonexempt employee, the employer would need to divide the bonus by 52 to determine how much income is added to each week. This in turn affects the regular rate of pay of the nonexempt employee for each week, which then affects the calculations for any overtime worked each week. If the employee worked overtime during that year, the employer needs to pay the additional “half” time based on the new overtime calculations.

The new DOL opinion letter makes clear that the bonus can be spread between all of the weeks it covers when it can’t be attributed to any week in particular.  I thought you might be interested, especially if you hadn’t heard of this before. If you want to read the entire letter, click here:

https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/2020_01_07_01_FLSA.pdf

Incidentally, in case you missed it, minimum wage in Michigan jumped from $9.45 to $9.65 an hour on Jan 1, 2020. In addition, don’t forget that exempt employees must now be paid at the rate of not less than $684/week or $35,568/annually (and the highly compensated exempt employee not less than $107,432/annually). This is a great time to have your wage practices and job descriptions reviewed by an experienced employment attorney, such as the author.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association. She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. January 2020.

Supreme Court Decides NOT to Issue Advisory Opinion on the Constitutionality of the Paid Medical Leave and Improved Workforce Opportunity Acts

By:  Claudia D. Orr, Plunkett Cooney

 A divided Michigan Supreme Court ruled yesterday that it does not have the authority to issue an advisory opinion on whether the Paid Medical Leave Act and the Improved Workforce Opportunity Act were properly passed by the state legislature, stating in one short paragraph:

            On July 17, 2019, the Court heard oral argument on the requests by the House of Representatives and the Senate for an advisory opinion on the constitutionality of 2018 PA 368 and 2018 PA 369. On order of the Court, the requests are again considered, and they are DENIED, because we are not persuaded that granting the requests would be an appropriate exercise of the Court’s discretion.

Supreme Court Case Nos. 159160, 159201. While there was considerable debate concerning the reason why an advisory opinion should not be issued, and strong dissenting opinions in the 48 page opinion, this ends the suspense – for now.  The laws could be challenged directly in court, which would start the legal process over. But for the time being, both laws will remain as they were passed by the lame duck legislative session in 2018.

Let’s look back at what happened. As you may recall, there were two citizen initiatives that were to appear on  the November 2018 ballot which, among other things, would have (1) provided 40 hours of paid sick time to employees who work for smaller employers (having fewer than 10 employees) and 72 hours of paid sick time to employees working for employers with 10 or more employees; and (2) increased the minimum wage rate to $10/hour with additional yearly increases, bringing the minimum wage rate to $12/hour by 2022 and phasing out the tip credit by 2024.

If both initiatives became law by vote of the citizens, the Michigan Legislature could only change them by a three-quarters vote of all members of both chambers of the Legislature, rather than a simple majority vote.

But the citizen initiatives were removed from the ballot when the Legislature adopted both laws.  If that was the end of the story, we would not now have issues to be decided by the Supreme Court. After the November election, the Legislature amended both laws and then Gov. Rick Snyder signed the amended versions into law during the lame duck session. That’s the rub. Can they adopt and amend?

The amendments significantly watered down the benefits to employees, making both laws friendlier to employers.  For example, under the amended laws (which became effective March 29, 2019), paid sick time must only be provided by employers with 50 or more employees and then only 40 hours a year.  Similarly, the minimum wage rate was increased to $9.45/hour and it won’t reach $12/hour until 2030. In addition, the tip credit will stay in place.

Democrats in the Legislature asked the state’s new Attorney General Dana Nessel to opine on whether the so called “adopt and amend” process is constitutional under Article 2 § 9 of the Michigan Constitution, which begins by stating: “The people reserve to themselves the power to propose laws and to enact and reject laws, called the initiative, and the power to approve or reject laws enacted by the legislature, called the referendum.”

The Republicans made the same request of the Michigan Supreme Court, believing its conservative majority would provide a more pro-employer opinion. The Supreme Court agreed to hold oral arguments on the issue but did not commit to issuing an advisory opinion. It requested briefs from the attorney general’s office, arguing both for and against the constitutionality of the process that had been utilized by the Legislature and the new laws. On July 17, 2019, the Michigan Supreme Court held oral argument in In re Advisory Opinion on 2018 PA 368 & 369. It has now ruled.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association. She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2019.