The Sophisticated Employer Blog

I’m having flashbacks to when the regulations increasing the minimum threshold for white collar exemptions under the Fair Labor Standards Act were struck by a federal district court in Texas on Nov. 22, 2016.

The regulations, which would have required white collar exemption salaries to be no less than $913/week, would have taken place on Dec. 1, 2018, just eight days later!  By then, most employers had already determined which of its exempt employees would need to receive a salary increase and which would be reclassified as non-exempt and eligible for overtime. Many had already notified the affected workers.

This could have been made worse if the 2016 regulations had already taken effect when they were struck. Well, that is what may happen to Michigan’s new Paid Medical Leave Act and the Improved Workforce Opportunity Wage Act, which are now being challenged by the Michigan Legislature. Odd, you bet, given that it was the Legislature that just passed both laws at the end of their 2018 regular session.

But, with new legislators, come new voices. The issue is whether citizen led ballot initiatives, which would have placed more employee friendly versions before the voters in November, can be adopted by the Legislature and amended (to be more employer-friendly) during the same legislative session. As you likely know, both laws took effect on March 29, 2019. 

Why was this process followed last fall by the Republican majority Legislature? Because had the voters passed the laws, they could only have been amended or repealed by a subsequent vote of the citizens or by a ¾ vote of the members in both chambers of the Legislature.  By adopting the law, and taking it off the November ballot, the Legislature amended both laws by a simple majority of the vote and during the same 99^th Legislature session that had adopted the bills just months earlier.  That is the rub. Can they do that? 

Democratic State Sen. Stephanie Chang asked the new democratic Attorney General Dana Nessel to weigh in on the issue. To side step that maneuver, Republicans in the Legislature asked the Michigan Supreme Court to review the matter and issue an advisory opinion. The majority of the justices on the Supreme Court are generally viewed as being more conservative, but there have been some who have been swing votes recently.

On April 3, 2019, the Supreme Court issued an order that states it will “consider” whether to issue an advisory opinion. It has invited both chambers of the Legislature (and any of its members) to submit briefs on: (1) whether the court should issue an advisory opinion, (2) whether the Legislature was permitted under Article 2, § 9 of the state constitution to “enact an initiative petition into law and then amend that law during the same legislative session,” and (3) whether the two laws were properly enacted. The Supreme Court also respectfully asked Attorney General Nessel to submit separate briefs arguing both sides of those issues.

Briefs supporting the constitutionality of the enacted legislation are due on May 15 and those arguing against are due on June 19. Amicus curiae briefs by interested parties are only permitted by leave of the court.

For those who are interested in watching oral argument, the hearing will be streamed live on July 17, 2019 at 9:30 a.m. Click here for further information. Sometimes you can get a sense for which way the justices are leaning by the questions asked. While the Supreme Court has not yet agreed that it will issue an advisory opinion, given the importance of these issues, we may see one as early as August.

So, what could happen? I hate to speculate, but if the laws were not properly amended, the original laws, as adopted by the Legislature, may be back in play. That means that minimum wage could jump to $10 hour. Also, the original earned sick leave act applied to small employers having fewer than 10 employees, requiring them to provide not less than 40 hours of paid sick time a year and all other employers to provide not less than 72 hours of paid sick time a year. There are many other pro-employee differences as well.

At least this time around the already implemented changes, if struck down, should not result in lower employee morale since the alternatives would likely be beneficial to workers. Of course, this is all speculation at this point. Stay tuned!