Court of Claims Reversed; Earned Sick Time Act and Original IWOWA Will Not Go Into Effect On February 20, 2023

Employers in Michigan can breathe a sigh of relief in the wake of today’s opinion from the Michigan Court of Appeals ruling that the Michigan Legislature acted appropriately when it followed an “amend and adopt” strategy. Prior to that ruling, Michigan employers were faced with a February 20, 2023 deadline by which they would have to offer employees onerous earned sick time, as well as a higher minimum wage, as a result of an initiative that was adopted in 2018. The initiative-led legislation was amended by the legislature in a lame-duck session that resulted in a paid leave law and a minimum wage that were much less hostile to employers.

Last summer, the Michigan Court of Claims had ruled that the “adopt and amend” strategy was invalid under the Michigan Constitution – a conclusion that was rejected by the Court of Appeals in today’s opinion. As a result, the amended laws with which employers are already complying will continue to be in effect for the foreseeable future. Of course, this opinion is certain to be appealed to the Michigan Supreme Court, which could find the Court of Appeals to be in error, but for the time being Michigan employers can stand down from the frantic rewriting of their leave and compensation policies that was being driven by the February 20 deadline.

Dykema continues to monitor these developments and will issue further alerts as matters progress.