The Michigan Court of Appeals has reversed a lower court opinion that would have allowed for a minimum wage spike and expanded paid sick leave for employees under state law. Absent further court action, the law remains unchanged, and employers will not have to comply with more generous provisions of an earlier version of the law.

Due to the higher court ruling, employers only need to provide 36 hours of mandatory sick leave instead of the proposed 72 hours. Also, the state minimum wage will increase at a much slower pace. Before the Michigan Court of Appeals ruling, the minimum wage would have jumped from $10.10 per hour to above $13 per hour on February 19, 2023. Along with halting the minimum wage increase, the ruling preserves the tipped wage, which was set to expire, decreases the amount of mandatory paid sick leave, and allows businesses with fewer than ten workers to be exempt from the leave requirements.

Background

The Earned Sick Time Act (ESTA) was submitted to the Michigan legislature in 2018 as a ballot initiative. The legislature adopted the measure after the 2018 election to limit the employee leave rights it provided. The amended law was renamed the Paid Medical Leave Act (PMLA); it took effect in 2019.

The amendment procedure was challenged in court, and the Michigan Court of Claims declared the amended law unconstitutional in July 2022, ordering that the original ESTA take effect. However, the order was delayed through February 19, 2023, pending appeal. On January 26, 2023, the Michigan Court of Appeals reversed the lower court’s decision, upholding the legislature’s amendments and the validity of the PMLA. This means the existing, more employer-friendly PMLA will remain in effect. But employers should anticipate that the Court of Appeals decision will be appealed to the Michigan Supreme Court.