A recent Michigan Court of Claims ruling is placing agriculture and forestry employers at risk of unique challenges with the state’s minimum wage and paid sick leave laws if the Court of Appeals determines the decision stands.
In response, Michigan Farm Bureau alongside nine commodity organizations filed an amicus brief. An amicus brief is a concise written submission to provide the courts industry specific information and legal arguments for the case, of which the groups are not directly engaged in, before making its final ruling.
Filed on Sept. 30, the brief indicates the poorly written minimum wage and paid sick leave requirements in question are estimated to cost agriculture and forestry employers around $83 million annually.
According to Michigan Farm Bureau’s lead economist, Loren Koeman, most of the employees impacted earn wages that far exceed these new minimum wage levels and earn paid sick leave.
“These types of policies often have the effect of actually harming the employees they purport to help,” Koeman said. “In the end, they would cost agriculture and forestry jobs through failed businesses, moves to mechanization and further increasing the movement of production to international competitors.”
Joining Michigan Farm Bureau in filing the brief: Greenstone Farm Credit Services, Michigan Pork Producers Association, Michigan Milk Producers Association, Michigan Allied Poultry Industries, Michigan Vegetable Council, Michigan Soybean Association, Cherry Marketing Institute, Michigan Association of Timbermen and Michigan Christmas Tree Association.
The root cause of the issue lies in the July 19 ruling by Michigan Court of Claims Judge Douglas Shapiro in the case Mothering Justice, et al. v. Dana Nessel. The opinion declares it was improper for the Michigan Legislature to adopt two 2018 ballot initiatives related to minimum wage rates and paid sick leave, only to then amend them during the same legislative session. This was done to avoid the ¾ majority needed to alter a ballot initiative after it has been passed.
The decision contends that the “adopt and amend” strategy subverts the constitutional rights of Michigan voters to directly enact legislation. However, the authority of the legislature to amend laws is not explicitly limited in the Michigan Constitution, and no one knows whether these ballot initiatives would have ultimately been successful.
While the constitutional debate is important, of immediate concern is that with the amended 2018 acts ruled unconstitutional, Shapiro ordered an immediate return to the initially adopted public acts incorporating the proposed ballot initiative language.
Employer impacts
Koeman said that employers do not have to immediately make changes to comply but should stay tuned as the situation develops.
Returning to the initially adopted public acts has broad impacts on employers, including, but not limited to:
- Increasing in the minimum wage rate to $12 per hour,
- Increasing the tipped minimum wage from $3.75 to $9.60 per hour,
- Providing all employees one hour of paid medical leave for every 30 hours worked, and
- Up to 72 hours of paid sick leave annually, with smaller businesses under 10 employees required to grant 40 hours of paid sick leave and 32 hours unpaid.
Any person or entity who employs at least one person is required to comply with the paid sick leave requirements, while any person or entity who employs two or more employees at any one time within a calendar year must comply with the minimum wage requirements.
“Such a change would have a dramatic impact on Michigan’s economy, compounding numerous supply chain issues and inflation concerns,” Koeman said.
For these reasons, the Michigan Attorney General requested a stay of Shapiro’s ruling pending an appeal to the Michigan Court of Appeals. On July 29, Shapiro granted a stay until Feb. 19, 2023. This will allow the status quo to continue while the appellate courts review Shapiro’s opinion and the constitutionality of the “adopt and amend” strategy.
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