Minimum Wage Increase & Paid Sick Leave Mandate Passed by Legislature

On September 5, 2018, the Michigan House and Senate passed Initiative Proposals 3 and 4 which will respectively raise the minimum wage to $12 per hour by the year 2022, and require all employers to provide at least 5 days worth of paid sick leave per year. The measures are set to take effect around April 1, 2019.

The passage of each proposal was controversial, even by legislators and interest groups who supported the ballot proposals. Because the initiatives were passed by the legislature, the proposals will not be on the Nov. 6 general election ballot. In addition, the legislature may now amend the proposals with a simple majority vote (56 votes in the House, 20 votes in the Senate), instead of needing a supermajority (3/4 of each body) should the measure have passed at the ballot.

Earned Sick Time Background

The proposal creates the Earned Sick Time Act, requiring businesses to provide employees with a minimum of one hour of earned sick time for every 30 hours worked.

The rules for small businesses, defined as less than 10 employees working during a given week (including part-time, full-time and temporary workers), would be slightly different. Small business employees would be entitled to use at least 40 hours of earned sick time in a year unless the employer selects a higher limit. If the employee accrues more than 40 hours, the employee would be entitled to use an additional 32 hours of unpaid earned sick time.

All other employees (those working for businesses with 10 or more employees working during a given week), will be eligible to accrue up to a minimum of 72 hours of earned sick time.

In both cases, employees would be entitled to use paid leave prior to using unpaid leave.

Minimum Wage Background

In 2014, legislation was passed and signed into law that gradually raised Michigan’s minimum wage requirement to $9.25 per hour over a four-year period.

Under the proposal passed by the legislature on September 5, the state’s minimum wage would now increase to $10 an hour in 2019, $10.65 in 2020, $11.35 in 2021 and $12 in 2022. The proposal would require annual adjustments for inflation beginning in 2023.

In addition, under the proposal, the minimum wage for tipped employees would increase from $4.80 in 2019 to $6.39 in 2020, $7.94 in 2021 and $9.60 in 2022. Tipped employees’ minimum wage would be 100 percent of the minimum wage by 2024. Under current law, all tipped employees are required to make at least the minimum wage using a combination of hourly wage and tip earnings. If their tips plus the tipped employee minimum wage does not equal or exceed the regular minimum wage, the employer must pay any shortfall to the employee.

Michigan’s minimum wage already outpaces Indiana ($7.25), Illinois ($8.25), Ohio ($8.10) and Wisconsin ($7.25).

Impact on Northern Michigan

The vast majority of businesses in northern Michigan are small businesses, and the potential impact to the region would likely be more significant. Small businesses in rural areas, in general, tend to have fewer resources available to deal with and offset increased labor costs and government mandates.

Many restaurant owners and service employees alike have decried the potential impacts of changing the tipped-earners wage to equal the state’s minimum wage. Servers fear that removing the tipped-earner wage will devastate the area’s tip culture, whereby patrons would offer less in tips knowing that servers earn a higher hourly wage.

These new laws seem here to stay in concept. Even though the legislature will be able to amend by simple majority vote, it is unlikely they will totally repeal the proposals. However, businesses in our region will now be in a position to seek legislative amendments to alter the new laws in a way that will allow a business greater flexibility and ability to manage the impacts.

The Chamber Alliance plans to continue to actively participate in future discussions about these measures and will share suggestions and amendment recommendations with legislators.

Please contact Alliance Director of Government Relations Kent Wood at kentw@tcchamber.org with questions or to share impacts.

Large Events Bill Too Narrow For Rural Michigan

Another proposed bill. Another proposed bill weighted against Northern Michigan.

Senate Bill 1068 (Sen. Ken Horn, R – Frankenmuth) would create a Large Special Event Fund in the state treasury with the goal of allowing local and regional Convention and Visitors Bureaus (CVBs) to apply to the fund in an effort to attract a large or special event to their market area.

The legislation is an attempt to overcome a disadvantage Michigan has with attracting large events – like a Super Bowl, Olympics, or NCAA Championship events. Events that bring in large amounts of visitors from out of state, and can be a boon to local small businesses before, during and after the event. Very few would disagree that having world-class events like that aren’t a benefit to the state.

The problem we believe is the out-of-state visitor thresholds required to apply for the fund (5,000 out-of-state visitors for Detroit, 1,500 out-of-state visitors for Grand Rapids, and 900 out-of-state visitors for other CVBs in the state – including northern Michigan CVBs) are clearly designed to make it challenging for any smaller market community to access the fund.

For example, while 5,000 people may seem like a lot, Detroit’s regional hotel room capacity to hold visitors is likely near 100,000 rooms, if not more. Sault Ste. Marie’s capacity is around 1,100. That means that in order for the Soo to qualify for an event, it would need nearly as many out-of-state guests as it has total capacity to hold all guests for an event. That doesn’t seem like a fair ratio.

Northern Michigan Chamber Alliance Director of Government Relations Kent Wood testified in Lansing on September 6th in front of the Senate Committee on Economic Development and International Investment.

Citing the Chamber Alliance’s moto of “One Size Does Not Fit All,” Wood asked legislators to work with the Alliance to craft the bill in a way that would truly allow communities and CVBs in all market sizes to compete for events that fit with the abilities and capacities of that market area. Amendments could include either lowering the 900 out-of-state threshold to a lower number, including a fourth lower limit or developing another metric that takes into consideration a community’s capacity to hold visitors.

Click Below to view the letter sent to legislators:

Alliance 1065 amendment letter_Aug 2018

 

2018 Virtual Candidate Forum

CLICK HERE TO VIEW 2018 VIRTUAL CANDIDATE FORUM

For Immediate Release: Virtual Candidate Forum for Aug. 7 Primary Launched

TRAVERSE CITY, MI ­­– Candidates for several local, state and federal offices across Northwest Michigan are highlighted in the 2018 Virtual Candidate Forum available now through the Northern Michigan Chamber Alliance and the Traverse City Area Chamber of Commerce.

The Chamber launched its latest version of its Virtual Candidate Forum in advance of the August 7 primary election. The Virtual Candidate Forum is available at: http://tcchamber.org/2018-virtual-candidate-forum/ 

The digital format highlights the candidates and includes their written responses to a series of questions on local regional, state and federal issues. They include candidates in the U.S. Senate Republican Primary, Michigan’s Governor’s race, the state Senate 35th and 37th districts, and state House of Representatives in the 101st, 104th, 107th and 108th districts. Candidates for the contested primary seats on the Grand Traverse County Board of Commissioners are also featured.

The Chamber Alliance debuted the Virtual Candidate Forum for the 2014 August primary election because of the large number of candidates in some of the area’s primary races. Because of the positive response from Chamber members and the public, the Traverse City Area Chamber and the Chamber Alliance have continued the digital forum in subsequent elections. The layout and format for the Virtual Candidate Forum was also upgraded this year with the help of Flight Path Creative in Traverse City, while the Chamber’s FUSE young professionals group assisted in preparing the questionnaire. The platform is supported by Cherryland Electric Cooperative.

“We’ve generated thousands of views through the Virtual Candidate Forum both from our membership and the general public,” said Kent Wood, Director of Government Relations for the Traverse City Area Chamber and Northern Michigan Chamber Alliance. “It provides the candidates an opportunity to share information about themselves and expound on issues important to the region’s business community and the public. It’s also available on a platform that allows voters to learn about the candidates when it’s convenient for them to do so.”

Questions can be directed to Wood at (231) 995-7109 or kentw@tcchamber.org

 

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