In September 2018, Michigan legislators passed two initiatives that put employers on the edge of their seat. Suddenly, there were two new mandates for job providers to grapple with. One, an increase to the state’s minimum wage to $15 per hour that also removed the tip earner wage. The second, a mandate for all employers to provide at least 40 hours of paid sick leave to all employees – full-time, part-time, interns, etc.
A series of significant changes to both proposals were enacted in December during the lame duck session of the Michigan Legislature. The Chamber partners in the Northern Michigan Chamber Alliance strongly urged lawmakers to consider a series of amendments that were more palatable for small business owners in rural Michigan. The Chamber also supported the efforts of statewide business organizations like the Michigan Chamber and SBAM in making general changes that were good for businesses and employers across the state.
Those efforts were successful, and below is a recap and information on the changes and timelines that employers should know.
Paid Sick Leave Mandate
Need To Know: Read the Analysis
Legislators approved massive changes to the very punitive initiative language that was passed in September, including most of the Chamber Alliance’s suggested changes. Perhaps the most significant change was amending the mandate for all employers and going instead with companies employing over 50 people – meaning all small businesses and employers less than 50 will no longer be subject to the mandate.
Employment attorney Janis Adams (a board member of the Traverse City Area Chamber) published an informative article in the January edition of the Traverse City Business News.
The Michigan Chamber also released a FAQ on the new paid sick leave law. Click here to Read FAQ.
Need To Know: Read the Analysis
The legislature slowed the increase from $10.00 to $9.45 per hour in 2019, increasing incrementally to $12.05 per hour by 2030. Lawmakers also reinstated the special wage for tip earners (up to $4.58 by 2030) that restaurant owners and restaurant service workers alike were clamoring for. They believed that getting rid of the special wage would have a chilling effect on the amount of tips servers would bring in from restaurant patrons. Most of the time, when tips are included, servers make well above even the proposed $15 minimum wage.
What Does The Future Hold?
The saga may not be over, however. In January, organizers announced they would relaunch the ballot initiatives with the goal of putting them on the 2020 statewide ballot. Organizers believe new Michigan Governor Gretchen Whitmer will veto any future attempts at the legislature to amend the initiative language should the ballot proposal become law. While successful in these attempts to soften the blow for northern Michigan employers, this is a topic the Alliance will continue to follow.
The Northern Michigan Chamber Alliance is having an impact on more than a few priorities
during the month of December’s legislative session, often referred to as “Lame Duck” session.
Earned Sick Time Amendments (Amend & Support) (SB 1175)
Update: 12/17/18 – SIGNED BY GOV. SNYDER. The House (H-4) version passed on 12/4, was concurred by the Senate, and signed by the Governor. The changes include most of the amendments recommended by the Chamber Alliance. More to come on this as proponents of the initiated law have vowed to put the issue on the ballot again in 2020. If so, they are confident Governor-elect Whitmer would not sign amendments that go as far as those in SB 1175.
Minimum Wage Amendments (Amend & Support) (SB 1171)
Update: 12/17/18 – SIGNED BY GOV. SNYDER. Minimum wage amendments passed alongside the amendments to the Earned Sick Time Act, SB 1175. Michigan will still see the minimum wage rise to $12 over time, but the tip credit beloved by restaurant service workers was restored.
Salt Bill (Oppose) (SB 363)
Update: 12/21/18 – This bill, which could threaten dock and trucking jobs in northern Michigan, officially died. It is likely we will see it again next session.
Large Special events fund (Amend) (SB 1065)
Update: 12/21/18 – While SB 1065 did not advance, $1.5 million dollars was included in the budget supplemental passed early morning on 12/21 for Large Special Events. It is likely this funding gets used up for large Detroit events only.
Small Cell/5G wireless bill (Support) (SB 637)
Update: 12/14/18 -SIGNED BY GOV. SNYDER.
Brownfield Funding – Tipping Fees (SB 943)
Update: 12/21/18 -While this bill and a tipping fee increase was scrapped, the legislature passed other legislation to shift new sales tax coming in from online sales to environmental clean up projects.
CVB Bills (SBs 703-707)
Update: 12/20/18 – The package was passed overwhelmingly by the House and now goes to Snyder’s desk.
Line 5 Tunnel (SB 1197)
Update: 12/12/18 – (Gov. Snyder signed SB 1197 on 12/12). The House made quick work of this legislation in an afternoon. They took it up and passed it out of committee, passed it on the floor, sent it to the Senate who concurred with changes, and then sent it on to Governor Snyder who likely to sign it immediately. SB 1197 authorizes a utility tunnel underneath the Straits of Mackinac that would house Enbridge’s Line 5 pipeline, among other potential future utility uses. The tunnel deal with Enbridge and this legislation has been Governor Snyder’s number 1 priority in Lame Duck.
Stay tuned for more information and updates on these priorities.
Editor’s note: This article was published in Grand Traverse Business magazine’s Fall 2018 issue. For more stories from the magazine, click here to read GT Business in its entirety online.
By Kent Wood
The policy arena can be a contentious world on occasion. Every now and then, I’ll hear a comment about not understanding why the Chamber would take a policy position on a legislative or local issue.
I understand the sentiment behind the question. With more than 1,500 individual business members — which means more than 1,500 individual opinions — someone is bound to disagree. Someone may even drop their membership over the issue in question.
So why take that risk? Because the business community needs an advocate, and someone needs to do it.
As long-time Michigan capitol correspondent Tim Skubick once said, “if you aren’t talking with your legislators, somebody else is.” Chambers and business organizations that aren’t already engaging their elected leaders on policy issues important to their local economy should be. I can assure you that others who don’t have the prosperity of the business community in mind already are.
Chambers have been around since the middle ages, and it’s important to remember that a Chamber of Commerce’s first interest is exactly what is in its name — commerce. Commerce is what brings life and prosperity to a community, and when chambers take strong, clear positions and work together, they can be extremely effective for their communities.
Creating an environment that is favorable to commerce does not happen on its own. It requires leadership, and leadership can be hard. It means tackling large, complicated issues, sticking with issues that may not have a lot of support, and taking positions that may be controversial.
The chamber in Traverse City and the Northern Michigan Chamber Alliance — a partnership of more than a dozen Chambers and economic development organizations across northern Michigan and the U.P. — have worked together to impact legislation that is having, or would have had, direct impact on northern Michigan’s ability to do business and compete in the state and global economy.
For example, just in the past year, Chamber members and business advocates in this region have:
— Stalled a bill that would have given a state contract preference to a downstate salt company, which would have meant a loss in dock and trucking jobs in the region;
— Won a small, but hard-fought amendment in the state budget that will allow more rural-friendly competitive robotics program in schools, plus an additional $500,000 for competitive robotics grants to schools. Many small northern Michigan districts already are taking advantage of this win this fall, and we will see the impact of this in STEM fields for years to come;
— Pushing back on the Federal government’s tariffs on steel, aluminum and other products that, in particular, hurt small- and medium-sized manufacturers in our region;
— Made multiple, significant amendments to a bill creating a transformational brownfield program so it would allow northern Michigan communities to participate;
— Killed a bill that would have pre-empted local units of government from providing high-speed internet — a critical, yet hard-to-come-by commodity in rural areas. This bill would have killed the Traverse City Light & Power fiber internet project, something many businesses are clamoring for in Traverse City.
These are intentional actions taken directly in the interests of those doing business in northern Michigan. While everyone would like to stay focused on their piece of the pie, chambers should advocate to ensure there is a pie to begin with.
Chambers of commerce should and will continue to lead with a strong voice on issues that impact the business community and economy in our region. Of course we need to seek member feedback, keep open minds and remain professional in our approach. But we also need to stay true to our organizational missions, visions and values — all of which I’m sure require strong leadership to accomplish.
I’m proud to work alongside so many Chambers and other business associations that get involved in the nitty-gritty world of public policy work. There is no doubt it can be time consuming and often political, but in my view it is the most important thing our organization can do.
If business organizations aren’t advocacy leaders on behalf of a region’s business community, who will be?