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Updates To PMLA

(1-3 minute read)

 

On December 30, 2019, the State of Michigan Department of Labor and Economic Opportunity provided clarification related to temporary employees and the new requirements for PMLA in Michigan effective March 29, 2019.  In a letter, the State provided clear guidance that temporary employees who are contracted out to a third party are excluded from PMLA.  Employers may voluntarily choose to pay temporary employees PMLA but they are not required to do so under the March 29, 2019, PMLA Act.  Employees of a temporary firm who are not contracted out to a third party are subject to Michigan’s PMLA Act.

Michigan’s Paid Medical Leave Act applies to “any individual engaged in service to an employer in the business of the employer and from whom the employer is required to withhold for federal income tax purposes” but the Act has 12 specific employee exemptions, listed below: (read the full Act No. 369 here) (referenced from the Michigan Chamber of Commerce FAQ on PMLA).

Exemptions

  • An individual who is exempt from overtime requirements under section 13(a)(1) of the federal Fair Labor Standards Act, 29 USC 213(a)(1) (i.e., “any employee employed in a bona fide executive, administrative, or professional capacity or in the capacity of outside salesman”).
  • An individual covered under a private sector collective bargaining agreement that is in effect.
  • An individual whose primary work location is not in this state.
  • An individual who is being paid the youth minimum wage or training wage under section 4b of the improved workforce opportunity wage act, 2018 PA 337, MCL 408.934b.
  • Temporary employees as described in section 29(1)(l) of the Michigan employment security act, MCL 421.29.
  • A seasonal employee employed by an employer for 25 weeks or fewer in a calendar year for a job scheduled for 25 weeks or fewer.
  • A variable hour employee as defined in 26 CFR 54.4980H-1.
  • A part-time employee who worked, on average, fewer than 25 hours per week during the immediately preceding calendar year.
  • An individual employed by the United States government, another state, or a political subdivision of another state.
  • An individual employed by an air carrier as a flight deck or cabin crew member that is subject to title II of the railway labor act, 45 USC 151 to 188.
  • An employee as described in section 201 of the railway labor act, 45 USC 181.
  • An employee as defined in section 1 of the railroad unemployment insurance act, 45 USC 351.

The December 30, 2019 clarification for temporary employee exclusion provided much-needed guidance for both temporary staffing agencies and business which utilize their services.  Based on the guidance, companies can continue to use temporaries as a business strategy with assurance they are not violating PMLA in the State of Michigan.  Seasonal and temporary employees are generally utilized for short term projects or in the initial stages of the hiring process.

In the current job market, most temporary employees only stay temporary for a short period of time as they are generally hired into companies on a full-time basis leading to being offered full benefits including PMLA.  As with any regulation, if you are uncertain as to your specific use of temporary employees is compliant with PMLA you should contact your legal counsel for guidance.

The information provided in this post is for informational purposes only and not meant as legal guidance.

 

 

Date

January 17, 2020

Author

Axios HR

Category

Article Business Executives Under 50 Employees Compliance

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