What Michigan’s Paid Sick Leave Proposal Means for Small Businesses

The Michigan Paid Sick Leave Initiative is currently under consideration by the State Legislature and might be appearing on the ballot on Nov. 6, 2018.

What does this mean for Michigan business owners?

If passed, this measure will require businesses with 10 or more employees to provide paid sick time at the rate of at least one hour for every 30 hours worked. Employees would be able to accrue and use up to 72 hours per year of paid sick time for their own medical needs or those of their family members.

Smaller businesses with under 10 employees will be required to use the same minimal accrual of one hour of paid leave per 30 hours worked, but their mandated cap for paid sick time will be 40 hours per year. If an employee uses all 40 hours, he or she will be entitled to another 32 hours of unpaid sick leave without jeopardizing employment. (See the Initiation of Legislation for a complete copy of the proposal.)

Keep in mind that many Michigan businesses already offer sick time benefits that meet these requirements.

Is this good for Michigan residents?

Proponents of the initiative feel that employees should not have to risk their pay in order to stay home due to illness. They state that nearly 2 million residents of Michigan are not covered by a comprehensive sick time policy and risk losing pay or even getting fired because they are sick or need to stay home with a sick child. The initiative, they say, will boost income stability and employment, with a net positive effect on the economy.

Supporters of this initiative also claim that when sick employees stay home, workplace illness declines overall since common colds and flu will not spread throughout the company.

Have other states tried this?

Currently, only 10 other states plus the District of Columbia have mandatory state-wide sick leave policies in place.

How have these policies worked out in reality?

The Employment Policies Institute reports that the results have not been as promising as labor activists and proponents had hoped.

According to a review of the 10 most significant studies done regarding the effects of mandatory sick leave laws, they do not noticeably reduce the occurrence of workplace illness. They also failed to reduce employee turnover and they removed the competitive edge of the many businesses that already supplied paid sick leave. In addition, businesses that opposed the initiative were usually those who could not afford it, and when forced to institute it, had to raise prices, reduce wages and/or hours, or even lay off employees.

What’s the status of the proposal?

As of late July, the Michigan Board of State Canvassers certified the signatures necessary to get the proposal on the ballot. Meanwhile, the State Legislature has until September 5 to address and possibly pass the initiative. If they reject it or take no action, the initiative will be on the ballot on November 6 and the decision will be up to voters. Legislators can also propose an alternative measure that could appear on the ballot along with the original initiative.

In the meantime, what should small business owners do?

Assess your current policy and see if it is or isn’t in compliance with the requirements of the initiative. The team at Axios HR can help you work through the details of your policy, including the viability of the system being used to deliver sick time benefits.

If you don’t have a paid sick time policy or you have one that doesn’t meet the proposal’s requirements, now is a great time to assess what you’ll need to do to formalize the policy in case the initiative passes. Contact the team at Axios HR for guidance so you’ll be in good standing no matter which way the vote goes.

 

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Date

September 30, 2018

Author

AXIOS HR

Category

Article Blog Entries Cost