Michigan Supreme Court clarifies decision on wages

METRO DETROIT — The Michigan Supreme Court, following a request for clarification by the state of Michigan, provided a more definitive ruling Sept. 18 on the changing minimum wage and earned sick time in Michigan.

The court confirmed that the Improved Workforce Opportunity Wage Act and the Earned Sick Time Act will both go into effect on Feb. 21, 2025. Changes to the wage rates will occur each year on Feb. 21 after this point. Rates for the upcoming year’s increase will be published by the state’s treasurer Nov. 1.

The minimum wage this coming February will be $10 plus the state treasurer’s adjustment for inflation, which according to information in the motion for clarification will bring it to $12.48. The additional adjustment will be made using July 31, 2024, as an endpoint. Tipped workers must make at least 48% of this.

These wages will continue to incrementally rise. In 2028, the minimum wage will be $12 plus the treasurer’s adjustment for inflation, which the motion indicated will be $14.97. The tipped workers minimum hourly wage rate must be at least 80% of minimum wage in 2028. From this point forward, the treasurer will need to determine the wage. By 2030, the minimum wage gap between tipped and non-tipped workers should be closed.

The rate of inflation was also questioned by Nessel. The court clarified that the treasurer will bring the minimum wages in the Wage Act current to July 31, 2024, through an inflationary catch-up beginning Jan. 1, 2019.

Justice Brian K. Zahra wrote the dissenting opinion Sept. 18  and adhered to his reasoning for initially dissenting to the July 31 opinion. He was joined by Justice David F. Viviano.

“A majority of this Court has no authority to rewrite unambiguous statutory provisions in pursuit of its subjective understanding of ‘equity.’ Such power is vested with the Legislature, not the judicial branch, and no case available to the Court in Michigan or any other jurisdiction in this nation has adopted or condoned the extraordinary remedial actions taken in this case by the Court, both in the initial opinion and in the instant order,” Zahra states.

“I respectfully note that the time to relitigate the opinion’s merits has passed,” Justice Elizabeth M. Welch said in part in her concurring opinion.

Michigan Attorney General Dana Nessel set Sept. 15 as a deadline for the Michigan Supreme Court to clarify aspects of its initial ruling on the Wage Act. This deadline came and went, but the court had the ability to provide clarity prior to the state treasurer publishing the final wage calculations on Nov. 1.

This all comes after the court made a 4-3 bombshell ruling on the Improved Workforce Opportunity Wage Act and the Earned Sick Time Act on July 31, affecting the state’s laws governing minimum wage and sick time.

The ruling was years in the making. It’s the result of wrangling to keep the issue off the ballot in Michigan by legislators against the changes.

It started with two petitions in 2018 that received the required number of signatures to potentially appear on the ballot.

One petition would have given workers gradual wage increases until the minimum wage became $12 in 2022. After 2022, the wage would be increased each year, as determined by the state, according to inflation. The minimum-wage gap between tipped workers and all other workers, 38% in 2018, would be eventually closed by 2024.

The other petition required employers to give employees one hour of paid sick time for every 30 hours worked per week.

The Legislature adopted the unaltered initiatives in September 2018. This kept them off the ballot and allowed lawmakers to alter them.

They did this in two bills. One caused the minimum wage increases to not exceed $12 until 2030 and removed the increases for tipped workers. It also removed increases to the wage based on inflation. The second made changes to sick time. It exempted employers with under 50 employees from providing paid sick time. It reduced the amount of paid sick time hours for larger businesses from 72 hours to 40.

The changes, led by Republicans, were approved along party lines by margins of 60-48 in the Michigan House of Representatives and 26-12 in the state Senate in a lame duck session in December 2018. They were signed by then-Gov. Rick Snyder and went into effect March 29, 2019.

In the Michigan Court of Claims, it was determined that the Amended Wage Act and the Amended Earned Sick Time Act were unconstitutional on July 19, 2022. This was reversed by the Michigan Court of Appeals, but was ultimately upheld by the Michigan Supreme Court’s July 31, 2024, ruling.

After the July 31 ruling, Nessel made a motion to clarify the ruling on Aug. 21.

“Respectfully, the Michigan Department of Treasury has read this Court’s opinion in earnest and believes there exist ambiguities as to how to interpret and implement this Court’s directives in accounting for inflation for the graduated wages for the 2025 through 2028 time period,” the motion states.