MI Supreme Court Rules Adopt & Amend Unconstitutional: Tipped Minimum Wage to be Phased Out

Members, 

The Michigan Supreme Court just released ruled on the Adopt and Amend case, ruling 4-3 to overturn the lower court’s decision that Adopt and Amend was constitutional.

From the Court:
“Following the November 2018 general election, the lame duck Legislature voted to amend the laws in a manner that dramatically altered and virtually eliminated the changes voters sought through the initiative process. See 2018 PA 368 and 2018 PA 369. We hold that this decision to adopt the initiatives and then later amend them in the same legislative session (what has been referred to as “adopt-and-amend”) violated the people’s constitutionally guaranteed right to propose and enact laws through the initiative process. We therefore reverse the Court of Appeals’ judgment and reinstate 2018 PA 337 and 2018 PA 338 as set forth in this opinion.”

Read the Full Opinion Here

Why it matters:  
PA 337 and 2018 PA 338 will go back into effect in 205 days, with date adjustments made.

What it means:
• The tipped minimum wage will be abolished by 2029. The tipped minimum wage will gradually phase toward the regular minimum wage: 48 percent in 2025; 60 percent in 2026; 70 percent in 2027; 80 percent in 2028; 100 percent in 2029.

• The regular minimum wage will increase gradually. On February 21, 2025: The minimum hourly wage will be $10.00 plus the state treasurer’s inflation adjustment, using July 31, 2024, as the endpoint for that calculation.
       ○ February 21, 2026: $10.65 + inflation adjustment
       ○ February 21, 2027: $11.35 + inflation adjustment
       ○ February 21, 2028: $12.00 + inflation adjustment
       ○ February 21, 2029 and beyond: the state treasurer shall calculate the inflation-adjusted minimum wage

• All employees (full-time, part-time, etc.) will accrue a minimum of one hour of earned sick time for every 30 hours worked. Employees of small businesses, defined as employers with fewer than 10 employees, will accrue and use 40 hours of paid sick time per year and 32 hours of unpaid sick time per year. Employees of businesses with 10 or more employees will accrue and use 72 hours of paid sick time per year beginning February 21, 2025.

Employers must permit employees to use available earned sick time for the following reasons:

○ The employee’s or the covered family member’s mental or physical illness, injury or health condition; medical diagnosis, care or treatment of the employee’s or covered family member’s mental or physical illness, injury or health condition; or preventative medical care for the employee or covered family member;

○ Absences where the employee or covered family member is a victim of domestic violence or sexual assault; and

○ Meetings at the employee’s child’s school or place of care related to the child’s health or disability or the effects of domestic violence or sexual assault on the child.

• Mandatory overtime compensation of 150% for employees who work in excess of 40 hours during a workweek. Instead of receiving monetary overtime compensation, employees can choose to receive compensatory time off beginning February 21, 2025.

Unfortunately, this decision cannot be appealed. All of this information was just released, so what could potentially be changed via the legislature is still unknown. Our government affairs team will do everything we can to ensure a better outcome for small businesses.

We will continue to provide everyone with updates as soon as we have more information. Thank you.