Two unwieldy laws regarding sick leave and the minimum wage are set to go into effect at the end of February. They are written so poorly that the effects on Michigan workers, businesses and consumers could be massive. Together, they should be referred to as the “jobless bills.”

The history of these proposals is unique, but not in a good way. Michigan law allows citizen’s initiatives, in which groups can gather enough signatures to propose a law to the legislature. Lawmakers then have three options. They can vote to accept that and pass it into law, reject it and let citizens vote on the proposal at the ballot, or propose their own changes to the law.

In this case, out-of-state interests in 2018 bankrolled the gathering of enough signatures to present laws regarding mandatory paid sick leave and a higher minimum wage to the Michigan Legislature. Lawmakers amended the current laws to moderate their effects. But in 2024, the Michigan Supreme Court ruled that these reforms violated the state Constitution and ordered the laws put into place.

Now, these are laws. That is, legislators can change them. And they are so poorly written, with such potentially devastating effects, that legislators on both sides of the political aisle have proposals for reforms. Here’s what the bills would do:

Paid sick leave
The law set to go into effect requires all businesses to offer 72 hours (nine days) of paid sick leave each year. For businesses with fewer than 10 employees, only 40 of those hours must be paid. There are exemptions for government units, but not small businesses, nonprofits, part-time, seasonal, temporary or emergency workers.

The sick leave law applies to workers as well as other family members. It can be physical or mental illness or preventative care. The workers can take the sick leave in as small of increments as the business can track — so, hypothetically, a worker could repeatedly be late for work and just claim he or she was taking sick leave. And an unlimited amount of sick leave can be rolled over.

The law sets up a legal standard known as a “rebuttable presumption,” meaning that employers would be presumed guilty of violating the act if they take action against employees they think are abusing their paid sick leave. Specifically, if an employee complains, argues, disputes or speaks at all about his or her rights under this law, the employer cannot demote or fire that employee within 90 days of the complaint. The result of this could be widespread abuse as employers, pinned into a no-win position, will rarely challenge employees’ use of sick leave.

Minimum wage
The minimum wage law set to go into effect increases to $12.50 per hour and then up to about $15 per hour by 2028. Right now, every worker in Michigan has to make the minimum wage, but those who earn tips can have that applied to that wage. This is known as the “tipped credit.” The proposed law set to go into effect eventually eliminates this tipped credit in 2030.

How to make things better
Lawmakers need to fix these jobless bills. For sick leave, they should exempt employers who already offer 72 hours of leave per year. Small businesses (which the federal government considers under 50 employees) should be exempt, and this law shouldn’t apply to part-time workers, seasonal employees or independent contractors.

The time increment issue should also be fixed. Workers could be required to take at least half a day of leave or some manageable and easily trackable amount of time. And employers should be allowed advance notice when people miss work. The legal changes for a private right of action and the rebuttable presumption should be dropped.

Mandatory government wage rates are always a bad idea. They lead to fewer jobs, especially for entry-level workers. It’s the market that sets wages — which is why few workers today actually make the minimum wage and fast food restaurants are paying $15 per hour or more. Increasing the minimum wage to $15 per hour will cause problems if not lessened. But at the very least, the tipped credit should be preserved.

The problem with the jobless bills is that they assume every business and every worker is the same. But they aren’t. Businesses are different sizes, produce different products, serve different customers and have differing abilities. Workers have different attitudes and aptitudes, and they respond to different incentives. If a business can’t afford these mandates, it will pass the costs on to customers, shut down, or become less willing to hire.

Fewer businesses, fewer workers and higher prices are the most likely effects. That’s bad for everyone.

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