
All Michigan employers — private, nonprofit and public — had to prepare for changes to minimum wages and paid sick leave rules that would have gone into effect on Feb. 21. Then legislators changed those rules at the last minute to mitigate their expected harms.
How much did it cost to prepare for a law that never went into effect?
It’s not the kind of question that has an easy answer. There’s no reporting on the legal costs to comply with changes in employment law.
But here are some numbers to put the economic damage into context.
There are 175,075 firms in Michigan, not including governments, according to the latest numbers from the Census Bureau. Some of those are likely to be firms that don’t employ anyone, but at least 102,005 of them employ five or more employees, so the majority are employers subject to the new rules.
There are 2,860 governments in Michigan, according to the latest numbers from the Census Bureau. It’s unclear how many are government units that don’t have any employees.
The average lawyer charges clients $250 an hour. Let’s say that all of Michigan’s labor lawyers are quick and can provide answers to employers in only two hours.
That comes to 177,935 potential employers getting charged $500, for a total cost of $89 million.
This seems high. Many companies belong to industry groups, local associations and other groups that keep an eye on what Lansing does and offer legal advice to their members. Not all employers need to hire a lawyer to answer their employment questions. However, some might need to hire additional legal services.
So as I said in the opening, I don’t think there’s a hard estimate out there. If you ask me, the legal costs to comply with a law that never happened are in the tens of millions but not hundreds of millions.
It probably couldn’t have been avoided once the Michigan Supreme Court put a deadline on when the rules would take effect. But it’s still a lot of money spent to prepare for rules that were cancelled.
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