This article originally appeared in the Detroit News February 25, 2025.

The Michigan Legislature just reformed the twin catastrophes of paid sick leave and minimum wage, blunting the effects of these job-destroying policies. Policymakers deserve credit for this welcome fix. Three observations:

First: Well, that was close. The two laws were scheduled to take effect Feb. 21. The Legislature acted minutes (not hours) before the deadline and delivered the bills to Gov. Gretchen Whitmer in the middle of the night. Employers went to sleep on Feb. 20, woke up to a new regulatory environment, and are scrambling to understand the laws.

How did we get here? In 2018, out-of-state advocacy groups sent two ballot measures to the Legislature. One measure imposed paid sick time mandates on every employer in the state — every company, nonprofit and government entity. The other measure mandated minimum wage increases, eviscerating the tip credit that helps restaurant servers and bartenders earn well above minimum wage.

Rather than put the proposals on the ballot, the Legislature adopted both in 2018 and then amended the laws. Years of litigation followed. Last July, the Michigan Supreme Court shocked the business community by ruling that the “adopt and amend” maneuver was unconstitutional. The court ordered employers to comply with the original measures.

The Supreme Court’s decision triggered immediate concern. The Michigan Restaurant & Lodging Association estimated the ruling would force 20% of restaurants in Michigan to close, eliminating up to 60,000 jobs.

Second observation: Last week’s action shuffled traditional political allegiances. Republicans in the House and Senate saw the need for a fix, but they did not control all the necessary gavels. Democrats heard from alarmed restaurant owners and tipped employees in their districts. But labor unions, including the UAW, Michigan Education Association and the Michigan AFL-CIO, lobbied to leave the laws alone. Workers organized to speak for themselves and against organized labor.

Ultimately, multiple Democrats defied labor leaders, including Senate Majority Leader Winnie Brinks, D-Grand Rapids, progressive Rep. Noah Arbit, D-West Bloomfield Township, and Rep. Joey Andrews, D-St. Joseph, who worked for the AFL-CIO.

Third observation: While the final bills are a great improvement, Michigan’s leaders did not serve employees or employers well through this process. The political dithering is a terrible advertisement for the would-be entrepreneurs and job creators we hope to attract to Michigan.

Every business was in limbo for nearly seven months while policymakers argued. Last year, given the Democratic trifecta, the previous Legislature could have acted but instead frittered away the summer and fall with vacations and campaigning. Whitmer spent 2024 promoting her book about leadership but was absent on this issue, never signaling her position. Incoming House Speaker Matt Hall, R-Richland Township, called for action during lame duck, but was ignored.

In January, Republicans took control of the House and passed solid reform bills, but the Senate sat on the bills. With only days left to reach a compromise, Whitmer suggested lawmakers keep negotiating through June. All these unnecessary delays piled costs on companies, small businesses and charities.

As the Feb. 21 deadline approached, employers had to hire lawyers to figure out compliance, revamp sick time policies and educate their employees on the changes. Some restaurant owners called it quits rather than navigating the uncertainty, such as the fourth-generation Berger’s Family Restaurant in Bay City, which cited the labor environment when it closed for good on Aug. 31.

Given the last-minute legislation, employers will now have to rewrite policies and incur new compliance costs.

If Michigan’s leaders want to attract entrepreneurs and companies, they must provide stable and predictable governance. This episode illustrates that we’re not there.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.