Michigan House, Senate at odds as minimum wage and sick leave laws loom

• Michigan lawmakers considering changes to wage and sick leave laws set to take effect Feb. 21
• House, Senate remain far apart on competing plans, but business groups express optimism for potential compromise
• Among the sticking points: How or if paid sick leave law should apply to small businesses

LANSING — With 10 days until sweeping changes to Michigan’s minimum wages and paid sick time laws go into effect, the state's Republican-led House and Democratic-led Senate remain far apart on proposals to overhaul the pending policies.

The Senate Regulatory Reform Committee met Tuesday for debate on a proposal to change court-ordered paid leave rules before they are implemented Feb. 21 — but adjourned without votes. The panel is scheduled to meet again Wednesday.

Still, Wendy Block at the Michigan Chamber of Commerce said she was "encouraged with the direction" of ongoing discussions in Lansing and “cautiously optimistic a deal can be reached” in coming days. 

Business groups contend the paid sick leave rules are overly burdensome and, if not scaled back, could spell cataclysm for their industries. Restaurant groups say a scheduled phase-out of the state's lower wage for tipped workers would effectively end the traditional tipping system that has benefited some servers. 

Unions and some worker groups, however, want to retain rules first envisioned in a 2018 petition drive that a Republican-led Legislature quickly weakened in a move the Michigan Supreme Court later deemed unconstitutional. 

Related: 

• Michigan wage and sick day rules: 5 things to know about proposed changes
• A million Michigan workers may lose sick leave guarantee under House plan
• Michigan minimum wage to rise, tipped wage to disappear, under blockbuster ruling

Without legislative changes, the high court court ruling will require Michigan's minimum wage – currently $10.56 — to rise to nearly $15 an hour by 2028, and the lower wage for tipped workers would be phased out. All businesses will also have to provide paid sick leave to their employees — up to nine days off at larger firms, and up to five days off at firms with fewer than 10 employees — starting later this month.

Gov. Gretchen Whitmer, who has taken no specific stance on the policy changes she’d like to see, announced Tuesday she is in the United Arab Emirates and Bahrain for a trade mission. As acting governor, Lt. Gov. Garlin Gilchrist would still be able to sign legislation in her absence should lawmakers strike a deal. She is scheduled to return Feb. 19, two days before the deadline.

Michigan's GOP-led House approved legislation last month that would scale back the sick leave rules and retain the lower tipped credit for restaurant workers. The Democratic-led Senate is considering its own plan, which would raise but not eliminate the tipped credit, but has not yet voted on any components. 

The proposals have some significant differences, including: 

• Sick leave: The House legislation would exempt businesses with 50 or fewer employees from the sick leave law. The Senate plan would require all businesses to provide paid sick time, but businesses with 25 or fewer employees would only need to provide 40 hours off (along with 30 hours unpaid), compared to 72 hours at larger firms. 
• Minimum wage: Another Senate bill would also increase the minimum wage to $15 by 2027, faster than what the court prescribed, and two years ahead of the House’s date. 
• Tipped wage: Under the House’s plan, the tipped wage wouldn’t change at all. It would remain at 38% of the standard minimum wage – currently $4.01. The Senate plan, meanwhile, would have the tipped wage slowly grow to 60% of the regular minimum wage by 2035, but it would not be fully phased out.

Tuesday’s testimony in the Regulatory Reform Committee focused on proposed changes to the sick leave laws, with a parade of business owners and interest groups urging exemptions from the sick time requirements.

Under the House plan, businesses employing about 1.2 million workers would not be required to provide paid sick leave. However, small business advocates say many companies already offer it voluntarily.

Business groups are urging the Senate to consider similar exemptions. 

"The smallest of small businesses cannot deal with this — the direct and indirect costs,” said Amanda Fischer, with the Michigan chapter of the National Federation of Independent Business.

But Ryan Sebolt of the AFL-CIO cautioned against any small business exemption, arguing that even the current Senate plan goes too far by cutting available sick days at firms with 25 or fewer workers. 

“Workers at all businesses, including small businesses, deserve sick leave,” Sebolt said, reminding lawmakers that “Michigan workers were unconstitutionally denied wages and benefits for the last six years” when the Legislature weakened the laws in 2018.