Michigan Supreme Court Reinstates Minimum Wage and Paid Sick Leave Laws

A man crosses the street in front of the Michigan State Capitol building in Lansing, Mich., on April 1, 2024. (Spencer Platt/Getty Images)

The Michigan Supreme Court has ruled that the state Legislature’s 2018 actions to adopt and then amend two ballot initiatives were unconstitutional, reinstating the original measures to boost the state’s minimum wage and establish paid sick leave while giving employers a phase-in period to adjust to the new requirements.

In a 4–3 split decision issued on July 31, the high court determined that the so-called “adopt-and-amend” strategy used by the Michigan Legislature violated the state constitution.

“By attempting to both reject an initiative and sidestep the people, adopt-and-amend impermissibly ’thwart[s]‘ the power that the people reserved for themselves,” reads the majority opinion. “As we have held, the people’s reserved power under Article 2, § 9 must ’be saved if possible‘ from ’evasion or parry by the legislature.'”

The case stems from two petitions that were circulated in Michigan in 2018. One was to raise the minimum wage to $12 per hour by 2022 and to eliminate the lower minimum wage for tipped workers. The other was to require employers to provide paid sick leave.

The Legislature initially adopted both measures to prevent them from going to a public vote but then amended them during the same session, significantly weakening the original proposals.

“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,” the majority wrote in their opinion.

Michigan Ballot Rules

Under the Michigan state constitution, when a petition is approved for the ballot, the Legislature can either pass it as a law, let the public vote on it, or propose a modified version for the public to vote on. The state Supreme Court determined that when the Legislature adopted and then changed the two proposals without a public vote, it violated Article 2, § 9 of the state constitution.

The state Supreme Court reversed lower court judgments and ordered that the original versions of the laws, as proposed by the 2018 petitions, be reinstated, with a 205-day transition period to allow employers to comply.

Chief Justice Elizabeth Clement, along with Justices David Viviano and Brian Zahra, dissented. They argued that the Legislature’s power to amend laws is not explicitly restricted by the state constitution.

“The majority has failed to justify its holding that Article 2, § 9 allows the Legislature to amend a law proposed in an initiative petition after enacting it but that the Legislature may not amend it in the same legislative session,” Chief Justice Clement wrote in her dissent. “The Legislature was therefore allowed to amend the Wage Act and the Earned Sick Time Act in the same legislative session.”

Zahra’s dissent went further, accusing the majority of overstepping its judicial role by not only voiding the legislative amendments but also by reviving—and even altering—the original 2018 initiatives.

For instance, the court reset the wage increases to start 205 days after the opinion was published, as if that day were Jan. 1, 2019, and linked future wage increases to this adjusted timeline, while directing the state treasurer to account for inflation between 2018 and 2024.

Zahra claimed this was a form of judicial legislation because it created a new schedule that was never part of the original initiatives.

“In the clearest way possible, the Court exercises legislative power, drafting new legislation that has never been approved by the Legislature or approved by the voters,” Zahra wrote. “Without a single vote of support from the elected Legislature or the citizens, this Court has now written the public policy of this state as to minimum wages, tipped wages, and earned sick time.”

Effects of Ruling

Michigan’s Supreme Court ruling sets a new minimum wage scale starting in 2025, with adjustments for inflation. The minimum wage will gradually increase from $10 plus inflation in 2025, with tipped workers earning 48 percent of that. The wage will rise to $12 plus inflation by 2028, with tipped wages increasing to 80 percent of the minimum wage. By 2029, the tipped wage credit will be eliminated, and the state treasurer will handle all inflation adjustments.

The court also reinstated the 2018 initiative version of a law governing paid sick leave, ordering employers to provide up to 72 hours of paid sick leave annually, with a 205-day transition period for compliance.

The Michigan Chamber of Commerce, a strong opponent of the ruling, expressed concern about its impact on businesses and its implications for the separation of powers between legislative and judicial branches.

“The Michigan Chamber is frustrated and disappointed with the Court’s activism,” Jim Holcomb, president and CEO of the Michigan Chamber, said in a statement. “We need more rule of law justices who uphold this critical separation and do not legislate from the bench.”

Wendy Block, senior vice president of business advocacy for the Michigan Chamber, said that the ramifications of the decision would be felt by the hospitality industry and workers alike.

“It’s difficult to imagine how our state’s restaurants and hospitality establishments will absorb this large of an increase in their labor costs or how employers will make the required sweeping and costly changes to their leave policies without drastically cutting back elsewhere,” she said.

The chamber called on the Legislature and governor to take swift action to mitigate the effects of the ruling.