SB-1171, As Passed Senate, November 28, 2018

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 1171

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2018 PA 337, entitled

 

"Improved workforce opportunity wage act,"

 

by amending sections 3, 4, 4a, 4d, 10, and 15 (MCL 408.933,

 

408.934, 408.934a, 408.934d, 408.940, and 408.945).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. An employer shall not pay any employee at a rate this

 

that is less than prescribed in this act.

 

     Sec. 4. (1) . Subject to the exceptions specified in this act,

 

the minimum hourly wage rate is:

 

     a. Beginning January 1, 2019, $10.00.

 

     b. Beginning January 1, 2020, $10.65.

 

     c. Beginning January 1, 2021, $11.35.

 

     d. Beginning January 1, 2022, $12.00.

 

     (a) Before September 1, 2014, $7.40.

 

     (b) Beginning September 1, 2014, $8.15.

 


     (c) Beginning January 1, 2016, $8.50.

 

     (d) Beginning January 1, 2017, $8.90.

 

     (e) Beginning January 1, 2018, $9.25.

 

     (f) Beginning January 1, 2019, $9.48.

 

     (2) Every October January 1 beginning in October, 2022, 2020,

 

the state treasurer shall calculate an adjusted minimum wage rate

 

shall be increased by $0.23 until it equals $12.00. The adjustment

 

shall increase the minimum wage by the rate of inflation. The

 

increase shall be calculated by multiplying the otherwise

 

applicable minimum wage by the 12-month percentage increase, if

 

any, in the consumer price index for urban wage earners and

 

clerical workers, CPI-W, or a successor index, as published by the

 

bureau of labor statistics of the United States department of

 

labor, based upon the most recent 12-month period for which data

 

are available. The adjusted minimum wage rate shall be published by

 

November 1 of the year it is calculated and shall be effective

 

beginning January 1 of the succeeding year.

 

     (3) An increase in the minimum hourly wage rate as prescribed

 

in subsection (2) does not take effect if the unemployment rate for

 

this state, as determined by the bureau of labor statistics, Bureau

 

of Labor Statistics, United States department of labor, for this

 

state Department of Labor, is 8.5% or greater for the year

 

immediately preceding the year of the prescribed increase. An

 

increase in the minimum hourly wage rate as prescribed in

 

subsection (2) that does not take effect pursuant to this

 

subsection takes effect on the first January 1 for which the

 

unemployment rate for this state, as determined by the Bureau of


Labor Statistics, United States Department of Labor, is less than

 

8.4% for the year immediately preceding that January 1.

 

     Sec. 4a. (1) Except as otherwise provided in this act, an

 

employee shall receive compensation at not less than 1-1/2 times

 

the regular rate at which the employee is employed for employment

 

in a workweek in excess of 40 hours.

 

     (2) This state or a political subdivision, agency, or

 

instrumentality of this state does not violate subsection (1) with

 

respect to the employment of an employee in fire protection

 

activities or an employee in law enforcement activities, including

 

security personnel in correctional institutions, if any of the

 

following apply:

 

     (a) In a work period of 28 consecutive days, the employee

 

receives for tours of duty, which in the aggregate exceed 216

 

hours, compensation for those hours in excess of 216 at a rate not

 

less than 1-1/2 times the regular rate at which the employee is

 

employed. The employee's regular rate shall be not less than the

 

statutory minimum hourly rate.

 

     (b) For an employee to whom a work period of at least 7 but

 

less than 28 days applies, in the employee's work period the

 

employee receives for tours of duty, which in the aggregate exceed

 

a number of hours which bears the same ratio to the number of

 

consecutive days in the employee's work period as 216 bears to 28

 

days, compensation for those excess hours at a rate not less than

 

1-1/2 times the regular rate at which the employee is employed. The

 

employee's regular rate shall be not less than the statutory

 

minimum hourly rate.


     (c) If an employee engaged in fire protection activities would

 

receive overtime payments under this act solely as a result of that

 

employee's trading of time with another employee pursuant to a

 

voluntary trading time arrangement, overtime, if any, shall be paid

 

to employees who participate in the trading of time as if the time

 

trade had not occurred. As used in this subdivision, "trading time

 

arrangement" means a practice under which employees of a fire

 

department voluntarily substitute for one another to allow an

 

employee to attend to personal matters, if the practice is neither

 

for the convenience of the employer nor because of the employer's

 

operations.

 

     (3) This state or a political subdivision, agency, or

 

instrumentality of this state engaged in the operation of a

 

hospital or an establishment that is an institution primarily

 

engaged in the care of the sick, the aged, or the mentally ill or

 

developmentally disabled who reside on the premises does not

 

violate subsection (1) if both of the following conditions are met:

 

     (a) Pursuant to a written agreement or written employment

 

policy arrived at between the employer and the employee before

 

performance of the work, a work period of 14 consecutive days is

 

accepted instead of the workweek of 7 consecutive days for purposes

 

of overtime computation.

 

     (b) For the employee's employment in excess of 8 hours in a

 

workday and in excess of 80 hours in the 14-day period, the

 

employee receives compensation at a rate of 1-1/2 times the regular

 

rate, which shall be not less than the statutory minimum hourly

 

rate at which the employee is employed.


     (4) Subsections (1), (2), and (3) do not apply to any of the

 

following:

 

     (a) An employee employed in a bona fide executive,

 

administrative, or professional capacity, including an employee

 

employed in the capacity of academic administrative personnel or

 

teacher in an elementary or secondary school. However, an employee

 

of a retail or service establishment is not excluded from the

 

definition of employee employed in a bona fide executive or

 

administrative capacity because of the number of hours in the

 

employee's workweek that the employee devotes to activities not

 

directly or closely related to the performance of executive or

 

administrative activities, if less than 40% of the employee's hours

 

in the workweek are devoted to those activities.

 

     (b) An individual who holds a public elective office.

 

     (c) A political appointee of a person holding public elective

 

office or a political appointee of a public body, if the political

 

appointee described in this subdivision is not covered by a civil

 

service system.

 

     (d) An employee employed by an establishment that is an

 

amusement or recreational establishment, if the establishment does

 

not operate for more than 7 months in a calendar year.

 

     (e) An employee employed in agriculture, including farming in

 

all its branches, which among other things includes: cultivating

 

and tilling soil; dairying; producing, cultivating, growing, and

 

harvesting agricultural or horticultural commodities; raising

 

livestock, bees, fur-bearing animals, or poultry; and a practice,

 

including forestry or lumbering operations, performed by a farmer


or on a farm as an incident to or in conjunction with farming

 

operations, including preparation for market, delivery to storage,

 

or delivery to market or to a carrier for transportation to market

 

or processing or preserving perishable farm products.

 

     (f) An employee who is not subject to the minimum hourly wage

 

provisions of this act.

 

     (5) The director of the department of licensing and regulatory

 

affairs shall promulgate rules under the administrative procedures

 

act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to define the terms

 

used in subsection (4).

 

     (6) For purposes of administration and enforcement, an amount

 

owing to an employee that is withheld in violation of this section

 

is unpaid minimum wages under this act.

 

     (7) The legislature shall annually appropriate from the

 

general fund to each political subdivision affected by subsection

 

(2) an amount equal to the difference in direct labor costs before

 

and after the effective date of this act arising from any change in

 

existing law that results from the enactment of subsection (2) and

 

incurred by the political subdivision.

 

     (8) In lieu of monetary overtime compensation, an employee

 

subject to this act may receive compensatory time off at a rate

 

that is not less than 1-1/2 hours for each hour of employment for

 

which overtime compensation is required under this act, subject to

 

all of the following:

 

     (a) The employer must allow employees a total of at least 10

 

days of leave per year without loss of pay and must provide the

 

compensatory time to the employee under either of the following:


     (i) (i) Applicable provisions of a collective bargaining

 

agreement, memorandum of understanding, or any other written

 

agreement between the employer and representative of the employee.

 

     (ii) (ii) If employees are not represented by a collective

 

bargaining agent or other representative designated by the

 

employee, a plan adopted by the employer and provided in writing to

 

its employees that provides employees with a voluntary option to

 

receive compensatory time off for overtime work when there is an

 

express, voluntary written request to the employer by an individual

 

employee for compensatory time off in lieu of overtime pay before

 

the performance of any overtime assignment.

 

     (b) The employee has not earned compensatory time in excess of

 

the applicable limit prescribed by subdivision (d).

 

     (c) The employee is not required as a condition of employment

 

to accept or request compensatory time. An employer shall not

 

directly or indirectly intimidate, threaten, or coerce or attempt

 

to intimidate, threaten, or coerce an employee for the purpose of

 

interfering with the employee's rights under this section to

 

request or not request compensatory time off in lieu of payment of

 

overtime compensation for overtime hours, or requiring an employee

 

to use compensatory time. In assigning overtime hours, an employer

 

shall not discriminate among employees based upon an employee's

 

choice to request or not request compensatory time off in lieu of

 

overtime compensation. An employer who violates this subsection is

 

subject to a civil fine of not more than $1,000.00.

 

     (d) An employee may not accrue more than a total of 240 hours

 

of compensatory time. An employer shall do both of the following:


     (i) (i) Maintain in an employee's pay record a statement of

 

compensatory time earned by that employee in the pay period that

 

the pay record identifies.

 

     (ii) (ii) Provide an employee with a record of compensatory

 

time earned by or paid to the employee in a statement of earnings

 

for the period in which the compensatory time is earned or paid.

 

     (e) Upon the request of an employee who has earned

 

compensatory time, the employer shall, within 30 days following the

 

request, provide monetary compensation for that compensatory time

 

at a rate not less than the regular rate earned by the employee at

 

the time the employee performed the overtime work.

 

     (f) An employee who has earned compensatory time authorized

 

under this subsection shall, upon the voluntary or involuntary

 

termination of employment or upon expiration of this subsection, be

 

paid unused compensatory time at a rate of compensation not less

 

than the regular rate earned by the employee at the time the

 

employee performed the overtime work. A terminated employee's

 

receipt of or eligibility to receive monetary compensation for

 

earned compensatory time shall not be used by either of the

 

following:

 

     (i) (i) The employer to oppose an employee's application for

 

unemployment compensation under the Michigan employment security

 

act, 1936 (Ex Sess) PA 1, MCL 421.1 to 421.75.

 

     (ii) (ii) The state to deny unemployment compensation or

 

diminish an employee's entitlement to unemployment compensation

 

benefits under the Michigan employment security act, 1936 (Ex Sess)

 

1936 (Ex Sess) PA 1, MCL 421.1 to 421.75.


     (g) An employee shall be permitted to use any compensatory

 

time accrued under this subsection for any reason unless use of the

 

compensatory time for the period requested will unduly disrupt the

 

operations of the employer.

 

     (h) Unless prohibited by a collective bargaining agreement, an

 

employer may terminate a compensatory time plan upon not less than

 

60 days' notice to employees.

 

     (i) As used in this subsection:

 

     (i) (i) "Compensatory time" and "compensatory time off" mean

 

hours during which an employee is not working and for which the

 

employee is compensated in accordance with this subsection in lieu

 

of monetary overtime compensation.

 

     (ii) (ii) "Overtime assignment" means an assignment of hours

 

for which overtime compensation is required under this act.

 

     (iii) (iii) "Overtime compensation" means the compensation

 

required under this section.

 

     Sec. 4d. (1) The minimum hourly wage rate of an employee shall

 

be as is the rate established under subsection (2) if all of the

 

following occur:

 

     (a) The employee receives gratuities in the course of his or

 

her employment.

 

     (b) The If the gratuities described in subdivision (a) plus

 

the minimum hourly wage rate under this subsection do not equal or

 

exceed the difference between the minimum hourly wage rate

 

otherwise established under subsection (2) and the minimum hourly

 

wage established under section 4, the employer pays any shortfall

 

to the employee.


     (c) The gratuities are proven gratuities as indicated by the

 

employee's declaration for purposes of the federal insurance

 

contribution act, 26 USC 3101 to 3128.

 

     (d) The entirety of the gratuities are retained by the

 

employee who receives them, except as voluntarily shared with other

 

employees who are directly or indirectly part of the chain of

 

service and whose duties are not primarily managerial or

 

supervisory.

 

     (d) (e) The employee was informed by the employer of the

 

provisions of this section. in writing, at or before the time of

 

hire, and gave written consent.

 

     (2) For purposes of subsection (1), the minimum hourly wage

 

rate of an employee shall be 48% of the minimum hourly wage rate

 

established under section 4 effective January 1, 2019; beginning

 

January 1, 2020, it shall be 60% of the minimum hourly wage rate

 

established under section 4; beginning January 1, 2021, it shall be

 

70% of the minimum hourly wage rate established under section 4;

 

beginning January 1, 2022, it shall be 80% of the minimum hourly

 

wage rate established under section 4; beginning January 1, 2023,

 

it shall be 90% of the minimum hourly wage rate established under

 

section 4; and beginning January 1, 2024 and thereafter, it shall

 

be 100% of the minimum hourly wage rate established under section

 

4.is:

 

     (a) Beginning the effective date of the 2018 amendatory act

 

that amended this section, $3.52.

 

     (b) Beginning January 1, 2019, $3.56.

 

     (c) Beginning January 1, 2020, $3.60.


     (d) Beginning January 1, 2021, $3.64.

 

     (e) Beginning January 1, 2022, $3.68.

 

     (f) Beginning January 1, 2023, $3.72.

 

     (g) Beginning January 1, 2024, $3.76.

 

     (h) Beginning January 1, 2025, $3.80.

 

     (i) Beginning January 1, 2026, $3.84.

 

     (j) Beginning January 1, 2027, $3.88.

 

     (k) Beginning January 1, 2028, $3.92.

 

     (l) Beginning January 1, 2029, $3.96.

 

     (m) Beginning January 1, 2030, $4.00.

 

     (3) As used in this section, "gratuities" means tips or

 

voluntary monetary contributions received by an employee from a

 

guest, patron, or customer for services rendered to that guest,

 

patron, or customer and that the employee reports to the employer

 

for purposes of the federal insurance contributions act, 26 USC

 

3101 to 3128.

 

     (4) Gratuities will remain property of the employee who

 

receives them, except pursuant to a valid and voluntary tip sharing

 

agreement outlined in subsection (1)(d) above, regardless of

 

whether the employer pays the lower tipped hourly wage described in

 

subsection (2) or the full minimum hourly rate established under

 

section 4. Gratuities and service charges paid to an employee are

 

in addition to, and may not count towards, wages due to the

 

employee.

 

     (5) Employers must provide employees and consumers written

 

notice of their plan to distribute service charges.

 

     (6) Employer shall keep records showing compliance with


provisions of Section 4d for no less than 3 years from the date of

 

employee's last pay period.

 

     Sec. 10. (1) This act does not apply to an employer that is

 

subject to the minimum wage provisions of the fair labor standards

 

act of 1938, 29 USC 201 to 219, unless those federal minimum wage

 

provisions would result in a lower minimum hourly wage than

 

provided in this act. Each of the following exceptions applies to

 

an employer who is subject to this act only by application of this

 

subsection:

 

     (a) Section 4a does not apply.

 

     (b) This act does not apply to an employee who is exempt from

 

the minimum wage requirements of the fair labor standards act of

 

1938, 29 USC 201 to 219.

 

     (2) Notwithstanding subsection (1), an employee shall be paid

 

in accordance with the minimum wage and overtime compensation

 

requirements of sections 4 and 4a if the employee meets either of

 

the following conditions:

 

     (a) He or she is employed in domestic service employment to

 

provide companionship services as defined in 29 CFR 552.6 for

 

individuals who, because of age or infirmity, are unable to care

 

for themselves and is not a live-in domestic service employee as

 

described in 29 CFR 552.102.

 

     (b) He or she is employed to provide child care, but is not a

 

live-in domestic service employee as described in 29 CFR 552.102.

 

However, the requirements of sections 4 and 4a do not apply if the

 

employee meets all of the following conditions:

 

     (i) (i) He or she is under the age of 18.


     (ii) (ii) He or she provides services on a casual basis as

 

defined in 29 CFR 552.5.

 

     (iii) (iii) He or she provides services that do not regularly

 

exceed 20 hours per week, in the aggregate.

 

     (3) This act does not apply to persons employed in summer

 

camps for not more than 4 months or to employees who are covered

 

under section 14 of the fair labor standards act of 1938, 29 USC

 

214.

 

     (4) This act does not apply to agricultural fruit growers,

 

pickle growers and tomato growers, or other agricultural employers

 

who traditionally contract for harvesting on a piecework basis, as

 

to those employees used for harvesting, until the board has

 

acquired sufficient data to determine an adequate basis to

 

establish a scale of piecework and determines a scale equivalent to

 

the prevailing minimum wage for that employment. The piece rate

 

scale shall be equivalent to the minimum hourly wage in that, if

 

the payment by unit of production is applied to a worker of average

 

ability and diligence in harvesting a particular commodity, he or

 

she receives an amount not less than the hourly minimum wage.

 

     (5) This act does not apply to an individual who is 16 years

 

of age or older but less than 21 years of age in his or her

 

capacity as an ice hockey player for a junior ice hockey team that

 

is a member of a regional, national, or international junior ice

 

hockey league.

 

     (6) (5) Notwithstanding any other provision of this act,

 

subsection (1)(a) and (b) and subsection (2) do not deprive an

 

employee or any class of employees of any right that existed on


September 30, 2006 to receive overtime compensation or to be paid

 

the minimum wage.

 

     Sec. 15. (1) Except as provided in subsection (2), this This

 

act shall supersede any acts or parts of acts inconsistent with or

 

in conflict with this act, but only to the extent of such

 

inconsistency or conflict.

 

     (2) This act does not repeal, abrogate, amend, limit, modify,

 

supersede, or otherwise affect Act No. 166 of the Public Acts of

 

1965, as amended, being sections 408.551 to 408.558 of the Michigan

 

Compiled Laws, or any other prevailing wage law.

 

     (2) (3) Any reference in any law to 2014 Public Act 138, the

 

Workforce Opportunity Wage Act, or to the state minimum wage law

 

the workforce opportunity wage act, 2014 PA 138, MCL 408.411 to

 

408.424, shall be considered a reference to this act.