10 Oct MICHIGAN’S NEW PAID MEDICAL LEAVE ACT

By:  David Bryce

On December 14, 2018, Governor Snyder signed into law the Paid Medical Leave Act (the “Leave Act”).  The Leave Act requires employers with 50 or more employers to provide paid medical leave to certain employees.  It is the culmination of the Legislature’s efforts to minimize the negative impact of a ballot initiative that would have been placed on the November 2018 ballot but for the intervening legislation. 

March 29, 2019 is the effective date for the Leave Act.  With the effective date rapidly approaching, labor and employment lawyers should become acquainted with how the Leave Act may impact their clients’ businesses.

Who the Leave Act Covers

The Leave Act applies to employers with 50 or more employees (“Covered Employers”).  For purposes of determining whether an employer has 50 or more employees, both full-time and part-time employees are counted.  

Employers with 50 or more employees must provide paid medical leave to “eligible employees.”  The Leave Act defines “eligible employees” as those for whom an employer is required to withhold federal income tax – which, of course, is virtually every employee.  There are, however, several significant exceptions, most notably: 

• Employees exempt from overtime under the Fair Labor Standards Act; 

• Private sector employees covered by a union collective bargaining agreement; 

• Employees working less than 25 weeks in a calendar year; and 

• Employees working less than 25 hours per week on average in the preceding calendar year.

Employers should note that even though they are not eligible for paid medical leave, employees in excepted categories listed above nevertheless count toward whether an employer has 50 or more employees.  

The Leave Act’s Requirements Regarding Accrual of Paid Leave 

Eligible Employees must accrue paid medical leave at a rate of at least 1 hour for every 35 hours worked.  Covered Employers, however, can limit accrual of paid medical leave for eligible employees to no more than 1 hour per calendar week.  Covered Employers can also limit both accrual and use of paid leave to no more than 40 hours in a consecutive 12-month period (“benefit year”).  In addition, Covered Employers can limit carry over to no more than 40 hours of unused accrued paid leave from one benefit year to the next.

As an alternative to the accrual method described above, the Leave Act provides that a Covered Employer “may provide at least 40 hours of paid medical leave to an eligible employee at the beginning of a benefit year.”  If a Covered Employer elects to “frontload” paid medical leave in this manner, there is no requirement that it allow any hours to carry over from one benefit year to the next. 

Covered Employers who already provide paid leave benefits of at least 40 hours per benefit year are presumed to be in compliance with the Leave Act.  The presumption of compliance applies in cases where the already existing 40 hours of paid leave includes any combination of paid vacation, personal days, and paid time off.  

Under the Act, leave for eligible employees begins to accrue on either the effective date (March 29, 2019) or the date of hire, whichever is later.  Employers, however, may require that new employees wait 90 days before being able to use any accrued leave under the Act.  

The Leave Act’s Requirements Regarding Use of Paid Leave

The Leave Act provides that a Covered Employer must allow an eligible employee to use accrued paid medical leave for any of the following: (1) the eligible employee’s own physical or mental injury or illness; (2) the physical or mental injury or illness of an eligible employee’s family member; (3) the eligible employee’s or his or her family member’s need for medical care, counseling, relocation, or legal services relating to domestic violence or sexual assault; and (4) the “closure of the eligible employee’s primary workplace by order of a public official due to a public health emergency,” or the eligible employers need to care for a child whose “school or place of care has been closed by order of a public official due to a public health emergency.”  The Leave Act’s definition of “family member” does not include an eligible employee’s domestic partner or his or her children or parents.

The Leave Act provides that employees may use paid leave in one-hour increments, “unless the employer has a different increment policy . . . in writing in an employee handbook or other employee benefits document.” 

Covered Employers are required to pay eligible employees using paid leave at a level at least equal to their normal hourly wage or base wage, and are not required to pay overtime, bonuses, tips, or commissions when an eligible employee uses paid medical leave.

The Leave Act provides that employers may continue to use their usual notice and documentation requirements with respect to an eligible employee’s request to use accrued paid medical leave.  An employer, however, must provide an employee with at least 3 days to provide any medical documentation.  

Enforcement

The Leave Act provides employees with the right to file complaints with the Department of Licensing and Regulatory Affairs (the “Department”) within six-months of an alleged violation.  If the Department finds a violation occurred, it can award payment to an employee of any wrongfully withheld paid medical leave and can assess up to a $1,000 administrative fine against an employer. 

Covered Employers are required to display a poster at their place of business, in a conspicuous place accessible to employees, that includes the following information: (1) the amount of paid medical leave required to be provided to an eligible employee; (2) the terms under which the leave may be used; and (3) the eligible employee’s right to file a complaint with the Department for any violation of the Leave Act.  The Department will make posters available to Covered

Employers.

Actions for Counsel

With the Leave Act taking effect on March 29, 2019, lawyers advising businesses with 50 or more employees should take steps to familiarize themselves with the Act so that they can be prepared to advise clients on how to comply with it. Masud Labor Law Group is available to provide assistance in addressing any issues that may arise with respect to the Leave Act.