Week 3 of lame duck ended in a dumpster fire with dysfunction in Lansing. Last week’s walkout by House Republicans because of inaction on earned sick time, tipped wages and roads continued into this week keeping things at a standstill. This gridlock meant that some concerning bills died on the house floor.
- Rep. Karen Whitsett (D-Detroit) also would not reenter the House Chambers meaning a quorum could not be reached. On the final day, she stayed in Minority Leader Matt Hall’s office and a “Call of the House” was issued – meaning that all members would be required (or could be forced to) return to the House. This ultimately failed and the House adjourned without the spectacle of lawmakers dragged in by Michigan State Police.
- The Senate continued meeting, passing the 30-hour mark Friday as the Republicans (fed up with process and priorities) requested every bill be read in their entirety and made frequent comments for the record. Many bills passed on party lines and were not put through the standard committee process.
- While the failure to pass priority legislation on earned sick time and tipped wagesmakes this feel like a failure, we did see a number of dangerous pieces of legislation fail. Even the Wall Street Journal covered it.
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A handful of Democrats in the House were pivotal in standing up to pressure and engaging with businesses in their districts about the cumulative impact of the policies being pushed. Without their courage, it is likely that the results could have been much worse for Michigan’s business climate and small employers.
The top line items follow below – from bills that would have blown generational holes in the school aid budget to legislation that would end vibrant reuse of contaminated sites, there are a number of things to be thankful for.
What’s the Plan for ESTA and Tips
Unfortunately, despite bipartisan support, changes to the Earned Sick Time Act are not happening this year.
Negotiations on a fix for roads and these items never materialized between the House, Senate and Governor. The Michigan Senate was the primary obstacle to addressing these looming threats.
Addressing ESTA and tipped wages remains the top priority for our team.
We are working with the incoming Republican House Majority and expect them to pass compromise legislation with bipartisan support in mid-January. It will then be important that the Senate understands the urgent need to make these work for small businesses.
The timeline is tight, and we know many are preparing as if ESTA will be enacted February 21. We will continue to be a resource for you and will host an implementation workshop on January 10. You can also see LEO’s FAQ document here.
- ESTA Compliance and Implementation Workshop – January 10.
Please contact Jacqui Dolce if you would like to discuss further! We appreciate how many businesses were engaged this year and hope you will subscribe to our bi-weekly newsletter if you are not already!
On to the Governor’s Desk:
- Major Increase in Unemployment Benefits (SB 40) – A significant increase in unemployment benefits passed on a near party-line vote. Benefits will be extended to 26 weeks and increased to $614/week from the current $362. Unemployment is 100% employer funded, and this creates a significant tax increase for businesses as the trust fund is spent down.
- Public Employer Healthcare Mandate (HB 6058) – Requires public employers to cover a minimum of 80% (currently the max is 80%) of employees’ healthcare benefits, raising the minimum contribution and driving up costs for local governments, schools, and other public entities.
Top Lame Duck Successes (items that had movement but fell short):
- Blocked: Worker’s Compensation Rewrite (SBs 1079 & 1080) – Proposed changes would have greatly expanded definitions of disability and claims, removed distinctions between levels of disability, applied retroactively to claims since 1985 and created significant cost increases on premiums.
- Blocked: Michigan Family Leave Optimal Coverage Act (SBs 332 & 333) – The proposed ~$1-$1.5 billion MIFLOC program would have required 15 weeks (amended to 12) of leave annually and added new complexity for small businesses. There would be a new unknown payroll tax on employers and employees to fund the program. The bill would create an extensive new bureaucratic process and create one of the most expansive programs in the country.
- Blocked: Stormwater Utilities (SB 660) – For yet another term, allowing local governments to create new stormwater utilities was washed away. This new “rain tax” would have been allowed with only a public hearing and would be assessed on property permeability. We continue to push to require a vote of the public to ensure oversight.
- Blocked: Local Wage Mandates (SB 1173) – This bill would have allowed all local governments to mandate wages, benefits, working hours and more on contractors, subcontractors and certain employers.
- Blocked: Reopening of School Pensions (HB 6060) – Allowing new employees to select defined benefit retirement options would have cost the state an estimated ~$17B over 30 years and been a disastrous burden on the school aid fund and future state budgets.
- Blocked: So-called “Polluter Pay” bills (SBs 605-607) – Would have made it infeasible to revitalize blighted properties despite existing laws that already hold polluters accountable.
- Blocked: Bottle Deposit Expansion (SBs 1112-1113) – Would have extended the 10-cent deposit to nearly all beverages and required retailers to accept any bottle for redemption, regardless of brand or origin, significantly increasing the burden on businesses without clear evidence of improving recycling rates.
- Blocked: MI Consumer Protection Act (SBs 1021 & 1022) – Would have removed an exemption that protects a business/individual performing specific licensed/regulated services. This would have opened up nearly every regulated industry and profession to lawsuits (including class action lawsuits).
- Blocked: Repeal of “Dark Stores” (HBs 5865-5868) – Would have prohibited tax assessors from using vacant stores as comparable for operating stores, driving up property taxes for retailers and other businesses.
- Blocked: Medical Malpractice Expansion (HBs 6085-6086) – Would have significantly raised the caps on non-economic damages in medical malpractice cases driving up costs for healthcare providers.
- Blocked: Limitations on Non-Compete Agreements (HB 4399) – Would have prohibited employers from requiring employees to enter into a non-compete agreement in most cases.
- Blocked: Limitations on Independent Contractors (HB 4390) – In “worst in the nation” this bill fashion would have functionally ended the ability for most businesses to use independent contractors and those who like the flexibility from doing so.
- Blocked: “Price Gouging” (HBs 5895-5897) – Would have prevented businesses from increasing the price of goods (including hotels and energy) by more than 15% during a state of emergency, without proper justification for each individual increase, creating an administrative and judicial nightmare for all businesses.
- Blocked: Prevailing Wages for Broadband Projects (HB 6051) – Would have extended prevailing wage mandates to include broadband service projects (including private projects).
- Blocked: Personal Data Privacy (SB 659) – Would have required collectors and processors of personal data to obtain additional consent and make them legally liable for breaches.
- Blocked: Restriction of Overtime for Nurses (HB 5999) – Would have prevented hospitals from requiring registered nurses from working overtime and beyond their regularly scheduled hours, with exceptions such as a state of emergency.
- Blocked: Teacher Pension (HB 6060) – Would have allowed public school employees and certain state employees to join a defined benefit pension plan as opposed to a defined contribution plan placing a long-term burden on taxpayers, reducing budget flexibility for schools, and risking underfunding the system.
*Please excuse any errors or omissions in case the Clerk wasn’t caught up or we ‘somehow’ missed something during ~30 straight hours of Senate Session
