Bill Text: MI SB1171 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Labor; hours and wages; minimum wage for tipped employees; modify. Amends secs. 3, 4, 4a, 4d, 10 & 15 of 2018 PA 337 (MCL 408.933 et seq.).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-19 - Assigned Pa 368'18 [SB1171 Detail]
Download: Michigan-2017-SB1171-Engrossed.html
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.
