On June 22, 2015, Michigan’s Governor signed HB4052. This new law is known as the “Local Government Labor Regulatory Limitations Act,” and creates state preemption over local ordinances. The law became effective immediately upon receiving the Governor’s signature.
The law prohibits local governmental bodies from adopting, passing, or otherwise administering any regulation or ordinance which has one of the following effects or purposes:
- Regulating information an employer or potential employer must request, require, or exclude on an application for employment. However, local governments may still require criminal background checks for those receiving a license or permit from a local government entity.
- Requiring employers to pay higher than the state minimum hourly wage, or, if applicable, the minimum wage of the FLSA unless those provisions would result in a lower minimum wage than provided under state law.
- Requiring employers to provide any form of fringe benefits.
- Requiring employers to pay a wage or fringe benefit based on wage or fringe benefit rates prevailing in the locality.
- Regulating work stoppage or strike activity.
- Requiring paid or unpaid leave time.
- Regulating hours and scheduling that an employer is required to provide.
- Requiring participation in any educational apprenticeship program not required by state or federal law.
- Creating administrative or judicial remedies for wage, hour, or benefit disputes.
The law does not affect any local policies which prohibit employment discrimination. The act also does not prohibit enforcement of any written agreement voluntarily entered into and in effect prior to October 1, 2015.
Michigan’s new law seems to be directed, at least in part, toward addressing an emerging national trend whereby various cities have implemented laws and ordinances relating to employment. Prevalent among these municipal laws and ordinances are paid sick leave and local minimum wage rules. In New Jersey, for example, at least nine cities have passed sick leave ordinances. While each of the local sick leave ordinances is similar, they are not identical. This lack of uniformity can cause confusion among employers, might result in additional costs for employers to ensure compliance with the nuances of each of the different ordinances, and can give rise to greater exposure to liability because of the increased likelihood for errors.
Pennsylvania is considering similar preemption legislation. On February 12, 2015, the City of Philadelphia passed a paid sick leave ordinance. Later that same day, state Senator John Eichelberger introduced Pennsylvania Senate Bill 333, a bill designed to invoke a law forbidding Pennsylvania municipalities from passing ordinances requiring employers to provide employees with vacation, sick time or any other form of leave beyond what is already required under state and federal laws.
The recent legislation and ordinances passed or introduced in Michigan, Pennsylvania and New Jersey demonstrate the emergence of two divergent trends across the country. The “piecemeal” approach, as seen in New Jersey’s multiple local paid sick leave ordinances might address the needs of employees in specific localities, yet such sporadic legislation presents difficult challenges and increased costs for employers who operate businesses across that State. The “preemption” approach seen in Michigan, and (possibly coming soon in Pennsylvania) obviously would create a more uniform approach to enacting employment-related laws such as paid sick leave statutes, however, opponents of this approach argue that it ignores the specific needs of workers in various communities, or that state legislatures who take this approach will use the preemption statute to ensure that legislation affecting employment is avoided altogether.
Scott M. Plamondon, Attorney at Law | Weintraub Tobin