Michigan Legislature Passes New Employee-Friendly Laws

In Michigan politics, it is clear that there has been a change of the guard. In November 2022, Democrats took control of both of Michigan’s legislative bodies for the first time in almost 40 years. They have now passed several new employee-friendly laws, including expanding workplace protections, repealing the right-to-work law, and restoring the prevailing wage for publically funded construction projects. This alert summarizes the new laws as well as certain potential changes on the horizon.

New LGBTQ+ Workplace Protections

On March 16, 2023, Governor Gretchen Whitmer signed legislation that amended the Elliott-Larsen Civil Rights Act (“ELCRA”). This new law prohibits discrimination based on sexual orientation, gender identity, and gender expression in the workplace. In 2020, the U.S. Supreme Court held that Title VII of the Civil Rights Act of 1964’s (“Title VII”) prohibition against sex discrimination includes discrimination on the basis of sexual orientation and transgender status. Accordingly, these protections have been in effect for a large number of employees for some time. A key distinction between Title VII and the ELCRA is that Title VII applies to employers with 15 or more employees, whereas the ELCRA applies to employers with one or more employees. Therefore, small businesses in Michigan with less than 15 employees are now prohibited from discriminating on these bases. Employers should consider whether changes to their internal policies and employee handbooks will need to be made.  Employers may want to consider whether their management teams will need training on the topic as well.

Repeal of the Right-to-Work Law

On March 24, 2023, Governor Whitmer signed legislation repealing Michigan’s right-to-work law, which prohibited union security agreements. Union security agreements require employees to pay union dues or service fees as a condition of obtaining or continuing employment in unionized workplaces. With these agreements legal again, all employees in unionized workforces could now be forced to pay union dues. Many collective bargaining agreements contain provisions stating that should a right-to-work law be repealed, the union security agreement provision in the collective bargaining agreement (“CBA”) automatically goes into effect. Employers with unionized workforces will need to review their CBAs to ensure they are deducting dues, if necessary, under the CBA once the repeal becomes effective in March 2024.

Restoration of Prevailing Wage

The Governor also signed legislation restoring prevailing wages for state construction projects. The law will require contractors hired for state projects to pay union-level wages to those who work on publically funded projects. Employers in the construction industry will need to pay close attention as this development unfolds, as this law becomes effective in March 2024.

Other Potential Changes to Michigan Workplace Laws

Other big changes could be in store for Michigan employers as well. The following bills have been introduced in the Michigan Legislature, many of them following national trends:

• SB 142 would amend the Bullard-Plawecki Act to require pay transparency to applicants and current employees. The law would mandate that employers provide a job description to applicants for the position they are considering and to current employees for the positions that they currently hold. The law would require that those job descriptions include salary information and a pay scale, if one exists for the position. This law is similar to pay transparency laws we reported on here. Other jurisdictions with similar laws include California, Colorado, Illinois, Maryland, Nevada, and New York.
• SB 143 would drastically change Michigan’s Antitrust Reform Act. This bill would prohibit employers from entering into noncompete agreements with “low-wage employees,” which includes employees making less than $15.00 per hour, 150% of the minimum hourly wage, or $31,200.00 per year annually, whichever is more. This bill is similar to the laws that have been passed in Maryland, New Hampshire, Rhode Island, and Virginia.  Colorado, Illinois, Oregon, Washington, and Washington, D.C. have similarly instated dollar-amount thresholds for obtaining noncompete agreements, though the thresholds in those jurisdictions are significantly higher.
• HB 4035 would mandate predictive scheduling requirements for certain employers, including those in the retail, hospitality, and food services industries. The bill would require employers to provide new employees with a written good faith estimate of the employee’s work schedule at the time of hire and to give 14 days’ advance notice of work schedules. The bill would allow employees to decline employer-prompted changes and require time-and-a-half pay when schedule changes are initiated by the employer. This bill is similar to laws established in many large cities including Los Angeles, California; San Francisco, California; Chicago, Illinois; New York City, New York; Philadelphia, Pennsylvania; and Seattle, Washington.  To date, Oregon is the only state that has mandated predicted scheduling statewide.
• HB 4240 is a credit history ban law that would prohibit employers from making hiring decisions based on an applicant’s credit history. If passed, Michigan would join California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, and Washington, D.C. as well as many large municipalities in banning the use of credit history in the hiring process.

We will continue to report on these developments as they unfold. If your business needs help reviewing your policies, employee handbooks, or collective bargaining agreements in preparation for the upcoming changes, please contact one of Honigman’s Labor and Employment attorneys.