Supreme Court order complicates conversation as paid family leave bills move to Senate floor

BY KYLE DAVIDSON AND ANNA LIZ NICHOLS, MICHIGAN ADVANCE

MICHIGAN—Members of the Senate Housing and Human Services Committee on Thursday voted to advance policy creating a state-level paid family leave program, amid frustrations with a separate paid sick leave policy put in place through a decision by the state Supreme Court.

Sen. Erika Geiss (D-Taylor) offered testimony on her Senate Bill 332 and Senate Bill 333, which in their current form would allow employees to take up to 12 weeks of paid leave for circumstances including maternity leave, paternity leave, caring for oneself or a family member facing a long term illness and caring for oneself or a family member who has faced sexual assault, domestic violence, or other types of interpersonal or community violence.

House Republicans, who will reclaim the majority control of the chamber in January, have lambasted Democrats’ plans for a Family Leave Optimal Coverage Act, or FLOC, which would be funded through payroll contributions from employers and employees, with employers permitted to deduct up to 50% of the required contribution from their employee’s wages, with the employer contributing the remainder. However, Geiss noted in her testimony that businesses with fewer than 25 employees would be exempt from contribution requirements, though their employees could still contribute and access the program.

Additionally, unions with collectively bargained family and medical leave would not be required to participate in the state program, but could opt in at their next set of negotiations, Geiss said. Employers whose paid family leave and medical leave is equal or better than that established by the state would also be exempt from participation.

Geiss told lawmakers that she started writing her testimony for the meeting at one of her daughter’s weekly blood transfusions.

“I know deeply how pivotal making FLOC law will be for so many Michiganders,” Geiss told lawmakers. “You all probably know many folks in similar circumstances, folks who won’t tell you about the struggle to keep the lights and heat on, food on the table, gas in the car, their phones working and the roof over their heads while they care for themselves or their critically ill children or aging parents, while also worrying about losing or needing to leave their jobs. This is for whom we fight and act.”

The role of caregiver for sick children or aging parents often falls on women, mothers who have to pause or even end their careers to take care of the people they love the most, Christina Hayes of Mothering Justice told the committee.

Hayes said FLOC would allow individuals who would otherwise likely have to seek out more costly social programs to the state to be given the economic opportunity to take care of themselves and loved ones and then return to the state’s workforce. Families would benefit, workers would be retained and overall FLOC would foster a more loyal and productive workforce.

While covered individuals must be paid benefits equal to their average weekly wage, the bill sets the maximum for benefits at two-thirds of the state average weekly wage, with the state average across all industries coming in at $1,362.

Over the Summer, a Michigan Supreme Court decision determined that lawmakers had subverted the rights of citizens when the 2018 legislature—held by Republicans—adopted and amended laws outlined in two ballot initiatives, effectively gutting them. Under the Supreme Court’s order, both policies are set to take effect on Feb. 21, 2025, with the Earned Sick Time Act requiring businesses with fewer than 10 employees to offer up to 40 hours of paid sick leave and 32 hours of unpaid leave, while employers with 10 or more employees must offer a full 72 hours of paid sick leave.

When asked how the two policies related to one another, Geiss emphasized they were entirely separate issues, with the Earned Sick Time Act targeted at short-term concerns such as recovering from a cold or caring for a sick child, while her legislation centers on more long-term issues such as a cancer diagnosis.

Geiss’s proposals received supportive testimony from organizations including Mothering Justice, Better Balance, the Michigan League for Public Policy and the American Heart Association.

Additionally Luke Shaefer, faculty director for Poverty Solutions at the University of Michigan pointed to a recent study examining the impacts of paid family medical leave policies in other states who have passed similar laws while testifying on the bills.

“That evidence leads us to conclude that paid parental leave, caregiving leave and medical leave have demonstrated positive economic impacts and positive health impacts for employees and their families,” Shaefer said.

“Studies find that paid parental leaves can support better postpartum recovery for moms, which is not only beneficial to their well being, but also contributes to longer run, improved family financial health. These policies also support a healthy start in life for babies, and thus are an important investment in the next generation,” Shaefer said.

In a statement released after the bills passed through committee, Monique Stanton president and CEO of the Michigan League for Public Policy, said the league’s estimates based on an actuarial analysis of the program would put the cost of a 12-week paid leave program at $3.25 a week for workers making the state’s median wage and $1.48 for workers making minimum wage. 

“Under that same plan, small businesses would pay approximately $9,000 annually if they had 50 employees and the average salary of all employees was $50,000. For that low cost, working Michiganders will have the security they need to take time away from work for critical caregiving needs while still being able to pay their bills,” Stanton said.

However, Republican members of the committee retained concerns about how the program, with some raising questions on how this policy, paired with the state’s pending sick leave policy, would impact businesses.

Amanda Fisher, state director for the National Federation of Independent Business told the committee that 96% of its membership opposed proposals which required Michigan employers to give employees a guaranteed number of days off on annual paid sick leave.

“Right now, small businesses are struggling to find workers and if you only have two or three employees, and one employee is out for a significant amount of time, that puts those small, very small employers in a very challenging position,” Fisher said.

Additionally, NFIB’s member businesses were concerned how a state paid family leave program would interact with the earned sick time provisions taking effect in February, Fisher said.

She also argued the legislation would place an additional regulatory burden on businesses and potentially open them up to frequent litigation by allowing employees to take civil action over violations of the law.

“The bill allows, not just for fines from the [Department of Labor and Economic Opportunity] if a small business makes an error, but also a private right of action and that that can be a real issue, especially if somebody brings a frivolous lawsuit,” Fisher said. “Even if the small business owner wins the lawsuit, they have spent a lot of time and resources with that.”

Additionally, Wendy Block, senior vice president of business advocacy for the Michigan Chamber of Commerce said Geiss’s proposal, layered on top of the Earned Sick Time Act, would give employees between 14 to 17 weeks of paid time off, before raising additional concerns about the cost of the proposal and whether employers will need to pass those costs along to customers, or cut other benefits to afford their required contributions.

Members of the committee voted 8-3 along party lines to refer the bills back to the Senate floor for further consideration, where they’ll have to beat out a barrage of other legislative efforts in a short amount of time before bills that have not cleared both chambers expire when the new session begins next year.

READ MORE: Paid family leave advocates urge Michigan lawmakers to take up legislation

This coverage was republished from Michigan Advance pursuant to a Creative Commons license.