The state Legislature passed a paid sick leave initiative into law in September after supporters collected enough signatures to put their mandate on the ballot. As the law stands, it is an expensive and ineffective law that deserves to be repealed.
Yes, expensive. A requirement that all employees in firms with over 10 employees get up to nine days of paid sick leave and employees in firms under 10 employees get five days of paid sick leave will cost companies $7.1 billion, based on workplace characteristics and average wage rates. Since the majority of employees in Michigan already receive some paid sick leave benefits, there will be a minimum of $2.3 billion of extra benefit costs imposed on employers.
To put that in context, this leave mandate will cost business more than the state’s entire corporate income tax.
While some employers are going to bear the extra costs, others are will pass them along to employees. New mandates for benefits means lower wages or loss of a job for some in Michigan.
It will also cause conflicts between employees and managers. Say that an employee is a “no-call no-show.” If a manager calls to see if the employee is coming in, the employee can interpret that as a threat and file a complaint with the relevant authorities. The employee who makes a second complaint can obtain a “rebuttable presumption of a violation,” from the courts. An employer who cannot rebut that presumption is subject to legal costs, double damages, and a fine of up to $1,000.
The only thing an employer can do to verify that an employee is using sick leave for valid purposes is to ask for a physician’s note after the worker misses more than three days in a row.
The setup shows that supporters were sympathetic to workers with harsh managers. But it is overly contentious and gets in the way of employees and employers who have agreed to paid leave practices that work for both parties.
Some lawmakers may feel like they shouldn’t repeal a law after supporters collected enough residents’ signatures. But they have done so with other initiated legislation in the past. After enough people signed petitions to eliminate the complex and burdensome Single Business Tax, legislators got rid of it and then created the complex and more burdensome Michigan Business Tax.
The topic of when legislators would have the authority to change or repeal initiated legislation was discussed at the 1961 state constitutional convention. One delegate remarked, “If the Legislature sees fit to adopt the petition of the initiative as being sent out, if the Legislature in their wisdom feel it looks like it is going to be good, and they adopt it in toto, then they have full control. They can amend it and do anything they see fit. But if they do not, and you start an initiative petition and it goes through and is adopted by the people without the Legislature doing it, then they are precluded from disturbing it.”
Delegates eventually loosened the rules to give legislators the power to amend initiated laws that were approved by voters, but only with the support of three-fourths of both chambers. This steep requirement gives legislators a strong incentive to pass initiatives that collect enough signatures to go on the ballot.
The initiative process put Michigan in a strange situation where this large, intrusive and expensive mandate became law without much public debate. So let’s talk about it now. It deserves to be repealed. And the Legislature has the authority to repeal it.
James M. Hohman is director of fiscal policy at the Mackinac Center for Public Policy.