Michigan Democrats, business groups at odds as family leave plan advances

LANSING, Mich. — Michigan Senate Democrats on Tuesday advanced a bill that had been stalled for longer than a year to create a statewide family and medical paid leave policy that would be funded by contributions from workers and their employers.

The Senate Housing and Human Services Committee voted 8-3, with Democrats in support and Republicans in opposition, to send the measure to the full Senate. It wasn't clear Tuesday whether or when the Senate would take up the bill.

The vote came with only six session days remaining in the 2023-2024 legislative term and as groups that advocate in Lansing on behalf of businesses have been voicing increasing frustration with the decisions of Democratic leaders.

The family leave proposal, if enacted, would eventually allow for up to 12 weeks of paid leave time in a year that could be used for the birth of a child, for a serious health condition, for bereavement or for caring for a family member with a serious health condition.

The maximum weekly benefit payable to a person would be two-thirds of the state average weekly wage, according to the bill. The average weekly wage is currently about $1,362, according to state data.

The funding would generally come through contributions from businesses — responsible for 50% of the price tag — and their employees — responsible for the other 50%. However, businesses with fewer than 25 workers would only have to provide the 50% from their employees, according to the bill, sponsored by Sen. Erika Geiss, D-Taylor.

A financial analysis of the bill from the nonpartisan Senate Fiscal Agency wasn't publicly available before the committee vote Tuesday. But Michigan's Department of Labor and Economic Opportunity would have the power to determine what the contribution rates would be.

Democratic Gov. Gretchen Whitmer called for a similar program in August 2023, but no proposal had gained traction in the Democratic-led Legislature until this month, weeks before Republicans will take control of the state House in January.

The nonprofit Michigan League for Public Policy supported the family leave measure and contended in a statement that the majority of state residents "don’t have the support they need to take time away from work for critical caregiving needs."

"This means they are at risk of losing their jobs or wages when they need extended leave to take care of a new child or a loved one, or when they need to recover from their own personal injury or major illness," said Monique Stanton, president and CEO of the Michigan League for Public Policy.

But some groups that lobby on behalf of businesses in Michigan criticized the bill on Tuesday.

They've also blasted a separate proposal to increase unemployment insurance benefits and the Democratic-controlled Legislature's inaction, so far, to intervene in a July court ruling that will eventually increase the minimum wage for all workers, including those who receive tips, to about $15 an hour.

The court found in 2018, the Legislature, which was controlled by Republicans at the time, acted inappropriately when it approved two petition-backed initiatives before Election Day, so they wouldn't go on the ballot, and returned later in the year to significantly weaken the policies.

In addition to increasing the minimum wage, the court decision put in place a standard that generally requires businesses to provide earned sick time to each of their employees at the rate of one hour of paid sick time for every 30 hours worked. Employees could use the sick time for mental or physical illness, medical care or for meetings at their child’s school about the child’s health.

Geiss described the family leave bill and the earned sick leave standard as two different matters. The family leave bill would primarily be focused on longer-term reasons for not being able to work, like a pregnancy or a cancer diagnosis, Geiss said.

Put together, lobbyists for business organizations said the new sets of requirements would be even more problematic.

"It's creating a business environment in Michigan that is not competitive with other states," said David Worthams, director of employment policy for the Michigan Manufacturers Association.

Likewise, Amanda Fisher, state director for the National Federation of Independent Business, used the words "death knell" to describe the impact of the policies.

The organization Save MI Tips has encouraged lawmakers to intervene and prevent the state from going forward with the court ruling that does away with the separate tipped minimum wage for workers who receive tips. That tipped minimum wage is currently $3.93 an hour.

Hundreds of Save MI Tips supporters demonstrated inside the Michigan Capitol on Tuesday, chanting "save my tips" outside the Senate chamber.

Keyonna Caston of Auburn Hills, a restaurant worker employed by Red Robin, said her tips help her pay her mortgage.

"This is our livelihood," Caston said of her message to lawmakers.

However, Geiss said she wanted to see the sick-leave and minimum wage policies remain as they were originally brought to the Legislature in 2018 before Republican lawmakers altered them.

Sen. Jeff Irwin, D-Ann Arbor, pushed back on arguments from the business advocacy groups, saying they had frequently claimed any added regulation would lead to shutdowns.

"The fact of the matter is other states have done this well and successfully, and I think Michigan can too," Irwin said.

According to the Michigan League for Public Policy, 13 other states have already implemented paid family and medical leave programs.

The family leave bill would provide a "backstop" for people who need to take time off because they have a horribly sick child or family member, Irwin said.

In the Michigan House, lawmakers voted 58-51 along party lines Tuesday to push a bill expanding the state’s unemployment law out of the Legislature and on to Whitmer's desk.

The bill, which passed out of the Senate last week, would expand the maximum number of weeks per year that workers could receive an unemployment check from 20 to 26 weeks and expand the weekly benefit cap from $362 to $614.

Rep. William Bruck, R-Erie, argued the bill would be detrimental to small businesses, who will have to help bear the added cost. He also argued the unemployment program was never meant to be a complete replacement of an individual’s wages.

“It’s not meant to be a living wage,” Bruck said.

But state Rep. Jim Haadsma, D-Battle Creek, described unemployment as a lifeline and the changes adopted Tuesday were an effort to keep up with inflation and sustain that lifeline.

“They are a lifeline for people who find themselves out of a job through no fault of their own to get back on their feet,” Haadsma said.

________