SB-0934, As Passed Senate, May 27, 2014
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 934
A bill to fix minimum wages for employees within this state;
to prohibit wage discrimination; to provide for a wage deviation
board; to provide for the administration and enforcement of this
act; to prescribe penalties for the violation of this act; and to
repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"workforce opportunity wage act".
Sec. 2. As used in this act:
(a) "Commissioner" means the director of the department of
licensing and regulatory affairs.
(b) "Employ" means to engage, suffer, or permit to work.
(c) "Employee" means an individual not less than 16 years of
age employed by an employer on the premises of the employer or at a
fixed site designated by the employer, and includes a minor
employed subject to section 15(1) of the youth employment standards
act, 1978 PA 90, MCL 409.115.
(d) "Employer" means a person, firm, or corporation, including
the state and its political subdivisions, agencies, and
instrumentalities, and a person acting in the interest of the
employer, who employs 2 or more employees at any 1 time within a
calendar year. An employer is subject to this act during the
remainder of that calendar year.
Sec. 3. An employer shall not pay any employee at a rate that
is less than prescribed in this act.
Sec. 4. (1) Subject to the exceptions specified in this act,
the minimum hourly wage rate is:
(a) Before September 1, 2014, $7.40.
(b) Beginning September 1, 2014, $8.15.
(c) Beginning January 1, 2016, $8.50.
(d) Beginning January 1, 2017, $8.90.
(e) Beginning January 1, 2018, $9.25.
(2) Every January beginning in January 2019, the state
treasurer shall adjust the minimum wage by an amount determined by
the state treasurer at the end of the preceding calendar year to
reflect the average annual percentage change in the consumer price
index for the most recent 5-year period for which data are
available. As used in this subsection, "consumer price index" means
the most comprehensive index of consumer prices available for the
midwest region from the bureau of labor statistics of the United
States department of labor. The wage and hours division of the
department of licensing and regulatory affairs shall post the
adjusted minimum wage on its website by February 1 of the year it
is calculated, and the adjusted rate is effective beginning April 1
of that year. An annual increase under this subsection shall not
exceed 3.5%.
(3) An increase in the minimum hourly wage rate as prescribed
in subsection (2) does not take effect if the unemployment rate
determined by the bureau of labor statistics, United States
department of labor, for this state is 8.5% or greater for the year
preceding the year of the prescribed increase.
Sec. 4a. (1) Except as otherwise provided in this act, an
employee shall receive compensation at not less than 1-1/2 times
the regular rate at which the employee is employed for employment
in a workweek in excess of 40 hours.
(2) This state or a political subdivision, agency, or
instrumentality of this state does not violate subsection (1) with
respect to the employment of an employee in fire protection
activities or an employee in law enforcement activities, including
security personnel in correctional institutions, if any of the
following apply:
(a) In a work period of 28 consecutive days, the employee
receives for tours of duty, which in the aggregate exceed 216
hours, compensation for those hours in excess of 216 at a rate not
less than 1-1/2 times the regular rate at which the employee is
employed. The employee's regular rate shall be not less than the
statutory minimum hourly rate.
(b) For an employee to whom a work period of at least 7 but
less than 28 days applies, in the employee's work period the
employee receives for tours of duty, which in the aggregate exceed
a number of hours which bears the same ratio to the number of
consecutive days in the employee's work period as 216 bears to 28
days, compensation for those excess hours at a rate not less than
1-1/2 times the regular rate at which the employee is employed. The
employee's regular rate shall be not less than the statutory
minimum hourly rate.
(c) If an employee engaged in fire protection activities would
receive overtime payments under this act solely as a result of that
employee's trading of time with another employee pursuant to a
voluntary trading time arrangement, overtime, if any, shall be paid
to employees who participate in the trading of time as if the time
trade had not occurred. As used in this subdivision, "trading time
arrangement" means a practice under which employees of a fire
department voluntarily substitute for one another to allow an
employee to attend to personal matters, if the practice is neither
for the convenience of the employer nor because of the employer's
operations.
(3) This state or a political subdivision, agency, or
instrumentality of this state engaged in the operation of a
hospital or an establishment that is an institution primarily
engaged in the care of the sick, the aged, or the mentally ill or
developmentally disabled who reside on the premises does not
violate subsection (1) if both of the following conditions are met:
(a) Pursuant to a written agreement or written employment
policy arrived at between the employer and the employee before
performance of the work, a work period of 14 consecutive days is
accepted instead of the workweek of 7 consecutive days for purposes
of overtime computation.
(b) For the employee's employment in excess of 8 hours in a
workday and in excess of 80 hours in the 14-day period, the
employee receives compensation at a rate of 1-1/2 times the regular
rate, which shall be not less than the statutory minimum hourly
rate at which the employee is employed.
(4) Subsections (1), (2), and (3) do not apply to any of the
following:
(a) An employee employed in a bona fide executive,
administrative, or professional capacity, including an employee
employed in the capacity of academic administrative personnel or
teacher in an elementary or secondary school. However, an employee
of a retail or service establishment is not excluded from the
definition of employee employed in a bona fide executive or
administrative capacity because of the number of hours in the
employee's workweek that the employee devotes to activities not
directly or closely related to the performance of executive or
administrative activities, if less than 40% of the employee's hours
in the workweek are devoted to those activities.
(b) An individual who holds a public elective office.
(c) A political appointee of a person holding public elective
office or a political appointee of a public body, if the political
appointee described in this subdivision is not covered by a civil
service system.
(d) An employee employed by an establishment that is an
Senate Bill No 934 (H-5) as amended May 27, 2014
amusement or recreational establishment, if the establishment does
not operate for more than 7 months in a calendar year.
(e) An employee employed in agriculture, including farming in
all its branches, which among other things includes: cultivating
and tilling soil; dairying; producing, cultivating, growing, and
harvesting agricultural or horticultural commodities; raising
livestock, bees, fur-bearing animals, or poultry; and a practice,
including forestry or lumbering operations, performed by a farmer
or on a farm as an incident to or in conjunction with farming
operations, including preparation for market, delivery to storage,
or delivery to market or to a carrier for transportation to market
or processing or preserving perishable farm products.
(f) An employee who is not subject to the minimum hourly wage
provisions of this act.
(5) The director of the department of licensing and regulatory
affairs shall promulgate rules under the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to define the terms
used in subsection (4).
(6) For purposes of administration and enforcement, an amount
owing to an employee that is withheld in violation of this section
is unpaid minimum wages under this act.
(7) The legislature shall annually appropriate from the
general fund to each political subdivision affected by subsection
(2) an amount equal to the difference in direct labor costs before
and after [the effective date of this act] arising from any change in
existing law
that results from the enactment of subsection (2) and incurred by
the political subdivision.
(8) In lieu of monetary overtime compensation, an employee
subject to this act may receive compensatory time off at a rate
that is not less than 1-1/2 hours for each hour of employment for
which overtime compensation is required under this act, subject to
all of the following:
(a) The employer must allow employees a total of at least 10
days of leave per year without loss of pay and must provide the
compensatory time to the employee under either of the following:
(i) Applicable provisions of a collective bargaining agreement,
memorandum of understanding, or any other written agreement between
the employer and representative of the employee.
(ii) If employees are not represented by a collective
bargaining agent or other representative designated by the
employee, a plan adopted by the employer and provided in writing to
its employees that provides employees with a voluntary option to
receive compensatory time off for overtime work when there is an
express, voluntary written request to the employer by an individual
employee for compensatory time off in lieu of overtime pay before
the performance of any overtime assignment.
(b) The employee has not earned compensatory time in excess of
the applicable limit prescribed by subdivision (d).
(c) The employee is not required as a condition of employment
to accept or request compensatory time. An employer shall not
directly or indirectly intimidate, threaten, or coerce or attempt
to intimidate, threaten, or coerce an employee for the purpose of
interfering with the employee's rights under this section to
request or not request compensatory time off in lieu of payment of
overtime compensation for overtime hours, or requiring an employee
to use compensatory time. In assigning overtime hours, an employer
shall not discriminate among employees based upon an employee's
choice to request or not request compensatory time off in lieu of
overtime compensation. An employer who violates this subsection is
subject to a civil fine of not more than $1,000.00.
(d) An employee may not accrue more than a total of 240 hours
of compensatory time. An employer shall do both of the following:
(i) Maintain in an employee's pay record a statement of
compensatory time earned by that employee in the pay period that
the pay record identifies.
(ii) Provide an employee with a record of compensatory time
earned by or paid to the employee in a statement of earnings for
the period in which the compensatory time is earned or paid.
(e) Upon the request of an employee who has earned
compensatory time, the employer shall, within 30 days following the
request, provide monetary compensation for that compensatory time
at a rate not less than the regular rate earned by the employee at
the time the employee performed the overtime work.
(f) An employee who has earned compensatory time authorized
under this subsection shall, upon the voluntary or involuntary
termination of employment or upon expiration of this subsection, be
paid unused compensatory time at a rate of compensation not less
than the regular rate earned by the employee at the time the
employee performed the overtime work. A terminated employee's
receipt of or eligibility to receive monetary compensation for
earned compensatory time shall not be used by either of the
following:
(i) The employer to oppose an employee's application for
unemployment compensation under the Michigan employment security
act, 1936 (Ex Sess) PA 1, MCL 421.1 to 421.75.
(ii) The state to deny unemployment compensation or diminish an
employee's entitlement to unemployment compensation benefits under
the Michigan employment security act, 1936 (Ex Sess) PA 1, MCL
421.1 to 421.75.
(g) An employee shall be permitted to use any compensatory
time accrued under this subsection for any reason unless use of the
compensatory time for the period requested will unduly disrupt the
operations of the employer.
(h) Unless prohibited by a collective bargaining agreement, an
employer may terminate a compensatory time plan upon not less than
60 days' notice to employees.
(i) As used in this subsection:
(i) "Compensatory time" and "compensatory time off" mean hours
during which an employee is not working and for which the employee
is compensated in accordance with this subsection in lieu of
monetary overtime compensation.
(ii) "Overtime assignment" means an assignment of hours for
which overtime compensation is required under this act.
(iii) "Overtime compensation" means the compensation required
under this section.
Sec. 4b. (1) An employer may pay a new employee who is less
than 20 years of age a training hourly wage of $4.25 for the first
90 days of that employee's employment. The hourly wage authorized
under this subsection is in lieu of the minimum hourly wage
otherwise prescribed by this act.
(2) Except as provided in subsection (1), the minimum hourly
wage for an employee who is less than 18 years of age is 85% of the
general minimum hourly wage established in section 4.
(3) An employer shall not displace an employee to hire an
individual at the hourly wage authorized under this section. As
used in this subsection, "displace" includes termination of
employment or any reduction of hours, wages, or employment
benefits.
(4) A person who violates subsection (3) is subject to a civil
fine of not more than $1,000.00.
Sec. 4c. On petition of a party in interest or on his or her
own initiative, the commissioner shall establish a suitable scale
of rates for apprentices, learners, and persons with physical or
mental disabilities who are clearly unable to meet normal
production standards. The rates established under this section may
be less than the regular minimum wage rate for workers who are
experienced and who are not disabled.
Sec. 4d. (1) Before September 1, 2014, the minimum hourly wage
rate is $2.65 per hour and, beginning September 1, 2014, the
minimum hourly wage rate is 38% of the minimum hourly wage rate
established in section 4 if all of the following occur:
(a) The employee receives gratuities in the course of his or
her employment.
(b) If the gratuities described in subdivision (a) plus the
minimum hourly wage rate under this subsection do not equal or
exceed the minimum hourly wage otherwise established under section
4, the employer pays any shortfall to the employee.
(c) The gratuities are proven gratuities as indicated by the
employee's declaration for purposes of the federal insurance
contributions act, 26 USC 3101 to 3128.
(d) The employee was informed by the employer of the
provisions of this section.
(2) As used in this section, "gratuities" means tips or
voluntary monetary contributions received by an employee from a
guest, patron, or customer for services rendered to that guest,
patron, or customer and that the employee reports to the employer
for purposes of the federal insurance contributions act, 26 USC
3101 to 3128.
Sec. 5. (1) The governor shall appoint, with the advice and
consent of the senate, a wage deviation board composed of 3
representatives of the employers, 3 representatives of the
employees, and 3 persons representing the public. One of the 3
persons representing the public shall be designated as chairperson.
Members shall serve for terms of 3 years, except that of the
members first appointed, 1 from each group shall be appointed for 1
year, 1 for 2 years, and 1 for 3 years. The commissioner shall be
secretary of the wage deviation board.
(2) A majority of the members of the board constitute a
quorum, and the recommendation or report of the board requires a
vote of not less than a majority of its members. The business which
the wage deviation board may perform shall be conducted at a public
meeting of the board held in compliance with the open meetings act,
1976 PA 267, MCL 15.261 to 15.275. Public notice of the time, date,
and place of the meeting shall be given in the manner required by
that act.
(3) A writing prepared, owned, used, in the possession of, or
retained by the wage deviation board in the performance of an
official function shall be made available to the public in
compliance with the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
(4) The per diem compensation of the board and the schedule
for reimbursement of expenses shall be established annually by the
legislature.
(5) The wage deviation board may request data of any employer,
subject to the provisions of this act, as to the wages paid and
hours worked by the employer's employees and may hold hearings as
necessary in the process of obtaining this information.
(6) The wage deviation board shall submit its report to the
commissioner, who shall file it in his or her office as a public
record together with the regulations established by the board.
(7) At any time after a deviated wage rate has been in effect
for 6 months or more, the wage deviation board may reconsider the
rate.
Sec. 6. The commissioner may promulgate rules necessary for
administration of this act under the administrative procedures act
of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 7. An employer who is subject to this act or any
regulation or order issued under this act shall furnish each
employee with a statement of the hours worked by the employee and
of the wages paid to the employee, listing deductions made each pay
period. The employer shall furnish the commissioner, upon demand, a
sworn statement of the wage information. These records shall be
open to inspection by the commissioner, his or her deputy, or any
authorized agent of the department at any reasonable time. An
employer subject to this act or any regulation or order issued
under this act shall keep a copy of this act and regulations and
orders promulgated under this act posted in a conspicuous place in
the workplace that is accessible to employees. The commissioner
shall furnish copies of this act and the regulations and orders to
employers without charge.
Sec. 8. The commissioner shall administer and enforce this act
and, at the request of the wage deviation board, may investigate
and ascertain the wages of employees of an employer subject to this
act. The commissioner and the commissioner's employees shall not
reveal facts or information obtained in the course of official
duties, except as when required by law, to report upon or take
official action or testify in proceedings regarding the affairs of
an employer subject to this act.
Sec. 9. (1) If an employer violates this act, the employee
affected by the violation, at any time within 3 years, may do any
of the following:
(a) Bring a civil action for the recovery of the difference
between the amount paid and the amount that, but for the violation,
would have been paid the employee under this act and an equal
additional amount as liquidated damages together with costs and
reasonable attorney fees as are allowed by the court.
(b) File a claim with the commissioner who shall investigate
the claim.
(2) If the commissioner determines there is reasonable cause
to believe that the employer has violated this act and the
commissioner is subsequently unable to obtain voluntary compliance
by the employer within a reasonable period of time, the
commissioner shall bring a civil action under subsection (1)(a).
The commissioner may investigate and file a civil action under
subsection (1)(a) on behalf of all employees of that employer who
are similarly situated at the same work site and who have not
brought a civil action under subsection (1)(a). A contract or
agreement between the employer and the employee or any acceptance
of a lesser wage by the employee is not a bar to the action.
(3) In addition to bearing liability for civil remedies
described in this section, an employer who fails to pay the minimum
hourly wage in violation of this act, or who violates a provision
of section 4a governing an employee's compensatory time, is subject
to a civil fine of not more than $1,000.00.
Sec. 10. (1) This act does not apply to an employer that is
subject to the minimum wage provisions of the fair labor standards
act of 1938, 29 USC 201 to 219, unless those federal minimum wage
provisions would result in a lower minimum hourly wage than
provided in this act. Each of the following exceptions applies to
an employer who is subject to this act only by application of this
subsection:
(a) Section 4a does not apply.
(b) This act does not apply to an employee who is exempt from
the minimum wage requirements of the fair labor standards act of
1938, 29 USC 201 to 219.
(2) Notwithstanding subsection (1), an employee shall be paid
in accordance with the minimum wage and overtime compensation
requirements of sections 4 and 4a if the employee meets either of
the following conditions:
(a) He or she is employed in domestic service employment to
provide companionship services as defined in 29 CFR 552.6 for
individuals who, because of age or infirmity, are unable to care
for themselves and is not a live-in domestic service employee as
described in 29 CFR 552.102.
(b) He or she is employed to provide child care, but is not a
live-in domestic service employee as described in 29 CFR 552.102.
However, the requirements of sections 4 and 4a do not apply if the
employee meets all of the following conditions:
(i) He or she is under the age of 18.
(ii) He or she provides services on a casual basis as defined
in 29 CFR 552.5.
(iii) He or she provides services that do not regularly exceed
20 hours per week, in the aggregate.
(3) This act does not apply to persons employed in summer
camps for not more than 4 months or to employees who are covered
under section 14 of the fair labor standards act of 1938, 29 USC
214.
(4) This act does not apply to agricultural fruit growers,
pickle growers and tomato growers, or other agricultural employers
who traditionally contract for harvesting on a piecework basis, as
to those employees used for harvesting, until the board has
acquired sufficient data to determine an adequate basis to
establish a scale of piecework and determines a scale equivalent to
the prevailing minimum wage for that employment. The piece rate
scale shall be equivalent to the minimum hourly wage in that, if
the payment by unit of production is applied to a worker of average
ability and diligence in harvesting a particular commodity, he or
she receives an amount not less than the hourly minimum wage.
(5) Notwithstanding any other provision of this act,
subsection (1)(a) and (b) and subsection (2) do not deprive an
employee or any class of employees of any right that existed on
September 30, 2006 to receive overtime compensation or to be paid
the minimum wage.
Sec. 11. An employer that discharges or in any other manner
discriminates against an employee because the employee has served
or is about to serve on the wage deviation board or has testified
or is about to testify before the board, or because the employer
believes that the employee may serve on the board or may testify
before the board or in any investigation under this act, and any
person who violates any provision of this act or of any regulation
or order issued under this act, is guilty of a misdemeanor.
Sec. 12. Any employer that consistently discharges employees
within 10 weeks of their employment and replaces the discharged
employees without work stoppage is presumed to have discharged them
to evade payment of the wage rates established in this act and is
guilty of a misdemeanor.
Sec. 13. (1) An employer having employees subject to this act
Senate Bill No. 934 (H-5) as amended May 27, 2014
shall not discriminate between employees within an establishment on
the basis of sex by paying wages to employees in the establishment
at a rate less than the rate at which the employer pays wages to
employees of the opposite sex for equal work on jobs, the
performance of which requires equal skill, effort, and
responsibility and that is performed under similar working
conditions, except if the payment is made under 1 or more of the
following:
(a) A seniority system.
(b) A merit system.
(c) A system that measures earnings by quantity or quality of
production.
(d) A differential based on a factor other than sex.
(2) An employer that is paying a wage differential in
violation of this section shall not reduce the wage rate of an
employee to comply with this section.
(3) For purposes of administration and enforcement, any amount
owing to an employee that has been withheld in violation of this
section is considered unpaid minimum wages under this act.
Sec. 14. An employer operating a massage establishment as
defined in section 2 of former 1974 PA 251 that violates this act
is guilty of a misdemeanor punishable by imprisonment for not more
than 1 year or a fine of not more than $1,000.00, or both.
Enacting section 1. The minimum wage law of 1964, 1964 PA 154,
MCL 408.381 to 408.398, is repealed [.
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