Michigan Court Stops Big Changes for Sick Leave and Minimum Wage – For Now

Michigan Court Stops Big Changes for Sick Leave and Minimum Wage – For Now

 

Michigan employers have been working with the state’s Paid Medical Leave Act since 2019. For a refresher, you can access the state-required poster here. It provides a good summary of the law and the rights it confers on employees.

But Michigan employees thought they were getting even more sick leave rights (and higher minimum wage) beginning on February 20, 2023. On January 26, the Michigan Court of Appeals ruled otherwise.

Because a few things have happened since 2019, you may have forgotten how the Paid Medical Leave Act came about in the first place. Michigan had a ballot initiative for the Earned Sick Time Act, but the Legislature passed the Act on its own, thereby taking it off the ballot. Then, shortly before the Act was scheduled to take effect, the Legislature amended it to weaken many of the employee rights. Following court challenges, this was held unconstitutional, with a February 19, 2023 expiration date on the current law and the re-activation of the Earned Sick Time Act the next day. But on appeal, the Court ruled the Legislature acted properly. So, we are back to where we started with 2019 law—for now.

This is a hot issue in Michigan, and I expect further appeals to the Michigan Supreme Court. I also expect political pressure on the other branches of government. Changes to paid sick leave may still be on the horizon.

And minimum wage changes are even more likely.

The same court case and the same adopt-and-amend issues are at play with Michigan’s minimum wage laws. So, the new general minimum wage of $13.03 (with some exceptions) will NOT take effect in Michigan on February 20, 2023. But again, I expect court challenges to continue, and I expect Michigan lawmakers to take up the minimum wage through other channels as well.

THK’s employment lawyers will continue to monitor these ongoing developments and are available to assist Michigan employers with a wide variety of workplace legal issues.

Michael J. Hays, Business Counsel & Partner, THK Law, LLP

Author: Michael J. Hays is a civil litigation attorney and Partner at THK Law, LLP. His practice areas include employment law, business transactions, and real estate law. Michael is licensed to practice in Indiana and Michigan.

You can contact Michael by calling 574.232.3538 or email mhays@thklaw.com

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

Employment Questions for 2021 and Beyond

Employment Questions for 2021 and Beyond

 

About a year ago, most employers had to abruptly change their operations. You may have rushed out work-from-home arrangements. You may have been forced to reduce your workforce. You may have sought out PPP loans to keep your business afloat. And while you tried to maintain some business operations through all of this, you had to keep your eyes on changing state and federal laws and guidance. We hope you developed a COVID-19 plan and kept track of new paid time off requirements for pandemic-related work absences. But now that case counts seem to be coming down, that more and more people are getting vaccinated, and that we’ve all learned to live with masks, many employers have to face new choices. Below, I’ve assembled some of the leading questions employers face and some guidance for complying with the latest standards.

 

A. Can I mandate vaccines for my workforce?

The short answer is yes. If you wish to do this, consult with legal counsel to structure it properly, as you will have to allow for some exceptions under the standards of the Civil Rights Act and the Americans with Disabilities Act. But it is possible to enact a mandate, and data suggest that very few workers would qualify for exceptions. However, you should also consider the non-legal implications. If you expect some workers to refuse, are you prepared to terminate their employment? Many employers are not ready to take that step, and the latest reports suggest that few employers will make vaccination mandatory. As an alternative, some have suggested paying a premium to workers who get vaccinated. Ironically, this “voluntary” option could create a greater legal risk than a mandate. Older EEOC guidance on wellness programs suggests that if employers give more than a de minimis incentive to encourage participation, they could be discriminating against workers whose disabilities prevent them from taking part in the wellness initiative. And there is no current guidance on what amounts to “de minimis.” Even so, at least one national company announced a plan to pay $100 bonuses to vaccinated employees. Employers certainly can—and probably should—take steps to encourage vaccination, but be sure you check with your legal advisors before wading into this area.

 

B. Am I required to offer paid time off for COVID-19?

Maybe. Many employers re-set benefits at the start of a year, so plenty of workers will have access to some paid sick time in 2021. And some states (such as Michigan) mandate paid sick leave that could be used for many Coronavirus-related situations.

Further, although the paid leave rights under the Families First Coronavirus Response Act expired December 31, 2020, there are circumstances where that can extend to March 31, 2021. And some lawmakers are exploring further extensions. Even without new legislation, employers should also be mindful of unpaid leave rights under the FMLA and other controlling policies on workplace leave.

 

C. What safety precautions should I have in my workplace?

The primary considerations are the things we have been hearing for months now: social distancing, face coverings, and frequent hand washing. But OSHA recently published comprehensive standards on what that means. See the latest guidelines here.

 

D. Can I enforce mask mandates on my clients and customers?

Yes. You have a duty to reasonably accommodate business patrons whose medical conditions prevent them from wearing a face covering. But that does not necessarily mean letting them into your place of business unmasked. The accommodation could be conducting business online, sending a (mask-wearing) representative into your business on behalf of the customer, or having the person wear a different kind of face covering.

 

E. How should I approach the future of work-from-home?

The answer to this will vary greatly from company to company. Some employers are eager to get their workforce back into the office and will be looking for ways to scale back, or even eliminate, working from home. Others will find the forced experiment of 2020 pushing them towards a business model that encourages telecommuting. And still others will fall in between. As a general rule, employers have a lot of latitude in setting the terms of employment, but anti-discrimination laws figure into the equation. Under some conditions, telecommuting could be a reasonable accommodation for a worker with a disability. The option to work from home could also be considered a perk of employment, so you will want to be sure it is offered on a fair basis. The same could be said of the option to not work from home. In other words, you will need to take steps to ensure workspace assignments are made in a non-discriminatory manner.

 

F. Where can I find more help?

We’ve already pointed you to the OSHA website, and useful guidance is also available from the EEOC. For employers with memberships in local or national human resources organizations, your membership likely entitles you to helpful publications on these and many other issues. And our employment lawyers at Tuesley Hall Konopa are always ready to help. As our communities move into the next season of this pandemic, we look forward to working with you to promote legal compliance and help keep everyone healthy and safe.

Michael J. Hays, Business Counsel & Partner, Tuesley Hall Konopa, LLP

Author: Michael J. Hays is a civil litigation attorney and Partner at Tuesley Hall Konopa, LLP. His practice areas include employment law, business transactions, and real estate law. Michael is licensed to practice in Indiana and Michigan.

You can contact Michael by calling 574.232.3538 or email mhays@thklaw.com

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

COVID-19 Planning for Employers

COVID-19 Planning for Employers

I Love it When a Plan Comes Together: COVID-19 Planning for Employers

Most episodes of the 1980s hit show, The A-Team, involved the team cobbling together some super-weapon from a collection of spare parts that they would use to defeat the bad guys. After securing their victory, team leader, Col. John “Hannibal” Smith, would often say, “I love it when a plan comes together . . .”

As employers have been cobbling together their defenses of hand sanitizer, disinfecting wipes, and face masks, they need to also work on crafting a plan. In fact, Indiana Governor Eric Holcomb’s latest Executive Order says, “On or before May 11, 2020, all Hoosier employers shall develop a plan to implement measures and institute safeguards to ensure a safe environment for their employees, customers, clients, and members. The plan shall be provided to each employee or staff and posted publicly.” As you develop your company’s plan, here are some important considerations:

  • It doesn’t have to be lengthy. Written workplace policies serve many goals, but the most important one here is communication. Use this plan to send clear messages; don’t bog down your workforce with too many details.
  • It should be flexible. None of us have ever lived through a pandemic like this. Things have changed a lot in recent weeks and months and are likely to keep changing. Let your employees know that current workplace procedures are temporary and are likely to change.
  • It must take safety seriously. Read the relevant CDC guidance; study other reputable local, regional, and national resources to determine concrete steps your company can take to do its part in preventing the spread of COVID-19. Seek professional advice if you need it.
  • It must respect other relevant employment laws. All the existing rules against discrimination, harassment, and retaliation—along with laws requiring reasonable accommodations for disabilities and religious beliefs—continue in force. Congress recently passed new laws providing paid sick leave and family leave to most workers, and various other state or federal employment laws could be implicated by your company’s COVID-19 response. Keep these considerations in mind.

Having a plan is required in Indiana, but it is a good practice in other states, too. Tuesley Hall Konopa attorneys are available to assist businesses and individuals in Indiana or Michigan with a variety of legal needs. Visit our website at thklaw.com for a comprehensive list of our legal services.

Michael J. Hays, Business Counsel & Partner, Tuesley Hall Konopa, LLP

Author: Partner, Michael J. Hays, is an employment law and civil litigation attorney at Tuesley Hall Konopa, LLP. His practice areas include civil litigation, employment law, business counsel, real estate transactions, and contract review. Michael is licensed to practice in Indiana and Michigan.

You can contact Michael by calling 574.232.3538 or by email at mhays@thklaw.com

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

Work in the Time of Coronavirus

Work in the Time of Coronavirus

If you’ve read Love in the Time of Cholera, you know that running a business in 2020 is nothing like that. Employers addressing this unprecedented pandemic have lots of questions. Below are some quick tips on sick leave, layoffs, medical evaluations, and other issues. As this crisis unfolds, Tuesley Hall Konopa will remain open to address your legal needs. Coming changes might affect our in-person contact, but our lawyers and other professionals will stay engaged to serve our clients. In the meantime, consider the following guidance, which is current as of March 16, 2020:

A. It’s okay to stick with your normal paid time off policies for now, but be ready for changes.

The House of Representatives passed the Families First Coronavirus Response Act on March 14th. If the Senate passes it, and the President signs it, then employees will have a guarantee of 14 sick days relating to COVID-19, easier access to FMLA leave, and other benefits. We are waiting to see the final law before offering more detailed guidance.

As of today, you may insist that employees away from work for Coronavirus reasons follow normal paid time off policies. We advise that you do not penalize employees under normal attendance policies whose absences are caused by the pandemic. We also recommend employers exercise some flexibility and understanding with required doctors’ notes.

B. If mass layoffs may be coming to your business, now is the time to start planning.

The federal WARN Act generally requires 60 days’ notice for “mass layoffs” by employers with 100 or more employees. Please seek legal advice because the counting of employees can be confusing. Employers are to provide a specific written notice to affected workers and to certain local government offices.

A “mass layoff” only falls under the Act if it will be for 6 months or more, but if there is a risk at least some employees will have their hours reduced by at least 50% for at least six months, then the most conservative advice would to be give WARN notices even if you hope and expect any layoffs will be shorter.

WARN is a complicated law with exceptions for “natural disasters” and “unforeseeable business circumstances” that might apply to COVID-19. Generally, these exceptions spare the employer liability for shortening the notice, but notice is still required. Given the unprecedented nature of this outbreak, Congress may intervene to modify the WARN Act. Even so, if the size of your workforce and the size of your layoff implicates WARN, you should consider giving as much WARN notice as possible—even if it’s only a few days.

C. Employers will have to be creative.

There is a “general duty” under OSHA for all employers to protect their employees from workplace hazards. You may rely on this to force employees to stay home from work if they have flu-like symptoms, have likely exposure to Coronavirus, or present other risks. You may also:

  • Consider new standards for work-from-home to mitigate risks;
  • Inform your employees of any exposure risk they may have faced at work, but without revealing confidential medical information about affected employees;
  • Consider temperature screenings before allowing employees to return to work but seek guidance as other “medical examinations” could implicate the Americans with Disabilities Act.

D. Be thinking about “force majeure.”

Using a Latin phrase, the law has long allowed a contracting party to avoid fulfilling a contract if unforeseeable circumstances make performance impractical or impossible. Historically, things like wars, natural disasters, and labor strikes have been considered force majeure events. Most legal scholars believe the COVID-19 outbreak will fit that standard. In fact, the NBA is already talking of invoking this rule to avoid paying players.  Depending on the terms of your agreements, your business may be able to rely on force majeure to avoid certain contracts. But your business partners might be able to do the same to you. This is another area where advance planning and careful guidance are in order.

E. Stay in touch.

The news media and your inbox are flooded with Coronavirus information. That won’t stop any time soon. As you try to run your business while staying abreast of public health needs, contact Tuesley Hall Konopa for legal guidance in this evolving situation.

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Michael J. Hays, Business Counsel & Partner, Tuesley Hall Konopa, LLP

Author: Michael J. Hays is a civil litigation attorney and Partner at Tuesley Hall Konopa, LLP. His practice areas include civil litigation, employment law, business counsel, and contract review. Michael is licensed to practice in Indiana and Michigan.

You can contact Michael by calling 574.232.3538 or by email mhays@thklaw.com

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation.
Arbitration vs. Litigation of Business Disputes?

Arbitration vs. Litigation of Business Disputes?

Many standard form business and especially employment, consumer and other contracts provide that some or all disputes between the parties can be resolved only by arbitration, as opposed to traditional litigation.

Recently, the business and legal press discussion of alternative dispute resolution options have focused on two somewhat divergent attacks against arbitration. First, state courts have attempted to expand consumer or employment-related arbitration claims to much broader class actions. A 9th Circuit Federal Court of Appeals’ decision to that effect was reversed by the U.S. Supreme Court (Lamps Plus v. Varela decided 4/24/19). Alternatively, more recently, on September 20, 2019, the Democratically controlled U.S. House of Representatives passed the Forced Arbitration Injustice Repeal Act (FAIR) which proposes to ban private pre-dispute arbitration agreements for employment, consumer, antitrust or civil rights’ claims. President Trump, however, has already indicated that, if in the unlikely event that the U.S. Senate passes the “FAIR” Act, he will veto it. September 21, 2019, Wall Street Journal editorial titled its criticism of the “FAIR” Act as the Lawyer Enrichment Act. Part of the Journal’s premise was that the plaintiff’s bar benefits much more than its class of claimants, who often actually receive little financial benefit as a result of such class action proceedings.

Even though the U.S. Supreme Court’s decision in Lamps Plus was by the narrowest 5 to 4 vote, it appears as though the alternative of arbitration remains viable.

In looking at the alternative of arbitration versus traditional litigation, a business manager or owner is often presented with what may be a standard form, or, where more dollars are at risk, a specially drafted contract, which includes a mandatory dispute resolution provision. What are the benefits and lists of agreeing to arbitration as a primary or sole means for resolving a business disagreement?

Arbitration proceedings are typically tied to a set of rules governing the entire proceeding, often in the form of those promulgated by the American Arbitration Association (the “AAA”), or those provided by what was formally known as the Judicial Arbitration and Mediation Services, Inc., and now identified by the acronym “JAMS”. The AAA has literally hundreds of qualified arbitrators, many of whom are current or former practicing attorneys or jurists. JAMS’ panel of arbitrators is heavily populated by retired state and federal judges. The AAA has a special set of rules for resolution of commercial disputes and, for example, construction disputes as well, while JAMS’ offerings include rules specifically geared to employment disputes.

Proponents of commercial (“BTB”) arbitration for business dispute resolution, including the AAA itself, promote arbitration as a more efficient, expeditious and less expensive alternative to traditional litigation. In addition, confidentiality of heavily protected intellectual property or other confidential business processes and procedures can be significantly enhanced through arbitration. Advocates of arbitration also cite arbitration’s ability to avoid the excesses of emotional jury awards as a benefit. On the other hand, business owners and managers generally view traditional litigation as a process burdened by the archaic procedural rules and long delays typically involved in traditional litigation filed in state or federal courts.

The advantages promoted by the advocates of arbitration are generally accurate but are variable depending upon the nature and complexity of the breadth of a particular business dispute and are somewhat dependent on the rules governing the proceeding.

Specially negotiated commercial agreements allow the parties to craft dispute resolution provisions to include rules detailing such things as the specific industry and technical training of the arbitrator and even the level of experience, of a single or panel of arbitrators. Such provisions can also mandate an initial step of non-binding Mediation. These preliminary proceedings provide the possibility of increasing the chances of preserving a long-standing and valuable business relationship. Negotiating provisions also can exclude certain types of disputes from the scope of the arbitration provision. For example, provisions may permit a party obtaining a temporary restraining order or preliminary injunction to maintain the status quo pending the ultimate resolution of the arbitration proceeding. Similarly, specially negotiated and drafted dispute resolution provisions can limit the scope and breadth of the arbitration proceeding, choose the governing rules for the matter, limit the scope and/or time of the discovery process, which often belabors traditional litigation, and also limit the types of remedies that the arbitrator can award. In addition, the arbitrator can be empowered to award attorney fees and expenses to the prevailing party. Finally, to avoid or at least limit the likelihood of any traditional litigation, placing limitations on and/or specifically defining what is arbitrable under the provision and further reduce costs and time.

In its recent editorial, the Wall Street Journal also cited a number of statistics from the U.S. Chamber of Commerce’s Institute for Legal Reform, including those showing that even employees are three times more likely to win in arbitration than in court, while arbitration is over 15% “quicker” than litigation, even though the average arbitrated dispute still required over 18 months to be resolved.

Business attorneys themselves should be cautious in drafting dispute resolution provisions in a specially negotiated agreement without consulting with an experienced commercial litigator, as well as an experienced mediator and/or arbitrator. Business interests can be overzealous in restricting the scope of the arbitration provision or in establishing unrealistic timelines for the proceeding.

Further, not every business dispute is best resolved by arbitration. Here, avoiding what is often referred to as “Bet the Company” issues, such as those involving critical intellectual property raising to the level of being the “lifeblood” of a business should likely be avoided.

Nevertheless, arbitration provides business owners and managers with what may often be a more expeditious, less costly, and confidential means of resolving “BTB” disputes. In negotiating alternative dispute resolution provisions, business owners and managers should have their general business legal counsel consult with his or her litigation colleagues to assure the best results.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation.

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Author: Partner, Thomas J. Hall, is a business and succession planning attorney at Tuesley Hall Konopa, LLP where he has counseled Michiana business owners for over 30 years in the day-to-day operations of running a business. Tom is also a certified mediator and is licensed to practice in Indiana and Michigan.

You can contact Tom Hall by calling 574.232.3538 or email thall@thklaw.com.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

Considerations for Buying and Selling Real Estate When Tenants are Involved

Considerations for Buying and Selling Real Estate When Tenants are Involved

Considerations for Buying and Selling Real Estate When Tenants are Involved – The Importance of the Tenant Estoppel Certificate.

Real estate transactions are strange and often lead to unforeseen complications. Real estate transactions become further complicated when they involve tenant-occupied properties, be it commercial spaces, apartment complexes, or single-family homes. The purchase of a rental property comes with questions you don’t get when buying an unoccupied building. As a seller, for example, you will need to consider what kind of notice must be provided to residents before the sale? As a buyer, you must take into account the cost of security deposits you will have to pay to tenants down the road when determining the final price to be paid at closing. And both parties will need to agree who is responsible for damages caused by tenants before the sale closes. The purchase and sale of tenant-occupied real estate can also further complicate the due diligence process. For example, it is extremely important to obtain and review all lease agreements potentially affecting the property. Another essential part of completing due diligence comes in the form of tenant estoppel certificates.

Tenant estoppel certificates are signed statements that certify facts concerning the tenant’s lease and the status of its occupancy. According to Black’s Law Dictionary, an estoppel statement is “a signed statement by a party certifying for another’s benefit that certain facts are correct, as that a lease exists, that there are no defaults (by the landlord or the tenant), and that rent is paid to a certain date. A party’s delivery of this statement estops that party from later claiming a different state of facts.” Black’s Law Dictionary, 572 (7th Ed., 1999). In short, these certificates are used to inform potential purchasers of the rights and obligations of existing tenants.

An estoppel certificate will usually memorialize the date the lease began, the duration of the lease, monthly rental amount, security deposit, renewal options, whether any modifications to the lease have been made, etc. It will also certify whether rent is in arrears or up to date, whether any subleases are in place, whether there are any oral agreements with the landlord or promises made by the landlord, etc. Additionally, estoppel certificates give tenants the option to explain any claims they might have against the landlord. In some circumstances, a tenant estoppel certificate can also require that the tenant certify whether it has used any hazardous substances on the premises or whether it has violated any environmental laws. By signing this statement, the tenant is prohibited from taking a contrary position in the future. This allows prospective purchasers to fully assess the economic benefits they will gain by purchasing a tenant-occupied property as well as potential liabilities they may face after assuming ownership.

Tenants are not required to sign an estoppel certificate unless mandated to do so by the terms of their lease. Luckily, most commercial and residential form leases contain clauses requiring tenants to sign estoppel certificates when requested by the landlord. If a tenant fails to sign an estoppel certificate as requested, it may be considered an affirmation of the facts contained therein or it may be used as a basis for evicting the tenant for breach of the lease. It is therefore important to thoroughly review all leases affecting tenant-occupied property as part of your due diligence before closing.

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Author: Elizabeth (Libby) A. Klesmith is a civil litigation and business attorney at Tuesley Hall Konopa, LLP. Her practice areas include real estate, insurance defense, and trademark law. She is licensed to practice in Indiana and Michigan

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.