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Michigan Credit Union League

Paid Medical Leave and Minimum Wage Amendments: What Credit Unions Need to Know

On Dec. 3, the Michigan Legislature passed the Paid Medical Leave Act (Act) (Senate Bill 1175) and the Minimum Wage Amendments to the Improved Workforce Opportunity Wage Act (Senate Bill 1171). The bills were signed by Governor Snyder on Dec. 14 with an effective date of March 2019.

On Sept. 5, the legislature adopted the petition initiative creating the Earned Sick Time Act, enacting it as Public Act 338 of 2018. Senate Bill 1175 amends this Act. Senate Bill 1171 amends the Improved Workforce Opportunity Wage Act revising the general minimum hourly wage and minimum hourly wage for employees who receive tips.

The Michigan Credit Union League (MCUL) has prepared the following FAQ to assist credit unions in understanding how the rules will impact the credit union industry and member owners.

Senate Bill 1175 – Paid Medical Leave Act

Q1. Is there a minimum number of individuals that a credit union must employ to be subject to the Paid Medical Leave Act?

A1. Yes, for credit union to be subject to Paid Medical Leave Act it must employ 50 or more individuals. An employer for purposes of this Act is any person, firm, business, education institution, nonprofit agency, corporation, LLC, or government entity. The definition of employer does not include the US government, another state or a political subdivision of another state.

Q2. What is “paid medical leave” under this Act?

A2. Paid medical leave under the Act means time off from work that is provided by an employer to eligible employees that can be used for the following purposes:

  • Mental or physical illness, injury or health condition; medical diagnosis; or preventative medical care for employee
  • Care of employee’s family member’s mental or physical illness, injury or health condition; preventative medical care for family member
  • If the eligible employee or eligible employee’s family member is a victim of domestic violence or sexual assault, the medical or psychological care or other counseling for physical or psychological injury or disability
  • For closure of employee’s primary workplace by order of a public official due to a public health emergency; for care for a child whose school or place of care was closed by order of public official due to a public health emergency
Q3. Who is considered an “eligible employee”?

A3. An eligible employee means an individual who is engaged in service to an employer in the business of the employer and from whom an employer is required to withhold for federal income tax purposes. Eligible employees DO NOT include:

  • An individual who is exempt from overtime requirements under the Fair Labor Standards Act
  • An individual who is not employed by a public agency and who is covered by a collective bargain agreement that is in effect
  • An individual employed by the US government, another state or a political subdivision of another state
  • An individual employed by an air carrier as a flight deck or cabin crew member
  • An employee as defined in the railway labor act
  • An employee as defined in the railroad unemployment insurance act
  • An employee whose primary work location is not in the state of Michigan
  • An individual who is a minor
  • An individual employed by an employer for 25 weeks or fewer in a calendar year for a job scheduled for 25 weeks or fewer
  • An individual who worked an average fewer than 25 hours per week during the preceding calendar year
Q4. How must the credit union accrue for paid medical leave?

A4. A credit union has two options for accrual:

  1. An eligible employee must accrue paid medical leave at a rate of at least one hour of paid medical leave for every 35 hours worked. The credit union may not limit the hours accrued to less than 40 hours per benefit year; or
  2. The credit union may provide at least 40 hours of paid medical leave to an eligible employee at the beginning of the benefit year. The credit union may prorate this time for eligible employees hired during the benefit year.

Under the Act, employers shall begin accruing paid medical leave on the effective date or upon commencement of an individual’s employment, whichever is later.

Q5. What if the credit union has an established Paid Time Off program that can be used for sick leave, vacation etc.?

A5. The Act allows for a rebuttable presumption that an employer is in compliance with the Act if the employer provides at least 40 hours of paid leave to an eligible employee each benefit year. “Paid leave” includes, but is not limited to, paid vacation days, paid personal days and paid time off.

Senate Bill 1171 – Improved Workforce Opportunity Wage Act

Q6. Will the recently passed minimum wage law impact credit unions?

A6. Under Senate Bill 1171, credit unions that currently pay employees a minimum wage will see an increase starting January 1, 2019, with a schedule to increase the wage each year through 2030:

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2018-12-19 00:00:00