Watch the Special Small Business Briefing featuring SBAM’s advocacy team.
Setting the Stage:
The 2024 election set the stage for an action-packed “lame duck” session in Lansing. Democrats lost control of the House of Representatives, ending their full control of state government. Faced with the impending loss of the chamber, Democratic lawmakers and stakeholder groups found a newfound urgency to pass a number of their priority policy items before the Democrat’s “trifecta” (Democratic control of the House, Senate, and Governor) comes to an end.
This newfound push has left many of Michigan’s small business owners concerned about potential new tax increases and mandates on employers that recently began to move through the legislative process. Committees in the House and Senate scheduled hearings to take votes on workers’ compensation system changes, a new family medical leave program, changes to independent contractor law, pay transparency and equity mandates, and much more.
Additionally, the House and the Senate recently voted for a costly increase to unemployment insurance benefits, which has been presented to Governor Whitmer for her signature. These changes will increase the maximum total of weeks of eligibility from 20 to 26 and will implement a series of increases to the maximum benefit amount until it reaches $614.00 per week in 2027. SBAM advocacy staff and members alike voiced their concerns to legislators that these bills would increase costs and hurt workforce availability, but these warnings were ignored.
This week is the final scheduled session week of lame duck, but last Friday, December 13 marked an important deadline and provided some clarity in different policy areas. The “Five-Day-Rule” in Michigan’s Constitution requires that bills be in the possession of each chamber for at least five days before they are voted on to become law. Because the last session day of the year is scheduled for December 19, bills that were not voted out of one chamber by Friday will not be able to become law before the end of the year and do not have a path to becoming law, unless other days placed on the calendar, which has yet to come to fruition.
What Issues Have Been Stopped?
While SBAM was disappointed to see troublesome bills advance through the process and remain in play, some very harmful policies were likely put to rest on Friday when they were not advanced out of their legislative chamber. Those bills include:
- SB 332-333; SB 4574-4575 – Paid Family Leave Mandate: A mandate that would require all employers to facilitate a new 12-15 paid family leave program gained momentum in the final days of this legislature and even made it out of committee in the Senate. SBAM issued a call to action on this issue and encouraged Senators to oppose this costly new mandate, which was estimated to cost a whopping $16-$17.2 billion dollars per year, according to the Senate’s nonpartisan Fiscal Agency. Luckily, the Senate did not take up this package for a vote and it does not have a path forward in 2025.
- SB 1079-1080 – Workers’ Compensation System Overhaul: Similar to the paid medical leave mandate, this bill also made its way out of committee but failed to pass the Senate. These changes would have done great damage to Michigan’s workers’ compensation system and would have reverted much of the progress that has been made since it was reformed in 2011 – rates have declined by 45% and premiums reduced by a cumulative $445 million.
- HB 4390 – Independent Contractor Restrictions: Efforts to implement a California-style “ABC Test” for contractors gained momentum one last time when HB 4390 appeared on the Labor committee agenda last week. Luckily, this harmful bill was finally put to rest and removed from the agenda.
- HB 4402-4406 – Wage Transparency Requirements and Increased Penalties: This package of bills would drastically increase penalties for wage and fringe benefit violations and would force employers to reveal wage information and historical data to employees. While Wednesday’s original House agenda included this harmful package of bills, once House members were informed of the bills’ contents and the adverse effects they would bring to small businesses in their community, they quickly lost momentum.
- HB 5461 – Mandatory Automatic IRA Program: This bill would have forced all employers who do not already offer a retirement savings benefit to facilitate a new state-administered IRA program. A simple amendment to make participation voluntary rather than mandatory would have eliminated most objections, but changes were not made and the bill did not advance.
What issues are still alive?
- SB 659; SB 888-892: Data privacy mandates and new requirements for data breaches
- Both sets of bills passed the Senate and await a vote in the House
- SB 605-611: “Polluter Pay” package of bills that would implement drastic cleanup standards and burdens for employers
- Passed by the Senate and awaits a vote in the House
- SB 1173: Would allow local governments to implement a variety of new wage and labor mandates and would create a patchwork of different requirements throughout the state
- Passed by the Senate and awaits a vote in the House
- SB 1011-1012: Expands the Consumer Protection Act to regulated industries
- Passed by the Senate and awaits a vote in the House
- HB 5895-5897; SB 954-956: Imposes strict price controls in declared states of emergency
- Respective versions passed in the House and the Senate
What’s Next?
While legislative session is still scheduled for Wednesday and Thursday this week, many observers question how much, if anything, the House will be able to accomplish at this time. On Friday, House Republicans chose to walk out of session and refused to vote on anything until they could come to an agreement with Democrats on changes to the Earned Sick Time Act and some sort of reinstatement of the tipped wage. It is unclear whether Republicans will be attending session on Wednesday.
Additionally, inner-caucus dynamics have created rifts between Democratic members in the House, and it is also unclear whether all 56 House Democrats will show up for voting Wednesday. Without a majority of members elected and serving, the House will not be able to vote on anything at all.
SBAM will be tracking all relevant issues closely over the coming days and will provide updates as they come.
We greatly appreciate your participation in the various Calls to Action we have issued, as they have made a real impact in swaying some lawmakers. Keep your eyes peeled for future requests over the upcoming weeks as we continue to advocate against a variety of harmful policies.