Michigan Developments
Eric Rule,
Director of Governmental Affairs

Minimum wage, youth and training wages in effect
As of Oct. 1, Michigan’s minimum hourly wage is $6.95. The state’s minimum wage law covers employers who employ two or more workers 16 years of age or older. Two more increases in the minimum wage are scheduled for July 2007 and July 2008.

In order to provide some relief for businesses from the increase in the minimum wage, business groups won a reduced wage for workers under the age of 18.

The new law allows businesses to pay workers under 18 a youth wage of 85 percent of the full minimum wage. For Oct. 1, 2006, through July 1, 2007, the youth minimum wage is $5.91. When the worker turns 18, the worker is entitled to the full minimum wage in effect at the time.

In addition, a 90-day training wage of $4.25 can be paid to new employees under 20 years of age. After the training period, employees under 18 will be entitled to the youth minimum wage and employees over 18 will be entitled to the full minimum wage.

The minimum wage for workers who receive tips remains unchanged at $2.65.

Minimum wage overtime fix passed
With barely a month to spare before the new minimum wage rules took effect, the legislature passed the minimum wage overtime fix-it bill. It fixed a major mistake in the new minimum wage law by passing legislation to restore the status quo regarding overtime exemptions.

The error, which resulted from differences between the state and federal minimum wages, pushed Michigan out of compliance with the Fair Labor Standards Act, which grants exemptions for overtime to certain classes of employees, such as commissioned retail sales staff.

Business groups argued that a fix was necessary to correct the oversight, but politics made reaching a solution difficult. Grassroots support from business owners in Michigan finally brought the point home that the exemptions had to be restored.

So, while the minimum wage increased to $6.95 on Oct. 1, the overtime exemptions previously in place in Michigan are not affected.

Update from Washington
James Goldberg,
MRA Washington Counsel

New rules for Social Security “no match”
 The Bureau of Immigration and Customs Enforcement (ICE), is proposing a tightening of rules governing the steps employers should take when they receive Social Security “no match” letters. Such a letter is sent when the name and Social Security number submitted for an employee do not match the information in the government’s database.
The proposed rules specify that if the error is typographical, an employer must notify ICE within 14 days. If the error is not typographical, the employer should ask the employee to confirm the accuracy of the record.
If the employee identifies an error, the employer must notify ICE of the correct information. If the employee states that the information is correct, the employee must be asked to communicate directly with ICE.
If the employee fails to resolve the situation within 60 days, the employer must either fire the individual or risk being held liable for violating federal law.
Employers are subject to fines imposed for each incorrect Social Security number submitted.

Senate votes to tighten security at ports
The Senate has unanimously approved legislation to tighten security at U.S. seaports by establishing a pilot program to scan U.S.-bound cargo for “dirty bombs” and other nuclear weapons.

The Senate bill would set up the cargo screening pilot program at three to-be-determined foreign ports in an effort to determine if mandatory inspections would tie up commerce and drive up costs, as some fear.

In a related development, the California legislature has approved a bill that would impose a $60-per-container fee on all containers entering the state at the ports of Los Angeles and Long Beach, major gateways for imports from Asia. Revenues derived from the fee, which have to be paid by the owner of the cargo in the container, would help fund added security measures.

Since the fee is expected to add some $500 million annually to shipping costs, retailers and other importers have indicated their strong opposition to the fee to Gov. Arnold Schwartzenegger.

Return to October Michigan Retailer Page one • MRA home

Overview of Michigan's
2006 ballot proposals

On November 7, Michigan voters will decide five important ballot proposals in addition to electing U.S. and state officeholders.

Michigan Retailers Association has not taken positions on any of the proposals that will appear on the ballot on November 7. The following overview is provided as a service to membership.

More detailed information and analysis of the proposals are available at the following websites:
• Senate Fiscal Agency,
www.senate.michigan.gov/sfa
(Found under “Agency publications”)
• Citizens Research Council of Michigan, www.crcmich.org/election.

Proposal 2006-01:
Constitutional Protection of DNR Funds
This proposal would create a new fund called the Conservation and Recreation Legacy Fund, and would establish two existing trust funds in the Michigan Constitution. The Legacy Fund would be composed of 17 existing funds supporting activities in the Department of Natural Resources (DNR); those funds would become accounts or subaccounts within the new Fund.

The proposal would not change the purpose of any of the funds affected, nor would it increase or decrease any user fee or affect the amount of revenue received or spent by the DNR. There would be no costs or savings from adopting it.

Proposal 2006-02:
Michigan Civil Rights Initiative
This proposal would create a constitutional amendment prohibiting public institutions from using affirmative action programs that grant preferential treatment on the basis of race or sex in employment, education or contracting.

If this proposal were approved, a number of existing programs and practices likely would become illegal. These include, for example, public university programs that explicitly consider race, gender, ethnicity or national origin in admissions, and that target scholarships to minority students.

Less clear is whether the amendment would prevent outreach efforts that focus on women or minorities but do not exclude others.

Proposal 2006-03:
Referendum on Dove Hunting
This proposal would reclassify the mourning dove as a game bird, as opposed to its previous songbird designation, and permit mourning dove hunting.

Proposal 3 pits birders against hunters. While hunters support mourning dove hunting because the birds are so abundant, birders enjoy the birds’ attractive appearance and mournful call. In 1998 the mourning dove was adopted as Michigan’s official Bird of Peace.

Proposal 2006-04:
Eminent Domain
This proposal would amend the state Constitution to:
• Prohibit government from taking private property for transfer to another private individual or business for purposes of economic development or increasing tax revenue.
• Provide that if an individual’s principal residence is taken by government for public use, the individual must be paid at least 125 percent of the property’s fair market value.
• Require government that takes a private property to demonstrate that the taking is for a public use; if taken to eliminate blight, require a higher standard of proof to demonstrate that the taking of that property is for a public use.

Proposal 2006-05:
Educational Funding Guarantee Law
This proposal would require inflationary increases in appropriations for K-12, community colleges and higher education, and fund specific guarantees within the K-12 budget.

The Citizens Research Council estimates that the additional costs of the proposed law to the enacted FY07 state budget will be between $565 million and $707 million. Under the proposal, these costs will have to be financed by the state’s General Fund.

At the minimum level, Proposal 2006-05 would increase the amount of the General Fund budget currently dedicated to education spending from 21 percent to 27 percent.