Gov’t Affairs News: commuter withholding, minimum wage increase, overtime and more

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Government Affairs News survey

Commuter withholding bill an administrative nightmare

The Senate Government Operations Committee last week quickly approved an income tax withholding bill, SB 1127, that would create an administrative nightmare for employers. Twenty-two cities in Michigan impose a city income tax on residents and nonresidents. SB 1127 would require employers to track, withhold and remit city income taxes in cities where employees reside.

In Michigan and throughout the country, businesses must meet a nexus (physical presence) threshold before they assume any liability for collecting taxes. SB 1127 dismantles the nexus threshold and would require businesses to jump through administrative red tape to withhold and remit taxes to numerous additional taxing entities. These new burdens would be imposed by cities where the employer receives no services or compensation for collection. Due to the increased workload, employers that utilize a third-party payroll administrator would likely see a large fee increase to cover the additional administrative requirements under SB 1127.

This commuter withholding bill would create an expensive, time-consuming administrative burden with no benefit to the employer. MRA strongly opposes the legislation and submitted written testimony to the committee. The bill is now on the Senate floor and may be utilized as a bargaining chip in other lame duck discussions. MRA will continue to advocate against the expansion of tax liability, administrative burdens and added expenses for employers to collect a tax that the taxing jurisdiction is unwilling or unable to collect on its own.

Term limits discussion kicks off lame duck

With the 2016 election barely behind us, the House Elections and Ethics Committee kicked off the lame-duck session with a two-day, in-depth discussion on term limits by discussing several potential 2018 ballot proposals. Michigan currently has one of the most stringent forms of term limits. Under the limits approved by voters in 1994, legislators may serve up to three two-year terms in the Michigan House of Representatives and two four-year terms in the Michigan Senate.

The committee heard testimony on three different proposals (HJR V, HJR W, HJR X) that would repeal, allow various combinations of the total years a future legislator could serve in either chamber, or allow a legislator to serve nonconcurrent terms. While not yet reflected in the joint resolutions discussed, term-limited Rep. Ed McBroom (R-Vulcan) stated his intent was to only apply the reforms for future legislators. Application to future legislators only, he said, would ensure the proposal would not be viewed as a self-serving measure for current or past legislators.

In January, 43 of the 110 elected House members, or 39 percent, will be new, first-term representatives. Thirty-nine of the 43 new representatives were elected to fill spots held by current term-limited representatives. Proponents of term limits argue term limits prevent abuses of power by longstanding elected officials and give voters fresh faces (in Congress, incumbents enjoy an average winning percentage of 96 percent). Those seeking reforms to term limits argue frequent turnover diminishes the institutional knowledge of elected officials and increases the influence of unelected staff and lobbyists.

The committee also discussed the potential of adding a provision making Michigan’s legislature a part-time legislature and petitioning Congress to call a convention to impose term limits on members of Congress (HJR TT). The committee did not take any action on the joint resolutions, but committee members expressed a lot of interest in giving voters an option to modify term limits in 2018. 

Food and grain law changes expected in 2017

The Michigan Department of Agriculture and Rural Development (MDARD) met with stakeholders in late October to discuss updating Michigan’s Food Law and Grain Law to reflect recent updates in the Food Safety Modernization Act (FSMA). Michigan periodically updates its food and grain laws to stay up to date on federal changes made by the Food and Drug Administration (FDA) and to ensure Michigan products can be sold in the global food market. The last update to Michigan’s Food Law was made in 2012, which adopted the 2009 federal regulations/laws. Specific changes include produce safety, gap certification and intentional alteration.

By adopting certain federal statutes and guidelines, Michigan streamlines food safety inspections for retailers without creating additional regulation or conflicts between state and federal law. The updates allow MDARD inspectors to work with or on behalf of FDA inspectors. MDARD places a high value on helping businesses correctly comply with the law rather than imposing punishments and fines on them.

Another topic at the meeting was a discussion on adopting food handler standards/certification as required in nine other states. It’s possible the state might consider adopting the regulations for the food service industry (restaurants) and, if successful, expand them to grocery stores.

Know the law: minimum wage increase to $8.90 slated for January 1

Michigan’s minimum wage will increase again on January 1, from $8.50 an hour to $8.90 an hour. The increase was set by Public Act 138 of 2014, an act that struck a balance between a $10.10 ballot proposal and a three-year phase-in to $9.25 by 2018. Beginning January 2019, the state treasurer will adjust the wage based on the average annual percentage change in the Midwestern Region CPI for the most recent five-year period. For more information about minimum wage, tipped wage, and youth wage view the updated Wage and Hour Division poster.

Are you ready for the new federal overtime regulations?

On December 1, updated federal regulations regarding employee overtime will have a dramatic effect on businesses in Michigan and across the nation. The changes extend overtime pay to an estimated 4.2 million U.S. workers, more than 100,000 in Michigan, who are currently exempt from overtime. These new U.S. Department of Labor (DOL) regulations double the salary threshold that triggers automatic overtime pay, at a rate not less than one and one-half times their regular rate of pay, for non-managerial, full-time, salaried employees for any hours worked beyond a standard 40-hour workweek.

A short Q&A, compiled from multiple sources by Michigan Retailers Association, to a number of common questions about the changes is available online: “How Federal Overtime Changes Will Affect Your Business.” While Michigan Retailers believes these answers are accurate, they are not legal advice, and businesses should consult legal or accounting professionals to be sure an answer fits their specific situation.

Other important items to note:


  • Beer and wine quota system: Legislation that would remove the $250,000 inventory requirement and create a quota system for gas stations seeking to sell beer and wine was reported out of the House Regulatory Reform Committee on November 9. The committee removed a 60-day grace period on the quota that was originally included in SB 929.
  • Growlers: On November 9, the Senate Regulatory Reform Committee approved SB 923, a bill to allow retailers to fill and sell growlers with beer for off-premises consumption. Under current law, only restaurants and breweries may fill and sell growlers. Retailers wishing to fill and sell growlers must comply with regulations for food service establishments (restaurants), seal the growler, and include a label listing the brand name and class of the beer, its net contents, and the name of the retailer that filled and sold the growler.
  • Third party delivery of beer and wine: On October 20 the Senate unanimously approved SB 1088, legislation that would allow a retailer located in Michigan with a Specialty Designated Merchant (SDM) license to use a third party to deliver beer and wine. The bill is similar to HB 4125 but includes beer as well as wine. The bill was referred to the House Commerce and Trade Committee.


  • Fair employment practices: Legislation to expand whistleblower protection to employees reporting planned wrongdoings and coverups was introduced as HB 6021 on November 9. It was referred to the House Government Operations Committee.
  • Local wage/benefit pre-emption: Legislation to repeal the Local Government Labor Regulatory Limitation Act of 2015 was introduced as HB 5956 on October 19 and referred to the House Local Government Committee. The bill would repeal the act MRA supported last year pre-empting local wage and benefit policies. The bill introduction was intended more for political gain prior to the election than for serious consideration by the legislature.
  • Noncompete clauses: Legislation introduced on November 9 as HB 6017 would require employers to disclose whether a noncompete clause is a condition of employment at the time a job is offered to the applicant. The bill was referred to the House Commerce and Trade Committee.
  • Overtime pay: SB 1137 would update Michigan’s Workforce Opportunity Wage Act to reflect the new federal overtime rule’s increased minimum compensation for exemption from overtime pay to less than $913 a week. The Michigan statute does not currently include a minimum pay threshold. The bill was referred to the Senate Commerce Committee on October 20.


  • Autonomous vehicle electronics systems: SB 927928, legislation to prohibit tampering with a manual or autonomous vehicle’s electronic system, was approved by the Michigan Senate on October 20. The bills were reported with a substitute that clarifies an exemption for dealerships and mechanics performing requested or routine maintenance that is not altering or damaging a motor vehicle’s electronic system. The bills were referred to the House Communications and Technology Committee.
  • Dog collar removal: On November 10, the Senate approved HB 5215, a bill that would make it a misdemeanor for someone other than the owner or an authorized agent of the owner to remove a collar or microchip from a dog in an attempt to remove traceable evidence of the dog’s ownership. The bill was modified to tighten previously vague language that may have impacted grooming and other services performed at pet stores.
  • Drones: The Senate approved SB 992 on October 18. The legislation would allow and regulate the use of drones except to interfere with law enforcement or if used for stalking or surveillance. Local governments would not be permitted to enact an ordinance, policy or resolution regulating ownership or operation of a drone, but could promulgate rules, regulations and ordinances within the boundaries of the political subdivision. The bill was referred to the House Communications and Technology Committee.
  • Energy: On November 10, the Senate approved SB 437 & 438, legislation to reform the state’s energy regulations. The bills also make changes that could impact electric choice by adding new fees and requirements on Alternative Energy Suppliers and their customers. The bills now head to the House for consideration.
  • Lead paint sales: Legislation to prohibit the manufacture, sale or use of lead-based paint or paint containing lead was introduced as HB 6020 on November 9. The bill would prohibit the manufacture of paint containing lead beginning January 1, 2017, the sale of paint containing lead as of June 1, 2017, and would prohibit the use of paint containing lead as of January 1, 2018. The bill was referred to the House Regulatory Reform Committee.
  • Plastic bags: Legislation introduced as HB 5962 on October 19 would prohibit the use of noncompostable plastic bags by any retail store. The legislation would also require that compostable plastic bags must be accepted by a curbside recycling program. The bill was referred to the House Commerce and Trade Committee, which reported legislation pre-empting local bag bans or fees in September.
  • Toy guns: Legislation introduced as HB 60036004 on October 19 would prohibit possessing or brandishing objects that appear to be a firearm (toy guns) in public places. The bills were referred to the House Criminal Justice Committee.


  • Opiates: Legislation that would prohibit dispensing and prescribing more than a seven-day supply of opiates for first-time patients or minors was introduced as HB 6045 on November 10. The bill was referred to the House Health Policy Committee.
  • Opioids: On October 20, the Senate Health Policy Committee reported out several bills related to suggestions from the Michigan Prescription Drug and Opioid Abuse Task Force. HB 5326 would allow a standing order that does not identify a particular patient for the purpose of allowing a pharmacist to dispense an opioid antagonist for a drug overdose. SB 805806, also approved by the full Senate on October 20, would allow prescribers to prescribe and pharmacies to dispense opioid antagonists to school boards and provide for training and policies on the administration of opioid antagonists in public schools.
  • PBM regulations: Legislation introduced as SB 1151 on October 20 as the Pharmacy Benefit Manager Act would regulate Pharmacy Benefit Managers (PBMs) in Michigan. The bill would require a PBM to obtain a certificate of authority from the Department of Insurance and Financial Services in order to operate in Michigan, sets requirements for contracts entered into by the PBM and pharmacies, sets audit procedures, and prohibits certain activities including mandates to use a specific pharmacy or mail-order pharmacy. The bill was referred to the Senate Insurance Committee.


  • Feminine products: The House Tax Policy Committee heard testimony November 9 on HB 58795880, legislation that would exempt feminine hygiene products from the state sales and use taxes.
  • Tax increment finance authorities: SB 1026, a bill that would roll all of the current tax increment finance authorities into a single act, was approved by the Senate unanimously on October 18. The bill was referred to the House Local Government Committee.