“Train people well enough so they can leave. Treat them well enough so they don’t have to.” – Sir Richard Branson
Healthcare continues to be the leading private-sector employer in Michigan. Our latest Economic Impact of Healthcare in Michigan report shows healthcare provided nearly 572,000 direct jobs in Michigan in 2022, with roughly 217,000 of those jobs in hospitals. Whether in our largest urban cities or our smallest rural towns, hospitals are often one of – if not the – largest employers in their communities.
In a sense, hospitals operate as their own small towns, open 24/7/365, requiring a multitude of different professions to not only make sure patients receive the right care, but that they’re fed appropriately, receive the correct medications, have clean rooms, gowns and a litany of other tasks. Thus, the environment that hospitals operate in as employers is extremely critical. Hospitals go to great lengths to not only identify and hire the right people, but to offer strong compensation and benefit packages, training and career development, and flexibility that will retain them. With this heavy reliance on labor, it is no wonder that hospital human resources departments have been paying particular attention to a new state law set to go into effect Feb. 21 known as the Earned Sick Time Act.
The soon-to-be-implemented laws were established after the Michigan Supreme Court upheld voter initiative petitions last July on paid sick leave and minimum wage following a legal challenge to the Michigan Legislature “adopting-and amending” these petitions in 2018. Unfortunately, the Earned Sick Time Act presents many challenges to employers that need to be addressed in advance of the Feb. 21 deadline. With hospitals responsible for implementing and complying with required sick time allocations for their employees, they need state laws and policies that contemplate how hospitals operate.
To advocate on our hospitals’ behalf, the MHA joined a coalition of employers led by the Michigan Chamber of Commerce calling for action by the legislature to address the practical challenges and conflicts created by the revised law. Hospitals are firmly committed to ensuring employees have the benefits and flexibility needed to care for themselves and their families. Our participation is simply to establish an environment that allows hospitals to continue to operate and provide benefits to the more than 200,000 hospital workers in the state.
The changes that need to occur include refining the definition of an eligible employee; recognizing annually allocated sick time, as opposed to accrued sick time, as well as other paid leave offered by an employer; addressing conflicts with existing federal employment law; and limiting the incentive for increased legal action.
The current law is overly broad in the definition of an eligible employee, creating situations where variable time employees and exempt employees, including employed physicians, would be due earned sick time and adding liabilities for hospitals. The law as written also prevents employers from providing the full allotment of sick time at the beginning of the year, instead requiring sick time to be accrued. This reduces employee flexibility and increases record-keeping requirements for the employer. In addition, employers vary in how they offer paid leave, whether it is through one Paid Time Off bank, or through a combination of vacation, sick and personal and/or paid leave. Once again, this harms the types of benefits offered to healthcare workers and the flexibility a hospital has in creating a benefits package that best matches their employees.
The revived law also creates several conflicts with several prominent federal laws, including the Family and Medical Leave Act, the Fair Labor Standards Act and the Americans with Disability Act. Hospitals need clarity and laws that are congruent with each other. We as a state can not implement laws that put all employers at odds with federal requirements. The demand for workforce talent is too high for Michigan to afford to implement barriers that make our state less attractive to employers.
Lastly, the revived act creates a private right of action, allowing an employee to sue an employer for violating the act. The MHA is supportive of state enforcement and a complaint and investigation process overseen by the state that dictates enforcement far before parties need to engage with the legal process. Failing to address the private right of action will lead to increased administrative and legal costs for all employers.
Thankfully, amending the Earned Sick Time Act is a priority for both chambers of the Michigan Legislature. This issue was the second bill introduced by new state House leadership in the form of House Bill 4002, which has already passed the chamber. The Senate introduced their own version, establishing a framework necessary for legislative negotiations between the two separate chambers and their opposing partisan leaders.
The MHA and the other members of the coalition will continue to advocate on behalf of our members and their employees to make sure changes are made in the best interests of both employees and employers. Hospitals have always prided themselves on the benefits they offer to their healthcare workers, and we should not risk lowering the quality of those benefits to accommodate the Earned Sick Time Act as written. The time exists to get something done and we will use every lever at our disposal to make sure our concerns are heard by all in Lansing.
As always, I welcome your thoughts.