adopt and amend | Fraser Blog

Five Stories That Matter in Michigan This Week – October 4, 2024

With Election Looming, it’s Important to be Informed About Michigan’s AI Election Communications Law

A little less than a year ago, in November, 2023, Michigan became the fifth U.S. state to pass a law regulating artificial intelligence use in election communications. The legislation requires a disclaimer on political advertisements created using A.I.-generated content.

Why it Matters: Under the law, a person who knowingly violates this section is guilty of a misdemeanor punishable by a fine of not more than $1,000.00 or imprisonment for not more than 93 days, or both. You can access more information about the law here.

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Michigan Sales Tax Applies to Credit Card Surcharges

Recently, the Michigan Department of Treasury provided guidance on the application of a Michigan sales tax on credit card “surcharges” for businesses. The Michigan Department of Treasury considers the surcharge added to a customer’s bill a “service cost” or “other expense of the seller” under the General Sales Tax Act, making it part of the taxable “sales price” of a transaction.

Why it Matters: Compliance with this guidance is important. Failure to do so may result in underpayment of taxes due to the State of Michigan, potentially subjecting your business to penalties and interest. If you have any questions about how this guidance applies to your specific situation, please contact Paul McCord or your Fraser Trebilcock attorney. Read more.

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Update: Michigan Supreme Court Clarifies its “Adopt and Amend” Minimum Wage and Tipped Worker Ruling

The Michigan Supreme Court recently issued a clarification of its July 31, 2024 ruling on minimum wage and paid sick leave standards. This update, released on September 18, 2024, comes in response to a request from the State of Michigan and its attorney general, addressing several key points of confusion that arose from the original decision.

Why it Matters: Employers should remain vigilant for any further updates or guidance from state authorities. The complex nature of these changes underscores the importance of staying informed and seeking experienced legal counsel to ensure full compliance with Michigan’s evolving wage laws. Read more from your Fraser Trebilcock attorney.

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Business Education Series: Avoid the Five Business Dangers

On Wednesday, October 30, Tom Hamp, Hamp Business Coaching, will delve into the critical issues of poor leadership skills and their impact on organizational success, explore strategies to overcome underperforming sales, and discuss the consequences of ineffective marketing. Additionally, we will examine the importance of robust human capital management and the detrimental effects of financial mismanagement. This seminar is designed to provide practical solutions and actionable insights to help you navigate and resolve these common business problems effectively.

Why it Matters: Learn how to understand your business’s financials, understand profit and loss and use it to your advantage. Also learn how leadership impacts staff and how to manage employees better by increasing leadership skills. Full information and to register.

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Fraser Trebilcock Attorney Secures Victory for Firm Client

Fraser Trebilcock attorney Danielle Lofton was successful in securing a victory for the firm’s client in an insurance matter. A mother of an eight-year-old daughter in Florida had been sued over an accident that occurred in Michigan involving her daughter having caused a serious injury to a cousin while driving an ATV.

Why it Matters: The mother’s insurance company in Florida had gone into insolvency, leaving the mother on her own to defend herself in the civil lawsuit. Although she was initially faced with many roadblocks, Attorney Lofton was successful in convincing the Florida Insurance Bureau to not only settle the underlying claim, but to reimburse the firm’s client for the defense costs she incurred. Read more.

Related Practice Groups and Professionals

Business & Tax | Paul McCord
Labor, Employment & Civil Rights | David Houston
Insurance Law | Danielle Lofton

Five Stories That Matter in Michigan This Week – August 16, 2024

Student Can’t Bring an ELCRA Hostile Environment Claim Against School Due to Harassment from Another Student

In Doe v Alpena Public School District, the Michigan Supreme Court recently ruled that a school cannot be held liable on a theory of vicarious liability under the Elliott-Larsen Civil Rights Act for student-on-student misconduct.

Why it Matters: The Court’s ruling draws a distinction between the employment context, where such vicarious liability claims are permitted, and the school context for actions taken by non-employees, such as students.

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Michigan Supreme Court Rules on Adopt and Amend: What Businesses Need to Know

In Mothering Justice v Attorney General, a 105-page, 4-3 party-line decision, the Michigan Supreme Court ruled that the state Legislature lacked the authority to “adopt and amend” two employment-related ballot initiatives in 2018. In its ruling, the Court ordered that increases to the state’s minimum wage and tipped wage laws, and the expansion of the state’s earned sick time laws will go into effect February 21, 2025.

Why it Matters: Employers will need to educate their staff on these changes, adjust payroll systems, and ensure their company’s policies are updated to reflect the new laws before the February 21, 2025, deadline to remain compliant. Learn more.

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Michigan Cannabis Exceeds $287 Million in July ‘24

Cannabis sales surpassed $278 million in July, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $286,388,987.71, while medical sales came in at $1,354,084.70, totaling $287,743,072.45.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices.

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Comment Period Ends for Federal Cannabis Rescheduling

On May 20, the U.S. Department of Justice and the Drug Enforcement Administration issued a Notice of Proposed Rulemaking to initiate the proposed rescheduling of cannabis from Schedule I to Schedule II under the Controlled Substance Act. A 60-day public comment period then began, which ended in late July.

Why it Matters: Following the end of the public comment period, the DEA will review the public comments, may incorporate comments as appropriate, and then finalize the rescheduling rule. Typically, a final rule becomes effective 30 days after being published in the Federal Register.

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IRS Resumes Processing Some Employee Retention Credit Claims: What Business Owners Need to Know

The Internal Revenue Service (IRS) recently announced the resumption of processing some Employee Retention Credit (ERC) claims, with a focus on those considered “low risk.” This move comes after a 10-month moratorium implemented to investigate fraudulent activity surrounding these claims. In the same announcement, the IRS communicated its plans to deny tens of thousands of improper high-risk ERC claims.

Why it Matters: According to the IRS, between 10% and 20% of the claims it analyzed fall into what the agency considers the highest-risk group. An estimated 60% to 70% of claims show what the IRS terms an “unacceptable level of risk.” The remaining claims, approximately 10% to 20%, are considered low-risk, and according to the IRS, “some of the first payments in this group will go out later this summer.” Read more.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Business & Tax | Robert Burgee
Business & Tax | Paul McCord

Five Stories That Matter in Michigan This Week – August 9, 2024

Michigan Supreme Court Rules on Adopt and Amend: What Businesses Need to Know

In Mothering Justice v Attorney General, a 105-page, 4-3 party-line decision, the Michigan Supreme Court ruled that the state Legislature lacked the authority to “adopt and amend” two employment-related ballot initiatives in 2018. In its ruling, the Court ordered that increases to the state’s minimum wage and tipped wage laws, and the expansion of the state’s earned sick time laws will go into effect February 21, 2025.

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IRS Resumes Processing Some Employee Retention Credit Claims: What Business Owners Need to Know

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Comment Period Ends for Federal Cannabis Rescheduling

Why it Matters: Following the end of the public comment period, the DEA will review the public comments, may incorporate comments as appropriate, and then finalize the rescheduling rule. Typically, a final rule becomes effective 30 days after being published in the Federal Register.

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Michigan Cannabis Regulatory Agency Set to Ban MCT Oil

In a recent technical bulletin from the CRA, effective October 1, 2024, “MCT (medium-chain triglyceride) oil will be added as a target analyte for marijuana vape cartridges as part of the Sampling and Testing Technical Guidance for Marijuana Products.

Why it Matters: MCT oil is commonly used in inhalable cannabis products, such as vapes, and may pose dangers to respiratory health when inhaled. Businesses will need to adhere to the new testing parameters and begin to eliminate MCT oil from their products before October 1, 2024, if not sooner in a proactive manner.

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DOL Issues Bulletin to Wage and Hour Field Staff Regarding AI Use in Workplace

The United States Department of Labor recently issued a Field Assistance Bulletin to its Wage and Hour Division field staff regarding the application of the Fair Labor Standards Act (FLSA) and other federal labor standards as employers increasingly use artificial intelligence (AI) and other automated systems in the workplace. For example, the bulletin advises that, “Reliance on automated timekeeping and monitoring systems without proper human oversight, however, can create potential compliance challenges with respect to determining hours worked for purposes of federal wage and hour laws.”

Why it Matters: As AI use becomes more pervasive across businesses, employers must be aware that their use of AI can create legal compliance challenges, and that regulatory agencies are paying attention to these issues.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Business & Tax | Robert Burgee
Business & Tax | Paul McCord
Cannabis Law | Sean Gallagher

Michigan Supreme Court Rules on Adopt and Amend: What Businesses Need to Know

Background: Adopt and Amend Unauthorized

In Mothering Justice v Attorney General, a 105-page, 4-3 party-line decision, the Michigan Supreme Court ruled that the state Legislature lacked the authority to “adopt and amend” two employment-related ballot initiatives in 2018. In support of the legislature’s authority, the minority noted that there is nothing in the Michigan constitution limiting that authority. The majority found the legislature’s action to have been a usurpation of the right of the voters to initiate and effectively implement new legislation. The ruling reinstates two ballot initiative measures affecting Michigan workers. Much more will be written about this aspect of the decision, however, the bottom-line for Michigan employers is: Employees are going to be more costly and more difficult to manage within the law.

What This Means for Businesses

The case involved the “Wage Act” proposing changes to minimum wage and overtime laws, and the “Earned Sick Time Act.” In its ruling, the Court ordered that increases to the state’s minimum wage and tipped wage laws, and the expansion of the state’s earned sick time laws will go into effect February 21, 2025. The “standard” minimum wage for non-tipped employees will increase to an adjusted rate, calculated by the state treasurer, of more than $12 per hour. Tipped workers, the percentage that businesses pay will increase to 48%. By this formula, the minimum wage will increase each year until 2029, when the tipped and non-tipped minimum wages will be the same.

Earned sick time leave will also see an overhaul for both large and small employers. Employers with more than 10 employees must provide 72 hours of paid sick time leave, and employers with less than 10 employees must provide 40 hours of paid sick time leave annually and 32 hours of unpaid leave. Employees, including part-time and seasonal, will receive one hour of paid medical leave for every 30 hours worked, up to 72 hours per year. This is an increase from the previous maximum of 40 hours per year. Additionally, employers with less than 50 employees are no longer exempt from having to offer earned sick time leave.

Employers will need to educate their staff on these changes, adjust payroll systems, and ensure their company’s policies are updated to reflect the new laws before the February 21, 2025, deadline to remain compliant.

If you’re concerned about these changes or have questions, please contact David J. Houston or your Fraser Trebilcock attorney.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions. You can read the full Opinion here.

Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

Five Stories That Matter in Michigan This Week – August 2, 2024

DOL Issues Bulletin to Wage and Hour Field Staff Regarding AI Use in Workplace

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Michigan Supreme Court Rules Against “Adopt and Amend”

In Mothering Justice v Attorney General, a 105-page. 4-3 party-line decision, the Michigan Supreme Court ruled that the state Legislature lacked the authority to “adopt and amend” two employment-related ballot initiatives in 2018.

Why it Matters: In its ruling, the Court ordered that increases to the state’s minimum wage and tipped wage laws, and the expansion of the state’s earned sick time laws will go into effect February 21, 2025.

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Michigan CRA Files Formal Complaint Against Adult-Use Marijuana Processor

The Michigan Cannabis Regulatory Agency recently filed a formal complaint against Sky Labs LLC, an adult-use marijuana processor, alleging that the business received THCA isolate from an out-of-state business to convert to marijuana distillate and disguised the purchase in the METRC monitoring system as Sky Labs LLC does not have the proper license to convert THCA isolate to marijuana distillate.

Why it Matters: The CRA intends to impose fines and/or other sanctions against Sky Labs, LLC, which include suspension, restriction, or revocation, of the business’s license.

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Federal Judge Upholds FTC Ban on Non-Compete Agreements

A federal judge recently denied a tree-trimming company’s bid to block the FTC’s ban on non-compete agreements, following the agency issuing the final rule in April, which is set to take effect on September 4, 2024.

Why it Matters: Under the final rule, “Non-compete clause” is defined as “a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from: (i) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (ii) operating a business in the United States after the conclusion of the employment that includes the term or condition.” The final rule covers all entities subject to the FTC Act (generally, most for-profit entities, but not non-profit organizations). Read more from your Fraser Trebilcock attorneys.

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Michigan Supreme Court Rules that Condo Association Owes Duty of Care to Co-Owners for Premises Liability

In a ruling on July 11, 2024, the Michigan Supreme Court overturned previous case law and redefined the legal relationship between condominium associations and their co-owners with respect to premises liability.

Why it Matters: The Court ruled that when using common areas of the condominium, a co-owner is deemed to be an invitee. This classification requires the condominium association to exercise reasonable care to protect co-owners from hazardous conditions in these shared spaces. Learn more.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Real Estate | Andrew Moore