Labor experts sat in a smoke-filled room cracking peanuts and pondering the tough question: How do we leverage health benefits to increase our popularity in Lansing?

"I know, let's kill off small nonprofits!"

"Good idea! Exactly what we need to make government services look good."

So... that's what they did.

Mackinac Center tots up the damage about to hit our state's local, independent resources.

https://www.mackinac.org/blog/2025/sick-leave-mandate-will-hurt-michigan-charities

Sick leave mandate will hurt Michigan charities

The state’s new paid sick leave mandate, scheduled to go into effect Feb. 21, will do more than drive up costs for small businesses

February 10, 2025 |    By Michael J. Reitz

This article originally appeared in The Detroit News January 21, 2025. 

The state’s new paid sick leave mandate, scheduled to go into effect Feb. 21, will do more than drive up costs for small businesses. The impending changes will devastate the state’s soup kitchens, food banks, domestic violence shelters and other charities. Michigan lawmakers should consider these effects as they reform the ill-conceived Earned Sick Time Act.

Saralyn Temple runs Midland’s Open Door, a charity that offers a hot meal and a warm bed to men, women and children in the area. As an employer, Open Door must comply with the mandates, just like any other business.

Temple told me she is “agonizing” over the law. “It adds financial burdens to nonprofits that are already functioning on a tight budget,” she said.

The Earned Sick Time Act will require employers in Michigan to offer paid sick time to all employees, whether full-time, part-time or seasonal. Employees can use up to 72 paid hours in a year. Companies with fewer than 10 employees must provide 40 hours of paid leave and 32 hours unpaid.

Open Door has operated in Midland for more than 50 years. In the coming year, the organization will provide 40,000 meals and 12,000 nights of shelter to its guests. Temple estimates the new mandates will increase her charity’s costs by $24,000 a year.

“That’s $24,000 I can’t use to feed people, to house people, to get people case management so that they’re getting back on their feet,” said Temple.

The new law allows employees to take sick days without notice, up to three days without a doctor’s note. You don’t even have to be sick yourself. Sick days can be claimed for a wide circle of family members and even people of “close association.” This is a steep challenge for a facility that is sheltering people round the clock.

“We are a small, nonprofit, 24-hour-a-day shelter,” said Temple. “Where do you get the coverage for that? If I just have someone call in three days in a row, I have to find somebody else to cover that person.”

Temple says Open Door is conscientious about taking care of its employees. “Shelter work is hard,” she said. “It’s 24 hours a day, seven days a week. And so we really want to encourage our people to get rest. It avoids burnout.”

Given the demands on its team members, Open Door provides employees health insurance, a retirement plan and generous paid time off. “I agree we do need to give room for people to be sick, and I feel we already do that,” said Temple.

The new mandate is a bonanza for trial lawyers. The law creates a presumption that employers violated the law if their record-keeping isn’t adequate or if the company disciplines an employee who filed a complaint. If a former employee wins a lawsuit, the remedies can include reinstatement, attorneys’ fees, back pay and benefits.

Temple gestured around her office, a converted garage. “We’re not doing silly things with people’s money. We’re caring for people.”

But she has spent “endless hours” with a retired HR professional preparing for the legal changes. They’ve attended online seminars, sought advice and brainstormed ways to comply.

According to the Michigan Nonprofit Association, more than 41,000 charitable nonprofits operate in Michigan. Ninety-three percent of those nonprofits are small outfits, with revenues of less than $1 million.

Consequently, the new mandates affect a large number of organizations that are helping people. Small charities that stretch every dollar as far as possible will eat up resources implementing the new sick leave program.

“I wish this wasn’t happening,” Temple says.