MI-FLOC Proposed Legislation = More Taxes for Small Businesses

November 08 2023

Categories: HR Solutions

MI-FLOC Proposed Legislation = More Taxes for Small Businesses

Michigan Family Leave Optimal Coverage Benefits Act (MI-FLOC)

Voice your opinion Now

MI-FLOC is proposed legislation that would create an expansive state-administered 15-week paid leave insurance program financed through a new tax on employers and, in some instances, employees (Senate Bills 332 & 4572).  Recipients of paid leave benefits would be eligible to receive up to 65% of the state's average weekly wage, or approximately $788 per week.  

It is important to note the proposal would impact every Michigan employer regardless of size
and would raise taxes on employers by an estimated $1 billion.


  • Creates a statewide mandate on employers to provide up to 15 weeks of paid intermittent parental and family leave
  • The introduced bills would have one of the most expansive and expensive mandates in the country in terms of eligibility, qualifying events, benefits, and employer obligations. Due to cost and complexity, only eleven other states have enacted similar laws
  • This proposal would be a mandated tax on employees as well as employers
  • The MI-FLOC program is different than, and would be in addition to, Michigan’s Paid Medical Leave Act (Public Act 338 of 2018), which requires Michigan employers with 50 or more employees to provide 40 hours of paid medical leave to employees in a calendar year. Small businesses under 50 employees are exempt under this legislation, but that could change if the Michigan Supreme Court overturns the changes made to the original sick leave proposal in 2018
  • While the handful of other states with similar programs set a hard cap on annual payroll taxes to fund their programs, the Michigan proposal gives the state the authority to set the annual contribution amount with no limits


  • MI-FLOC would be state-run, similar to the Unemployment Insurance Program
  • Provides 15 weeks of paid family leave after an employee has contributed to the MI-FLOC for one year (by or through employer)
  • This covers all employees – including part-time employees – NO exemptions for smaller employers
  • Employer can require employee to pay 50% of the payroll tax
  • Would allow intermittent leave – but not less than 8 hours a week
  • Advanced notice is encouraged, but not required
  • Employer may NOT require employee to use vacation or sick leave first; can run concurrently with FMLA for employer with 50 or more full time employees
  • Cost of the payroll tax would be determined each year based on how much was used the previous year – unlike Unemployment Insurance, this cost is socialized among all businesses so that even if your employees have not used the benefit, an employer’s tax can still increase yearly
  • Tax would begin on employers beginning January 1, 2025
  • Employer must maintain healthcare benefits for someone taking MI-FLOC
  • Employer must restore the employee to their former position (or similar position) upon return from leave
  • Family member includes not just immediate family members, but anyone who has “an affinity” like family (blood relative, domestic partner)
  • Includes both state enforcement/fines and civil action fines


  • Birth/adoption/foster care duties (includes any time within the “first year”)
  • To cover an individual’s mental or physical illness, injury, or health condition
  • To obtain a medical diagnosis, care, or treatment of health condition (individual or family member)
  • Preventative medical care (individual or your family member)
  • A serious health condition (individual or your family member)
  • To care for a military member who is a family member
  • Qualifying exigency leave – defined to include childcare and school activities, parental care events, or issues arising due to military deployment or a variety of military events/circumstances
  • Safe leave (domestic abuse)
  • Bereavement leave within three months of the death (10 days for bereavement leave)
  • Meetings at a school or place of care
  • Closure of a workplace for a public health emergency or to care for someone impacted
  • Exposure to communicable disease or to care for someone who has been exposed
  • Inability to work/work remotely due to a natural disaster or public health crisis

To voice your opinion on the topic of paid leave:
contact your state representative by CLICKING HERE
and contact your state senator by  CLICKING HERE

Michigan Chamber of Commerce analysis of proposed legislation can be found HERE

Who are you relying on for the latest federal and state legislative updates?
Don't be caught off guard
Contact Koppinger & Associates for resources to help


photo: Shutterstock


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