Governor Snyder recently signed into law Act 30 of the Michigan Public Acts of 2012 (Act 30), Act 31 of the Michigan Public Acts of 2012 (Act 31), and Act 53 of the Michigan Public Acts of 2012 (Act 53). Each of these Acts establishes new prohibitions related to payroll deductions in the public sector. Act 30 and Act 31 are interrelated, and broadly applicable to public bodies. In contrast, Act 53 stands alone, and affects only public school employers.
Act 30 amends Act 390 of the Michigan Public Acts of 1978, which regulates the payment of wages and fringe benefits to employees. Pursuant to the amendments enacted under Act 30, an employer that is a “public body” within the meaning of Act 388 of the Michigan Public Acts of 1976, the Michigan Campaign Finance Act (MCFA) is prohibited from deducting any amount from an employee’s wages for a contribution to a separate segregated fund under Section 55 of the MCFA. A separate segregated fund includes a political action committee established by a labor organization to make contributions to, and expenditures on behalf of, candidate committees, ballot question committees, political party committees, political committees, and independent committees. It should be noted that the MCFA definition of a “public body” is quite broad, and, among others, includes: 1) a county, city, township, village, inter-county, inter-city, or regional government body; a council, school district, special district, or municipal corporation; 2) a board, department, commission, or council or an agency of a board, department, commission or council; and 3) any other body that is created by state or local authority or is primarily funded by or through state or local authority, which body exercises governmental or proprietary authority or performs a governmental or proprietary function.
Act 31 amends the MCFA. Pursuant to the amendments enacted under Act 31, the use of public resources to establish or administer payroll deduction plans used for the purpose of making contributions to campaign committees is prohibited. A violation of this prohibition cannot be cured by advance payment or reimbursement to a public body. The MCFA’s previous prohibition on the use of public resources to make a contribution or expenditure also remains in place. Act 31 also sets civil and criminal penalties for violation of the payroll deduction prohibition. Civilly, once certain procedures have been followed, a person who resides or maintains a place of business in the jurisdiction of the public body may bring a civil action against the public body or person acting on its behalf, seeking equitable and monetary relief, including court costs and attorneys fees. Criminally, a violation of the payroll deduction is a misdemeanor, for which an individual may be punished by a fine of not more than $1,000.00, or imprisonment of not more than one year, or both and a public body may be fined the greater of (a) a fine of not more than $20,000.00 or (b) a fine equal to the amount of the improper contribution or expenditure.
Finally, Act 53 of the Michigan Public Acts of 2012, amends Act 36 of the Michigan Public Acts of 1947, commonly known as the Public Employment Relations Act. Pursuant to the amendments enacted under Act 53, a public school employer is prohibited from assisting a labor organization in collecting dues or services fees through a payroll deduction of a public school employee’s wages. Act 53 became effective on March 16, 2012; however, the prohibition does not apply to a public school employer that was collecting dues or services fees pursuant to a collective bargaining agreement in effect on March 16, 2012 until the agreement is terminated, extended, or renewed.