A statute requiring public employees to contribute three percent of their pay to finance state retiree health-care benefits is unconstitutional, the Michigan Court of Appeals has ruled.
In AFSCME Council 25, et al. v. State Employees Retirement System, et al., the court upheld a lower court ruling that struck down MCL 38.35.
The state and unions representing state workers negotiated a three percent pay raise, which the state Civil Service Commission (CSC) approved.
The statute negated the raise by requiring state workers to contribute the amount of the raise to fund health care benefits for state retirees.
Court of Appeals Judge Karen M. Fort Hood, joined by Judges Jane M. Beckering and Cynthia Diane Stephens, ruled that the CSC has plenary authority over state workers’ pay.
Fort Hood explained that Michigan’s Constitution has an express mechanism to override the commission.
[A]n increase in the rate of compensation authorized by the commission may be rejected or reduced by the Legislature “by a two-thirds vote of the members elected to and serving in each house” provided the vote occurs within 60 calendar days of the transmitted increase. Mich Const 1963, art 11, § 5, ¶ 7.
The Legislature tried but failed to override the CSC in this manner, and then enacted the statute.
But, Fort Hood ruled, by enacting the statute:
the Legislature acted to reduce the compensation of classified civil servants by three percent without an accompanying agreement with the unions or the [commission].
The Michigan Lawyer 