Michigan's tipped wage law: House passes bill to stop raises, limit paid sick time
LANSING, Mich. (FOX 2) - In a month,the minimum wage for tipped workers in Michigan will increase by nearly $2 per hour to just under $6. But on Thursday, the House of Representatives passed legislation to stop the planned raises while also limiting sick time benefits for 1.5 million hospitality workers.
The Republican-controlled House passed the legislation, mostly along party lines, by a 67-38 vote – but a few Democrats joined them in support of sending the bill to the Senate.
Whether the Senate will pass it and then send it on to Governor Gretchen Whitmer remains to be seen.
What they're saying:
Thursday's hearing in the House was contentious as tipped wage servers showed up to tell lawmakers to leave the system alone. The workers claim they could actually take home smaller checks and the smaller businesses claim, if they don't get relief, they would be the ones who end up paying.
Scott Ellis from Michigan Licensed Beverage Association said the money isn't there for these businesses.
"We're going to have to reduce staff, raise prices, which at some point is going to make people stop going out because the prices are so high," Ellis said. "It will be roughly between $150,000 and $200,000 more a year, in just payroll, that they have to pay and the margins just aren't there."
Timeline:
In 2018, a ballot proposal that called for raising Michigan's minimum wage was set to go before voters.
However, the Republican-majority legislature decided that instead of allowing the initiative to go on the midterm ballot in November, it would directly adopt the proposal into law.
Then, during the lame duck session the legislature greatly watered down the proposal – a decision that was the subject of a legal case that took years to move through court system.
Eventually, the Democratic-led high court ruled the 2018 decision was unconstitutional and adopted the state's minimum wage. The proposal also increased paid sick time while doing away with the current payment structure for workers that earn tips.
By the numbers:
Michigan's tipped minimum wage increases will follow a schedule of annual increases, starting on Feb. 21, 2025:
- Feb. 21, 2025 - Tipped wage will be $5.99
- Feb. 21, 2026 - Tipped wage will be $7.97
- Feb. 21, 2027 - Tipped wage will be $9.91
- Feb. 21, 2028 - Tipped wage will be $11.98
The February increase is part of an order from the state Supreme Court, which in 2024 ruled a decision to adopt a ballot proposal dealing with the minimum wage before amending how much it would alter Michigan's payment laws for its workers was unconstitutional.
The decision ordered the state to return the wage increase to the schedule written in the ballot proposal back in 2018.
The backstory:
Proponents of increasing the state's wages law say the decision was a major victory for workers, while small businesses are fretting the wage hike could mean economic pain of their own.
Two Weeks ago, a Michigan House Committee approved a GOP package to maintain the current tip system while removing the mandatory sick time provision for small businesses.
Democrat Dr. Matt Longjohn said that workers need the paid sick time and that a large majority admitted to showing up to work when they shouldn't have.
AFL CIO Michigan President Ron Beiber has warned Democrats not to vote for the changes – but the other side claims unions don't represent the tipped workers.
Ultimately, the package passed and the proposal now goes to the Senate where democrats have control. It's unclear what the Senate will do with the house plan.
Governor Whitmer is likely watching it play out but has not staked a position.
The deadline for getting the change done is Feb. 21, when the increases go into effect.
The Source: FOX 2's Tim Skubick is in Lansing for the House debate on the bill.