Senate bills aim to soften contentious minimum wage changes following Michigan Supreme Court ruling

With a July decision from the Michigan Supreme Court set to change the landscape for tipped workers, state Sen. Tom Albert (R-Lowell) has introduced legislation to moderate the changes taking effect amid concerns from business owners. 

The court’s July 31 opinion and order determined that the “adopt-and-amend” strategy the Legislature used in 2018 to gut two ballot initiatives had subverted the rights of Michigan citizens. The two efforts include gradually increasing Michigan’s minimum wage to $15 by 2030 and guaranteeing paid sick time for workers. 

While the Restaurant Opportunities Center of Michigan which filed the suit has argued the decision will be a boon for workers, groups representing Michigan restaurants and businesses are sounding the alarm arguing these new policies would spell the end for a number of Michigan businesses. 

According to a survey released by the Michigan Restaurant and Lodging Association, two-thirds of restaurant operators would lay off employees if the changes were to take effect, costing an estimated 40,000 to 60,000 restaurant jobs, most of which would be tipped workers. Additionally the survey found one in five restaurants are expected to close permanently. 

“Sadly, many restaurants and small businesses across Michigan would not survive the court’s ruling,” Albert said in a statement. “Thousands of people would lose their jobs and inflation-weary customers would face even higher prices. We cannot let that happen, and time is running short to avoid a catastrophe. Democrats must help Republicans enact a solution.”

Under Albert’s bills — Senate Bills 991 and 992, which are not yet online — the tipped minimum wage would remain at 38% of the state’s minimum wage, rather than being phased out. The minimum wage would gradually continue to increase to $12.05 by 2030, and businesses with fewer than 50 employees would continue to be exempt from mandatory paid sick leave. 

“This legislation puts forward a workable solution by keeping current laws in place — steadily and sustainably raising the minimum wage while protecting jobs in the restaurant industry and other small businesses,” Albert said. “If Democrats have a viable alternative, they should present it sooner rather than later.”

The bills are expected to be read into the record when the Senate reconvenes from its summer recess. 

Following the ruling, Senate Majority Leader Winnie Brinks (D-Grand Rapids) released a statement saying her legal team would be reviewing the Supreme Court’s decision. 

“Here’s what I know to be true: the Legislature has a responsibility to uphold the will of the people. Additionally, the people of Michigan deserve clarity. The then-Republican majority made a deceitful bait-and-switch on the very people they were sworn to serve, and this lengthy battle was caused by their tactics,” Brinks said.

“Regardless, today marks a new chapter where legislators and residents alike will have a clear understanding of the citizen initiative process,” she said. 

Michigan Attorney General Dana Nessel has since filed a motion with the Supreme Court on behalf of the Department of Treasury and the Department of Labor and Economic Opportunity requesting “additional guidance and clarification” on how to implement the decision.